Pitroda while explaining the inheritance tax claimed that in the US, 55% of the wealth is grabbed by the government when a person dies and the rest goes to the family, suggesting that Congress can bring a similar policy under its wealth redistribution promise.
“In America, there is an inheritance tax. If one has $100 million worth of wealth and when he dies he can only transfer probably 45% to his children, 55% is grabbed by the government. That’s an interesting law. It says you in your generation, made wealth and you are leaving now, you must leave your wealth for the public, not all of it, half of it, which to me sounds fair. In India, you don’t have that. If somebody is worth 10 billion and he dies, his children get 10 billion and the public gets nothing…,” Pitroda said on Wednesday.
#WATCH | Chicago, US: Chairman of Indian Overseas Congress, Sam Pitroda says, "…In America, there is an inheritance tax. If one has $100 million worth of wealth and when he dies he can only transfer probably 45% to his children, 55% is grabbed by the government. That's an… pic.twitter.com/DTJrseebFk
— ANI (@ANI) April 24, 2024
“So these are the kinds of issues people will have to debate and discuss. I don’t know what the conclusion would be at the end of the day but when we talk about redistributing wealth, we are talking about new policies and new programs that are in the interest of the people and not in the interest of super-rich only,” he added.
Pitroda’s statements instantly went viral, with several social media users and politicians, including those from the BJP, criticising the Congress party for what they consider to be a larger part of the ‘wealth redistribution’ scheme Rahul Gandhi has been vigorously advocating in his numerous public rallies.
In the face of severe backlash and its potential ramifications on the upcoming Lok Sabha elections, Congress distanced itself from Sam Pitroda’s comments on inheritance tax. Pitroda himself, too, back-pedalled from his stand, claiming that he had used inheritance tax only as an example during his conversation on TV and that his comments were twisted “out of context” by Godi media—a pejorative term that left-leaning supporters and ‘intellectuals’ use for media organisations that confront them with uncomfortable questions.
Congress party’s historical stance on inheritance tax
While the Congress party and Sam Pitroda would have us believe that his statements on inheritance tax were just off-the-cuff remarks, history tells us that Congress had long been toying with the idea of imposing taxes on inheritance.
In 2012, the then Finance Minister, P Chidambaram, urged for a discussion on the necessity of implementing an inheritance tax in India, questioning whether enough focus has been given to the concentration of wealth among a select few.
Speaking at the Dr Raja J. Chelliah Memorial Lecture hosted by the National Institute of Public Finance and Policy (NIPFP), Chidambaram emphasised the importance of addressing the issue of wealth accumulation in the hands of a minority.
“Have we neglected the growing concentration of wealth in a few hands? I remain cautious about broaching the topic of intergenerational fairness and thus, the implementation of an inheritance tax,” the Finance Minister stated, encouraging institutions like NIPFP to engage in a thorough debate on the matter.
A year before that, in 2011, P Chidambaram had floated the idea of imposing an inheritance tax as a part of the government’s attempt to raise the tax-GDP ratio.
Therefore, to claim Pitroda’s views on inheritance tax are his personal opinion is nothing but an attempt to brush aside the harsh reality that the Congress party had been actively mulling over introducing inheritance tax as early as 2011, three years before Modi came to power in 2014.
Though the financial ramifications of such a tax, considered in isolation, cannot be overstated, what makes it even more dangerous is the Congress party’s historical stand on other issues that have the potential of causing grave social implications for the country. Congress has long opposed the Universal Civil Code and passionately championed the Muslim Personal Law. The Muslim Personal Law governs among other things inheritance-related matters for Muslims in India.
The Muslim Personal Law Board was established under Indira Gandhi’s leadership, which went directly against the letter of Article 44 of the Constitution, which demanded a uniform civil code. And since then, the Congress on various occasions has quite eloquently extended its support to the Muslim Personal Law Board, often citing secular principles of the country when its critics pointed out the irony of its existence in a secular republic. The party has staunchly opposed any suggestions put forth over the implementation of the UCC in the country and has been a vociferous defender of personal laws.
In fact, in the 2024 election manifesto or Nyay Patra, as the Congress leaders call it, the party has promised “freedom for personal laws”, meaning minorities can have their own laws to govern their communities. The inclusion of freedom of personal laws attracted fierce criticism, with many criticising Congress as a political party that has extended its support to Sharia Law in India.
Congress party’s past stand on inheritance tax and support for Muslim Personal Laws indicate they are eyeing Hindu properties only
Taken together, it offers a grim outlook. On one hand, Congress leaders are rooting for the imposition of an inheritance tax in India while on the other, the party has made it clear it won’t touch personal laws, including Muslim personal law, which governs all the Muslims in India. According to the Muslim Personal Law, inheritance received by a Muslim falls directly under its purview, and they are alone the competent authority to govern it.
This, in essence, would mean that if inheritance tax is introduced in the country before the passage of the UCC Bill, Hindus will stand to lose their inherited property and assets to the government, while it will have no impact on the Muslims as they fall under the ambit of the Muslim Personal Law.
Is the Congress party aiming to seize inherited property and assets from Hindus while allowing Muslims to retain them? Judging by their past stance on inheritance tax and the longstanding support for Muslim Personal Law, which governs inheritance-related matters for Muslims, it does indicate that Congress is considering appropriating only Hindu properties and assets, which could then be used to fund Rahul Gandhi’s “redistribution” project among minority groups.
