50% wealth tax row explodes: FM Sitharaman says Congress aims to 'hit middle and aspirational classes'

Hours after Sam Pitroda advocated for a 50 per cent wealth tax, Finance Minister Nirmala Sitharaman on Wednesday said the Congress aims to hit the middle and aspirational classes. She said the Congress pan is to tax people while they are living and also after their death. She also termed it as Congress' 'tax terrorism'.   

"So, the @INCIndia plan is: While living—Tax. On death —Tax (Inheritance)...Aims to hit the middle and aspirational classes. Their savings or small holdings shall not go to their children," she said in a tweet.

Sitharaman also referred to former Prime Minister Manmohan Singh's remarks where he called demonetisation an "organised loot and legalised plunder." The minister suggested that if the Congress came to power, "Dr MMS' (Manmohan Singh) "Organised loot and legalised plunder" will be seen in action."

The finance minister also shared a clip of Prime Minister Narendra Modi's speech, where he launched a blistering attack on the Congress over Sam Pitroda's comments. 

Addressing a rally in Chhattisgarh, PM Modi said the Congress wants to fill its coffers by imposing ever higher taxes and not allowing people to pass on their wealth to their children. 

"The advisor (Sam Pitroda) of the 'prince' and the 'royal family' had said some time ago that more taxes should be imposed on the middle class," PM Modi said while speaking at a public meeting in Chhattisgarh's Surguja. 

"Congress says that it will impose an inheritance tax, and it will also impose a tax on the inheritance received from parents. Your children will not get the wealth that you accumulate through your hard work, rather the claws of the Congress will snatch it away from you."

The Prime Minister said Pitroda's remarks had exposed the dangerous intentions of the Congress. "Congress has one mantra -- to loot people zindagi ke sath bhi, zindagi ke baad bhi (in life and even after death)," he said. 

In an interview aired today, Pitroda said, "In America, there is an inheritance tax. If one has $100 million worth of wealth and when he dies he can only transfer probably 45 per cent to his children, 55 per cent is grabbed by the government. That's an interesting law. It says you in your generation, made wealth and you are leaving now, you must leave your wealth for the public, not all of it, half of it, which to me sounds fair."

"In India, you don't have that. If somebody is worth 10 billion and he dies, his children get 10 billion and the public gets nothing...So these are the kind of issues people will have to debate and discuss. I don't know what the conclusion would be at the end of the day but when we talk about redistributing wealth, we are talking about new policies and new programs that are in the interest of the people and not in the interest of super-rich only."

Pitroda, however, later said he mentioned the US inheritance tax in the US only as an example in his normal conversation. He said these are the kind of issues people will have to discuss and debate. "This has nothing to do with policy of any party including Congress."