Do wealthy politicians underreport their income? Evidence from general election data
The income reporting behaviour of wealthy Indians is a critical public finance issue. It has remained under-researched due to the lack of data sources required for the purpose. In this article, we use a new and unique source of information to examine the income reporting behaviour of politicians fro...
| Main Authors: | , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
University of Delhi
2022
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/141004 |
| _version_ | 1855534372081369088 |
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| author | Ray, Soumyajit Singh, Ram |
| author_browse | Ray, Soumyajit Singh, Ram |
| author_facet | Ray, Soumyajit Singh, Ram |
| author_sort | Ray, Soumyajit |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | The income reporting behaviour of wealthy Indians is a critical public finance issue. It has remained under-researched due to the lack of data sources required for the purpose. In this article, we use a new and unique source of information to examine the income reporting behaviour of politicians from across a wide range of wealth spectrums. The new dataset compiled and used by us is based on the affidavits filed by contestants in the 2014 and 2019 Lok Sabha elections. We find that, on average, wealthier candidates and their households report less income relative to their wealth. Consequently, most affluent families do not necessarily figure among those reporting the highest income to tax authorities. The income declared to tax authorities by the 10% least wealthy candidates is more than 300% of their wealth. In contrast, the income level reported by the wealthy group is a tiny fraction of their wealth. The wealthiest 5% of candidates have reported income amounting to only 3.4% of their wealth. The reported income of the wealthiest 0.1% is less than 2% of their wealth. The results are very similar for the households. We show that the abysmally low income reported by the wealthy groups stands in sharp contrast to the returns on assets owned by them. We argue that the missing income of the wealth groups is a result of the creative accounting and financial engineering used by them to avoid paying taxes. |
| format | Artículo preliminar |
| id | CGSpace141004 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2022 |
| publishDateRange | 2022 |
| publishDateSort | 2022 |
| publisher | University of Delhi |
| publisherStr | University of Delhi |
| record_format | dspace |
| spelling | CGSpace1410042025-12-08T10:06:44Z Do wealthy politicians underreport their income? Evidence from general election data Ray, Soumyajit Singh, Ram income public finance data taxes political aspects households policy makers behaviour finance The income reporting behaviour of wealthy Indians is a critical public finance issue. It has remained under-researched due to the lack of data sources required for the purpose. In this article, we use a new and unique source of information to examine the income reporting behaviour of politicians from across a wide range of wealth spectrums. The new dataset compiled and used by us is based on the affidavits filed by contestants in the 2014 and 2019 Lok Sabha elections. We find that, on average, wealthier candidates and their households report less income relative to their wealth. Consequently, most affluent families do not necessarily figure among those reporting the highest income to tax authorities. The income declared to tax authorities by the 10% least wealthy candidates is more than 300% of their wealth. In contrast, the income level reported by the wealthy group is a tiny fraction of their wealth. The wealthiest 5% of candidates have reported income amounting to only 3.4% of their wealth. The reported income of the wealthiest 0.1% is less than 2% of their wealth. The results are very similar for the households. We show that the abysmally low income reported by the wealthy groups stands in sharp contrast to the returns on assets owned by them. We argue that the missing income of the wealth groups is a result of the creative accounting and financial engineering used by them to avoid paying taxes. 2022-11-01 2024-04-12T13:37:04Z 2024-04-12T13:37:04Z Working Paper https://hdl.handle.net/10568/141004 en Open Access application/pdf University of Delhi Ray, Soumyjit; and Singh, Ram. 2022. Do wealthy politicians underreport their income? Evidence from general election data. Policy Paper 5. University of Delhi. |
| spellingShingle | income public finance data taxes political aspects households policy makers behaviour finance Ray, Soumyajit Singh, Ram Do wealthy politicians underreport their income? Evidence from general election data |
| title | Do wealthy politicians underreport their income? Evidence from general election data |
| title_full | Do wealthy politicians underreport their income? Evidence from general election data |
| title_fullStr | Do wealthy politicians underreport their income? Evidence from general election data |
| title_full_unstemmed | Do wealthy politicians underreport their income? Evidence from general election data |
| title_short | Do wealthy politicians underreport their income? Evidence from general election data |
| title_sort | do wealthy politicians underreport their income evidence from general election data |
| topic | income public finance data taxes political aspects households policy makers behaviour finance |
| url | https://hdl.handle.net/10568/141004 |
| work_keys_str_mv | AT raysoumyajit dowealthypoliticiansunderreporttheirincomeevidencefromgeneralelectiondata AT singhram dowealthypoliticiansunderreporttheirincomeevidencefromgeneralelectiondata |