7 ms·

India's super-rich peak tax rate, at 42.7%, now higher than USA

31 points by superasn 7y ago

deleted 7y ago
[deleted]
superasn 7y ago
Here is a more readable version: https://outline.com/FSMxUN https://outline.com/FSMxUN
vmurthy 7y ago
The devil is in the details. It will affect about a 100000 Indians [1]. However there are various tax breaks on second homes and stuff so the numbers may go down further. [1] https://indianexpress.com/article/india/number-of-crorepatis-has-risen-by-60-per-cent-in-india-cbdt-5412768/ https://indianexpress.com/article/india/number-of-crorepatis...
LUmBULtERA 7y ago
What about once you add local and state income taxes, and factor in other forms of taxation? Looking at National income taxes is only part of the story.
- vmurthy 7y ago
  Uh , if you’re talking personal income tax , we have only at a federal/national level
  - LUmBULtERA 7y ago
    That's my point -- it's not necessarily higher than the US after you consider the fact that in the US you will most often be paying other taxes as well.
- sgt 7y ago
  It's India, not Indiana.
- sn41 7y ago
  There are no state level income taxes in India, afaik. However, the Goods and Services Tax on many items is very high - 28%. So if you earn 100 rupees at the top slab, then you effectively have 58.3 after the income tax, and say you use it to buy some good at the highest GST bracket. You essentially can buy only worth Rs. 41.97. Add to this the fact that there are stiff tariffs for imported goods like iPhone, say for example, 20%. Then it comes down to Rs. 33.57 worth of purchasing power at the international level.
jeanlucas 7y ago
This is not considering corruption, so many rich families avoid this taxation.
- vmurthy 7y ago
  Couple of things to note: if you’re an employee and rich and earning, chances are minimal because your employer deducts taxes every month and deposits to the Government. If you own a business and you are rich you can choose a lot of ways to dodge taxes. Some legal , some not.
  - gingabriska 7y ago
    Even in India once you've too much experience and are able to charge top dollars, you best make a consultancy and charge as a company.
systemtest 7y ago
Meanwhile the Netherlands has the 51,7% bracket starting at €68,507 per year, which isn't even close to upper class income.
- lm28469 7y ago
  And yet half the world wants to move to EU countries with high tax rates. It's almost as if the tax rates and the average quality of life were linked.
  - gingabriska 7y ago
    EU has better infrastructure and atleast you get something in return of taxes you pay. In India, quality of public services is crap and middle class doesn't receive any benefits from taxes paid.
- sn41 7y ago
  I'm guessing medicare is free in the Netherlands. India has a public health sector which works only on paper. And its basic education access for the poor has been deteriorating in many of the central/northern states.
  - systemtest 7y ago
    Medicare is 6.95% of your income, paid for by your employer. 5.70% if you freelance and are self-employed. Next to that, a year of insurance will cost you €1100 - €2000 with a €385 - €885 deductible. Dental, physiotherapy and certain medicine are not covered.
  - another-dave 7y ago
    I'd say that's all the more reason to try and redistribute some of the wealth to the most affected. (Whether the Indian government will effectively collect and use the taxes is another matter, but can appreciate the efforts in a country with such a wide gap between rich/poor) 50 crore == 50 million, so a USD equivalent of $729,550 a year. Would go a long way in India. Can't find reliable figures for wages, but from a quick Google, one site put it at about <$2k a year. Taking that as a rough order of magnitude it would be the equivalent of levying a tax on American earning over $7M per year (if average wages are about ~$20k).
gingabriska 7y ago
Indian taxation is mystery to me, traveling through the India I realized it's the middle class (employees at a company) who pay maximum taxes but receive little to no benefits. While villagers got free solar panels, funds for constructing bathroom, homes etc....some even got money during floods even when their place wasn't much affected. And super rich have armies of lawyers and accountants ready to forge battle and use techniques to minimize their tax. I felt bad for the middle class who in my opinion worked really long crushing hours and often stayed far away from families. The kind of food/products army receives only upper middle class can afford them with their own money. And army even sells some of that subsided food to local people in return of cash. I don't understand how can middle-class keep their heads down and simply pay whatever they are asked to pay? Needless to say, many want to move to freer countries with less import duties, less taxation and more employment opportunities and better market. Unless you are super rich, good luck buying Lamborghini in India. India is not a country where you can really enjoy fruit of your labor. Every Government will come and they'll give away free money to people who are bottom of the rungs and leach this money off the middle class and this has been going on forever. Super rich were never affect and still aren't affected. And in India you need to work 5x as hard if not less to make same wages as your American counterpart, even then if you manage to make the same wage as someone I America, you'll find your money can only buy 1/3rd of the benefits an American can buy. If your idea of a good life is to work hard and feed a family, congrats, it's possible in India but if you've more ambition and you want drones, you want cars, you want anything latest, hell even an iphone, you can't afford that unless you make 3x of someone in America. It's the legal version of Robin hood going around who just woo people at the bottom by fleecing from them who are the middle and letting super rich fleece from both government and the middle class. I am just a foreigner in India with an Indian wife, so my understanding might be limited but I went to meet many public sector and private sector employee and guess what? Even if a public sector person on paper makes less wages than private sector one, they always had bigger houses (their own) and bigger cars and often more properties. How do I know? My wife was friends with many of them and they were always talking about property prices.
- srean 7y ago
  > good luck buying Lamborghini Was not aware that I was supposed to buy that. But with that Lamborghini out of the way your description is qiite spot on. The irony is that the elected party is supposed to be the middle class' darling. That other parties have ignored the middle class has been one of their favorite narratives.
Proven 7y ago
Good for all Americans! That's why rich Indians immigrate to the US and not vice versa. If US taxes were lower, even more rich people would immigrate to the US. More investment, more jobs. But if socialists take over, there will be an exodus.

