New Delhi, Oct. 3 -- India should focus on taxing capital income such as corporate profits, dividends and realised capital gains rather than imposing taxes on wealth or inheritance, economist Daniel Waldenstrom said, arguing that such an approach would allow the country to address inequality without creating excessive hurdles to investment and savings.

Waldenstrom, Professor at the Research Institute of Industrial Economics, said on Saturday that capital should be taxed just as labour is taxed, but cautioned against levies on the underlying value of wealth.

"I think it's important that we tax capital, of course, as we also tax labour. The problem is that taxing capital is difficult. I think we should focus on capital income taxation," W...