Not just culture.

The Governor of the Reserve Bank, Raghuram Rajan thinks inheritance tax, or death duty as it is known, is a bad idea. He wants rich people to leave less money for their children and instead give away their money to charity. India has been a socialist country since independence which has meant very high taxes to redistribute to the poor. Inheritance of wealth is particularly obnoxious to socialists because it is seen as undeserved. Birth is a matter of chance and it is not right that children born to rich parents should enjoy all the advantages of a good education and then be left a vast fortune so that they are on easy street for the rest of their lives. It perpetuates inequality from generation to generation and punishes those who lost out in the lottery of birth. People hate paying taxes and the rich can afford to pay consultants to advise them on how to avoid paying death duty. " I would argue rather than a blanket inheritance tax, let's change the culture. Make it such that people don't want to leave a lot of wealth for their children," said Rajan. " A dramatic estate tax generates value for lawyers as they figure out ways to hide the estate so that it does not get taxed." Rajan probably wants Indians to be more like Americans where contributing to charities is a part of life. But here too the amount of contributions varies from state to state and between people. Those who earn between $50,000 and $75,000 contribute 7.6% of their income while those in the top 1% contribute a mere 2.8%, although one could argue that 2.8% of $1 billion will be considerably more than 7.6% of $50,000. This maybe because the US is a highly individualistic society while families are still important in India. However, as India moves towards nuclear families with fewer children people, such as the elderly, will be dependent on institutions for old age care and will donate more to charities, as they are doing in the US. But there are other reasons why Indians do not contribute to charity as in the west. The middle class pays some of the highest taxes in the world but has no safety net such as social security, universal health cover or old age pensions. The discussion is always about how to deny subsidies to the middle class so that the poor get targeted handouts without any responsibility to the nation. Today property prices are so high that no one can open a shop, a clinic or any business unless your parents have left you some real estate or a huge sum of money with which to buy one. Indians are very suspicious of institutions because almost all are controlled by politicians. Thus endowments to US universities are in billions of dollars, Harvard having the highest at $35 billion, but when Murli Manohar Joshi wanted endowments to IITs to go through Bharat Shiksha Kosh everyone refused. Culture changes slowly. We need to change politicians. Fast.