31 points by superasn 7y ago

deleted 7y ago

[deleted]

superasn 7y ago

Here is a more readable version: https://outline.com/FSMxUN https://outline.com/FSMxUN

vmurthy 7y ago

The devil is in the details. It will affect about a 100000 Indians [1]. However there are various tax breaks on second homes and stuff so the numbers may go down further. [1] https://indianexpress.com/article/india/number-of-crorepatis-has-risen-by-60-per-cent-in-india-cbdt-5412768/ https://indianexpress.com/article/india/number-of-crorepatis...

LUmBULtERA 7y ago

What about once you add local and state income taxes, and factor in other forms of taxation? Looking at National income taxes is only part of the story.

vmurthy 7y ago
Uh , if you’re talking personal income tax , we have only at a federal/national level
- LUmBULtERA 7y ago
  That's my point -- it's not necessarily higher than the US after you consider the fact that in the US you will most often be paying other taxes as well.
sgt 7y ago
It's India, not Indiana.
sn41 7y ago
There are no state level income taxes in India, afaik. However, the Goods and Services Tax on many items is very high - 28%. So if you earn 100 rupees at the top slab, then you effectively have 58.3 after the income tax, and say you use it to buy some good at the highest GST bracket. You essentially can buy only worth Rs. 41.97. Add to this the fact that there are stiff tariffs for imported goods like iPhone, say for example, 20%. Then it comes down to Rs. 33.57 worth of purchasing power at the international level.

jeanlucas 7y ago

This is not considering corruption, so many rich families avoid this taxation.

vmurthy 7y ago
Couple of things to note: if you’re an employee and rich and earning, chances are minimal because your employer deducts taxes every month and deposits to the Government. If you own a business and you are rich you can choose a lot of ways to dodge taxes. Some legal , some not.
- gingabriska 7y ago
  Even in India once you've too much experience and are able to charge top dollars, you best make a consultancy and charge as a company.

systemtest 7y ago

Meanwhile the Netherlands has the 51,7% bracket starting at €68,507 per year, which isn't even close to upper class income.

lm28469 7y ago
And yet half the world wants to move to EU countries with high tax rates. It's almost as if the tax rates and the average quality of life were linked.
- gingabriska 7y ago
  EU has better infrastructure and atleast you get something in return of taxes you pay. In India, quality of public services is crap and middle class doesn't receive any benefits from taxes paid.
sn41 7y ago
I'm guessing medicare is free in the Netherlands. India has a public health sector which works only on paper. And its basic education access for the poor has been deteriorating in many of the central/northern states.
- systemtest 7y ago
  Medicare is 6.95% of your income, paid for by your employer. 5.70% if you freelance and are self-employed. Next to that, a year of insurance will cost you €1100 - €2000 with a €385 - €885 deductible. Dental, physiotherapy and certain medicine are not covered.
- another-dave 7y ago
  I'd say that's all the more reason to try and redistribute some of the wealth to the most affected. (Whether the Indian government will effectively collect and use the taxes is another matter, but can appreciate the efforts in a country with such a wide gap between rich/poor) 50 crore == 50 million, so a USD equivalent of $729,550 a year. Would go a long way in India. Can't find reliable figures for wages, but from a quick Google, one site put it at about <$2k a year. Taking that as a rough order of magnitude it would be the equivalent of levying a tax on American earning over $7M per year (if average wages are about ~$20k).

gingabriska 7y ago

Indian taxation is mystery to me, traveling through the India I realized it's the middle class (employees at a company) who pay maximum taxes but receive little to no benefits. While villagers got free solar panels, funds for constructing bathroom, homes etc....some even got money during floods even when their place wasn't much affected. And super rich have armies of lawyers and accountants ready to forge battle and use techniques to minimize their tax. I felt bad for the middle class who in my opinion worked really long crushing hours and often stayed far away from families. The kind of food/products army receives only upper middle class can afford them with their own money. And army even sells some of that subsided food to local people in return of cash. I don't understand how can middle-class keep their heads down and simply pay whatever they are asked to pay? Needless to say, many want to move to freer countries with less import duties, less taxation and more employment opportunities and better market. Unless you are super rich, good luck buying Lamborghini in India. India is not a country where you can really enjoy fruit of your labor. Every Government will come and they'll give away free money to people who are bottom of the rungs and leach this money off the middle class and this has been going on forever. Super rich were never affect and still aren't affected. And in India you need to work 5x as hard if not less to make same wages as your American counterpart, even then if you manage to make the same wage as someone I America, you'll find your money can only buy 1/3rd of the benefits an American can buy. If your idea of a good life is to work hard and feed a family, congrats, it's possible in India but if you've more ambition and you want drones, you want cars, you want anything latest, hell even an iphone, you can't afford that unless you make 3x of someone in America. It's the legal version of Robin hood going around who just woo people at the bottom by fleecing from them who are the middle and letting super rich fleece from both government and the middle class. I am just a foreigner in India with an Indian wife, so my understanding might be limited but I went to meet many public sector and private sector employee and guess what? Even if a public sector person on paper makes less wages than private sector one, they always had bigger houses (their own) and bigger cars and often more properties. How do I know? My wife was friends with many of them and they were always talking about property prices.

srean 7y ago
> good luck buying Lamborghini Was not aware that I was supposed to buy that. But with that Lamborghini out of the way your description is qiite spot on. The irony is that the elected party is supposed to be the middle class' darling. That other parties have ignored the middle class has been one of their favorite narratives.

Proven 7y ago

Good for all Americans! That's why rich Indians immigrate to the US and not vice versa. If US taxes were lower, even more rich people would immigrate to the US. More investment, more jobs. But if socialists take over, there will be an exodus.