An issue close to our hearts, or rather to our wallets. Taxation!
It is time to get serious and tough about the tax policies in our country. Look at the size of our deficit. It grows every year. We could cut spending and we need to do that, but there is clearly a need for more revenue. We cannot and should not reduce defense spending and we cannot cut all of the middle class entitlements. We cannot cut expenses on any major fronts. And, we cannot continue to try and rob the rich.
Tax evasion has been a major activity in our lives specifically because the government has been punitive against the rich in India. Because of this entrepreneurs are not motivated to invest into modernization of technology or Research and Development and instead try to either invest into tax-free environments or into farmland schemes. And who are the people who are hurt the most by this? The white collared middle class suffers the most.
Instead of trying to bring down the achievers in our country, who make a lot of money; instead of trying to punish these people for working hard and succeeding; what we should do is teach others how to succeed. We have to keep trying to motivate others to put in their hard work rather than be pacified by indictments of the rich and promises that they will be made to pay more than their fair share because they are rich. Of course, the government’s answer to increase revenue is simple; just raise taxes on the middle class. One of the reasons that India has a constant recession is because the middle class does not have any more money to give to the government. The middle class has been taxed at a confiscators rate for 68 years and is now broke.
Taxes go up every year. And they go up the most on the middle class because that is where the bulk of the money is, that cannot be hidden from the government. Consider the taxes we pay on cooking gas, petrol, food, clothing, and entertainment. When you add it all up, is it any wonder that we are perennially broke? The average middle class family cannot afford to give their children good schooling or health because, instead of using their money to support their children; they are supporting a giant, bloated cow in New Delhi called the Government of India.
Frankly, we need to force people to contribute to the economy, not just sit around blaming everyone and everything. We need to have a system to get the poor out of their situation, rather than glorifying and perpetuating it. Encourage them to be economically equal members of our society, rather than a collection of sycophants siding up to the bloated cow in New Delhi and looking for the biggest feeding nipple they can find.
Then, there is the hidden wealth in the land, the unaccounted for, un-taxed “black wealth” that runs almost 50% of our economy. If that money could be brought into main stream economy, the nation will again be rich in monetary terms. The current tax system is not only archaic, but also punitive. This has spawned a huge, corrupt bureaucracy who stifles free enterprise and has the overall effect of making people cheat on the taxes; but has also given the government a weapon which it uses to silence dissent against itself, and its corruption.
The people of this land are habituated to saving as much of their income as possible. They save in the form of land, gold, jewelry or cash, often stashed at home. All these are assets; assets that can enhance the treasury many more times, if they can be bought into the open. Then, there are the draw-backs that need to be eliminated; subsidies that cost the national exchequer huge amounts with no positive results, high import duties which inhibit rapid growth of the technology sector as well as restrict the consumer boom, and the quota system of permits and licenses which fuel the corruption of the bureaucracy.
We can achieve a lot and make progress while the changes take place, but first we have to get rid of our image of being a poverty stricken land. We have to stop going around the world with a begging bowl in our hands. For, the people of our land do not have to beg from anybody. Our land has material wealth, intellectual wealth and the monetary resources. All that we have to do is use this to our national advantage.
Pic Courtesy: (1) Google, (2) padhokhelo.com, (3) slideshare.net (4) trendolizer.com