Taxation and Skilled Indian Migration to the United States: Revisiting the Bhagwati Tax

While the Bhagwati tax became a hot issue, including in the United Nations, in the 1970s many felt that it had little chance of being adopted, and turned to other aspects of immigration research. But now that the incomes of skilled migrants have reached exceptionally high levels, and even a small surcharge levied on U.S. income of Indian citizens in the United States would raise sums of money that could add significantly to the Indian budget, the issue has come back into economic research and public debate. This chapter offers an excellent analysis of the Bhagwati tax. The India-U.S. dyad is an outlier in terms of its concentration of human capital. On the other hand, the skilledemigration rate from India is actually relatively low, limiting the revenue potential for the Indian government.