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Tax the hard working people

CA Konfused (Chartered Accountant & CFA Level 1) (302 Points)

31 October 2010

It has been observed that our taxation system seems to be quite wiered,For eg Salary Income which requires lot of manual work is taxed without any benefit of deduction barring a few like House Rent and all.A business man who carries on lesser manual work can claim many expenses against his income and in real practical world he tries to cover his personal expenses through smart decoration of accounts.Finally the investor who requires very minimal amount of manual work is not at all taxed if invests in share market.hmm.......it seems the goverment is giving a clear indiacation Be smart not hard working or else you would be taxed further and forced to do manual work for your entire life.

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Anubhav (Student) (589 Points)
Replied 31 October 2010

Let me add something to what you said.The word 'weird' is a bit short on accuracy. Let me tell you its disgusting.The Indian taxation sysem tells you on your face that if you don't evade tax you are an idiot. If you are an employee of a private company then you are a fool. If you are an employee of Government organization then you have to be corrupt. I have seen people show disdain when Amitabh or Sachin try to save some tax through proper tax planning but they themselves commit corrupt practices and say ' karna padta hai aur amitabh to croro me kamata hai'.Most Businessman do not know what is tax planning they only know tax evasion.

Also it has to be understood that Direct taxes are taxes accruing on income but Direct taxes accrues on every consumed good. Which means that if a poor man earns less than Rs.160000/- (which is already so meagre), he will be exempt from paying taxes but have to pay heavy indirect tax on each and every thing that he purchases. And our Finance ministers proudly declare decreasing direct tax and increasing indirect taxes collection. Films like 'Well Done Abba' show exactly how rich and poor both are being looted to satisfy the thirst of corrupt, powerful and 'Go with the system' type of people. Ultimately rich can console himself that he already has so much.But what does Poor do. During my articleship period I have seen some disgusting instances of corruption happening while using public funds as many other should have and the thing is that everyone seems to dislike it but still they carry on with it. If someone tells them not to do bad work then typical argument that we get back is 'koi aur karlega'.

But you know its not that taxes are bad or Capitalism or Democracy are bad but its the people who give it good or bad character. If public funds are used carefully our same taxation system will work superbly.And for conclusion please never forget the Pareto principle.