New Delhi, May 25 (KNN) A new research paper co-authored by the renowned economist Thomas Piketty has recommended imposing a 2 per cent tax on net wealth above Rs 10 crore and a 33 per cent inheritance tax on estates valued over Rs 10 crore to address India's rising inequality levels.

The paper, titled "Proposals For a Wealth Tax Package to Tackle Extreme Inequalities in India," argues that such taxes on the ultra-wealthy could raise a massive 2.73 per cent of India's GDP in revenues while leaving 99.96 per cent of Indian adults unaffected.

"These tax proposals, combined with policies to support the poor and middle class, could help tackle the massive concentration of wealth at the top in India," said Piketty, a professor at the Paris School of Economics.

The authors note that income and wealth inequality in India has reached historically high levels, with the top 1 per cent holding 22.6 per cent of national income and 40.1 per cent of total wealth in 2022-23.

The proposed wealth tax revenues could nearly double public education spending to meet the 6 per cent of GDP target set by the government's own policies, the paper states. 

However, it adds that the tax design should emerge from broader democratic debates on tax justice and redistribution.

Co-authored by Lucas Chancel of Harvard and Nitin Bharti of NYU, the paper follows the release of their study last month that highlighted India's rise as a "Billionaire Raj" amid skyrocketing economic disparities since the early 2000s.

Critics have raised concerns about potential capital flight and economic distortions from such taxes. 

But supporters argue bolder steps are needed to create a more equitable society.

(KNN Bureau)