Sam Pitroda tells the middle class not to be selfish in the event of a tax hike

Sam Pitroda, one of the most powerful people in the Congress party has admitted that the burden of the NYAY scheme will fall on the middle class. When asked whether taxes will not go up and whether the middle class will be affected by it, Pitroda said, “Taxes may go up but I do not think that’s a major issue”. In the very next sentence he went on to speak in a condescending tone about the middle class and asked them to not be selfish. He stressed that, “Don’t be selfish, have big heart,” in a very demeaning and insulting manner. It is very clear that if the Congress comes to power riding on the poll plank of the Quasi Universal Basic Income (QUBI) the burden on the middle-class will increase.

The NYAY scheme of Congress party would cost around 3.6 lakh crore rupees or 14 percent of total government expenditure. It would cost around 2 percent of GDP and the central government’s net collection is around 10 percent of GDP. To increase the tax to GDP ratio by 2 percent, the Congress party will bomb the middle class and corporates with taxes. Congress has been reluctant to admit that the scheme would be financed by raising the taxes on middle class. However after the interview of Pitroda, the brain behind the scheme it is very clear that the taxes on middle class would be increased exponentially to source the money for the scheme. 

Earlier, economist Abhijit Banerjee, the brain behind Congress’ NYAY scheme has admitted that the taxes on middle class would be increased to fund the scheme. In an interview with Rahul Shivshankar of Times Now he categorically said, “No NYAY without tax increase.” In another interview with Rajeev Dubey of Business Today he said that there is scope for direct as well as indirect tax increase. When Banerjee was asked what taxes should increase and what are the new taxes that can be imposed, he said, “Income taxes. In principle, there’s scope for wealth taxation and in some sense there’s scope for increasing GST.”

Banerjee was very specific that the middle class will have to take the burden of the scheme. “As we get middle income, we have to say that the middle classes have to be able to pay something,” said Banerjee. He even blamed the middle class of India of being reluctant to pay the taxes for the welfare of the poor. “There’s this idea that the middle class wants something without paying for it,” he added. He also admitted that after the implementation of NYAY scheme, subsidies will be removed. In fact, that would be first step to source the money for the scheme. “We’re going to try to replace a lot of the distorting subsidies by non-distorting subsidy. That’s the first step,” said Banerjee.

The World Inequality Lab, an institution based in Paris School of Economics is also providing the intellectual support for the implementation of the scheme to Congress party. French economist, Thomas Piketty who has been popularly called ‘Karl Marx of twenty-first century’ is among the directors of World Inequality Lab. Piketty is known for recommending ‘revolutionary’ measures to reduce inequality. He recommended that the state should rob the middle class to finance the welfare scheme for poor people. He recommends a top income tax rate of 80% and a next-to-top income tax rate of 50 to 60% to increase the tax to GDP ratio. 

Every technocrats associated with Congress party has admitted that taxes on the middle class would be increased to finance NYAY scheme. So, there is not an iota of doubt that the burden of Congress’ scheme would fall on the shoulders of middle class and as Pitroda said, they should have a big heart.