According to Raghuram Rajan, taxing the wealthy won’t lead to economic growth.
Raghuram Rajan
Although Rajan acknowledged that inclusive growth will contribute to the advancement of economic development, he strongly opposed heavily taxing the wealthy.
Wealth taxes, according to former RBI Governor Raghuram Rajan, cannot be used to boost economic growth. The economist acknowledged the importance of inclusive growth for economic progress, but he voiced reservations about taxing the wealthy in order to reach this goal.
“We need to try and elevate rather than bring the successful down,” the former governor of the Reserve Bank of India stated at a Northwestern University event held at the Kellogg School of Management.
Notably, Indian Overseas Congress Chairman Sam Pitroda has pushed for an investigation of the US inheritance tax system and its application in India. The lawmaker defended the inheritance tax and emphasized the importance of debating and talking about topics related to wealth redistribution. There isn’t a government inheritance tax in the US, though.
“I’m not the opposition,” Rajan declared, denying any political leaning. It’s something I like to emphasize, and as an academic, I have an obligation to criticize what? They don’t think that either of us is operating effectively? That’s what I do, then. I believe that in order to maximize growth, we must figure out how to help those who are struggling to improve.
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While acknowledging that inclusive growth will propel economic progress, Rajan argued against heavily taxing the wealthiest.
Regarding the state of the Indian economy, the economist stated that every area that has not benefited or has had a K-shaped recovery has to be looked at. However, I believe that we must look into ways to help the economy’s underperforming segment that has had a K-shaped rebound. Look at the numbers since the pandemic—you can’t argue with them—how can we encourage them to flourish? Rajan said, “Because the cost of not doing that is first wasted resources.”
