‘Tax us! Tax us! Tax us!’ is the message from dozens of millionaires from the U.S. and six other countries for their governments.Calling themselves the Millionaires for Humanity, more than 80 wealthy individuals — including Walt Disney Co. heiress Abigail Disney, former BlackRock Inc. managing director Morris Pearl, and Danish-Iranian entrepreneur Djaffar Shalchi — are petitioning for higher taxes on the rich to help pay for the billions in new government programmes made necessary by the COVID-19 pandemic.“Today, we, the undersigned millionaires and billionaires, ask our governments to raise taxes on people like us. Immediately. Substantially. Permanently,” says the open letter.“We are not restocking grocery store shelves or delivering food door to door. But we do have money, lots of it. Money that is desperately needed now.”Their missive, in mid-2020, wasn’t the first such appeal. Even before the pandemic upended public finances, a cohort of 200 or so wealthy people calling themselves the ‘Patriotic Millionaires’ — a group that include Disney and Pearl — was pressing for a more progressive tax system. In their open letter, the ‘Millionaires for Humanity’ warn that the outbreak could push millions more people into poverty and strain already inadequate healthcare systems, staffed largely by underpaid women.Charity isn’t the answer.Also read: It’s Time for a Solidarity Tax“Government leaders must take the responsibility for raising the funds we need and spending them fairly,” says the letter. “We owe a huge debt to the people working on the front lines of this global battle. Most essential workers are grossly underpaid for the burden they carry.”This initiative needs to be seen in the backdrop of the recent Pew Research Centre report about India’s middle class shrinking by 32 million in 2020. This accounts for 60% of the global retreat in the number of people in the middle-income tier, defined here as people with incomes of $10.01-$20 a day.Also read: Pandemic Pushed 32 Million Indians Out of Middle Class: Pew Research CenterThe Pew Research Centre report further states that the coronavirus pandemic may also have driven 75 million below the poverty line in 2020. This, too, accounts for nearly 60% of the global increase in poverty. That is why perhaps the media reports from India point to a spike in participation in its rural employment programme – originally intended to combat poverty in agricultural areas – as the many who have lost jobs in the reeling economy seek work.A migrant worker and her child wait to be screened for COVID-19 symptoms before boarding a bus from east Delhi to UP. Photo: PTIThe number now participating is setting record highs in the programme’s 14-year history, the report says. This report, based on World Bank data, says that compared to India, China seems to have fared much better, with the number of people in the middle-income tier decreasing by 10 million as compared to India’s 32 million, and with the poverty level remaining virtually unchanged in 2020.Before the pandemic, it was anticipated that 99 million people in India would belong in the global middle class in 2020. A year into the pandemic, the number is estimated to be 66 million, cut by a third. The number of poor has more than doubled.According to the Pew report, “The poverty rate in India likely rose to 9.7% in 2020, up sharply from the January 2020 forecast of 4.3%.”Pew Research Centre divides the population in a country into five groups: poor, low income, middle income, upper-middle income and high income. The poor are those who live on $2 or less per day, low income on $2.1 to $10 per day, middle income on $10.1 to $20, upper-middle on $20.01 to $50 and high income on more than $50.Another report by United Nations Conference on Trade and Development (UNCTAD) also talks about a K-shaped recovery in many developing countries, implying that sections of people in country will do very well and reach new levels of prosperity, while other sections will have a downward trajectory in terms of their income and standards of living.Also read: If the Government Wants a Spending Push in 2021, Which Resources Can it Tap Into?Even before the pandemic struck us, the disparity in Indian society had reached alarming levels.According to the Oxfam report brought out in January 2020, India’s richest 1% hold more than four times the wealth held by the bottom 70% of the country’s population. The document, released before the start of the five-day World Economic Forum, said the combined wealth of 63 Indian billionaires is higher than the total Union Budget for the fiscal year 2018-19, which was at Rs 24,42,200 crore.These disparities have only grown during the pandemic as many reports have brought out. As Professor Himanshu from the Jawaharlal Nehru University adds, “What is particularly worrying in India’s case is that economic inequality is being added to a society that is already fractured along caste, religion, region and gender.”On the other hand, the tendency of a few people reaching new levels of wealth have also been documented with India adding 40 new billionaires in the pandemic year. Mukesh Ambani, with US $ 83 billion, has had a 24% jump in fortune in the year of the pandemic, climbed up a spot to become the eighth richest person globally and the richest in India. Gautam Adani’s wealth almost doubled to US $ 32 billion in 2020. He climbed 20 places to become the 48th richest person globally and second in India.From the left: Mukesh Ambani, Gautam Adani and Shiv Nadar. Photo: Reuters and PTIThen there are also Shiv Nadar of HCL, Jay Chaudhry of Zcaler, Byju Raveendra and family, Anand Mahindra and others who have benefited immensely during the pandemic year 2020.The large corporates have not had to bear the brunt of the pandemic in any way. In fact, there is much more than just a reluctance to shift even the slightest burden on the corporate sector globally.Taxes on corporates are generally frowned upon by corporates as well as by most governments as they are looked at as discouraging private investment and hence, economic recovery and growth as well.As Jack M. Mintz argues in his article in Bloomberg Tax, in order to “encourage growth and private investment, the GDP-weighted average marginal effective tax rate (METR) in the OECD fell from 30.2% in 2010 to 23.8% in 2019 (average corporate tax rates fell from 33.3% in 2010 to 25.9% in 2019, with substantial rate cuts in the US, France, the UK and India).”Even earlier in the pandemic, several governments have had to abandon ideas of taxing the rich. As recorded by Bloomberg Tax, Ecuadorian President Lenin Moreno had to shelve plans to increase taxes of wealthy individuals, companies and foreign-owned real estate as it became clear that he lacked congressional support for the move. Jennifer Roeleveld, a tax researcher at the University of Cape Town, said she opposed calls for South Africa to impose wealth tax because it would “turn people off” from investing and working there.“They are very portable”, she said of the wealthy. “They will just move everything out of the country”.Also read: Is Govt Spending the Panacea for India’s COVID-Induced Economic Woes?In the context of India for example, due to the pandemic there has been a large shortfall in the overall collection of taxes by the Indian government. However, the shortfall has been much larger from corporate taxes (35%) than income tax (29%) or indirect taxes (15%), the last borne disproportionately higher by the poorer sections of society. Hence the government extracted much more from the poor even in the time of the pandemic.Migrant workers with their families wait to board buses to their home state of eastern Bihar in Ghaziabad near New Delhi, May 18, 2020. Photo: Reuters/Adnan AbidiIn this entire period, has anyone heard voices from these millionaires, asking to share even a teeny-tiny portion of their quickly-earned wealth with their fellow citizens, who were rendered destitute despite working hard and for no fault of theirs?No one would want to say that the millionaires in the US and six other countries who begged their governments to tax them substantially are paragons of virtue or that they are not exploitative or that their present huge stocks of wealth are not all ill-gotten.However, what they seem to be aware of is the long-term interest of the present system; and that such huge disparities and immense misery that one is seeing now is unsustainable and would lead to the crippling of people and of the system and structures of society and the government. They also recognise perhaps that short-term and myopic gains have to be kept at bay in the interest of one’s long-term sustainability if the society and the way it is functioning today is to be protected from immediate and irremediable crises.Why is this obvious to some and why are some others oblivious to these realities? May be there is something wrong with us?Sujata Gothoskar has been researching and organising on issues of gender, work and organisational processes for over 30 years.
