Abolish Personal Income Tax
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India, our country, having population of 125 Crore is a country where only approximately 3 Crore of us pay personal Incone Tax amounting to roughly Rs. 3 Lakh Crore.
At the outset this figure of tax payer may appear very less in compare to our population. But on closer examination you will find that there is no scope to expand the tax base at present on account of our poverty, dependence on agriculture, massive unorganised sector employees, 13% or above educated unemployment rate, majority of organised sector employee earning less than taxable income etc.
In view of the same the cost of running the Income Tax department to collect personal income tax would probably outweigh the merit of having the department of income tax itself. .
Historically speaking, the concept of Income Tax is relatively very new. It started in 1799 in Great Britain to finance arms and ammunition for French Revolution. However, two years later it was scrapped. It came back in Great Britain in middle of 1800 to meet the budget deficit. In later part of 1800 it was introduced in another country and that is - United States to pay for the cost of its Civil War after slavery was abolished. But in early 1900 the United States Supreme Court declared it Unconstitutional. Later a constitutional amendment was made in United States to make Income Tax legal.
In India Income Tax first came for few years towards mid and end of 1800. Starting in the year 1922 under British it became a permanent fixture in India.
Looking back at the history and evolution of Income Tax one can certainly say that it was an after thought as a quick fix solution to an immediate problem that a nation encountered on account of war or it's deficit.
The moral or ethical question on Income Tax arises on the notion of an individual living his or her life for the State. While under monarchy it was clear that an individual is a subject and he or she lived for the King or the State... in a democracy the individual or the people are supreme being a citizen where the State belongs to him or her and not vice - versa. In the other words - under monarchy an individual's life belonged to the King but in Democracy an individual is a Free person having free will. In this scenario to collect income tax on an individual's income amounts to forcing them to live for the State infringing on his or her freedom and free will to earn and to spend.
Incase of business paying income tax or corporate tax one can understand the reasoning. A business thrives on the strength of the society and government's role in keeping the society thriving. Therefore a business owe it to the people to pay taxes for the profit it makes in order to create infrastructure for common good.
Indirect tax is a tax one pays on the goods or services one consumes. Apart from items of basic necessities to live life... every thing else being taxed is quite right since an individual is consuming out of free will to fulfil its desire and wants. Such money collected being spent by the State on defence, police, law and order, judiciary etc is for smooth functioning of the society and in interest of an individual to maintain his or her freedom and free will.
Keeping in view all the above contention - I, here by this petition request and ask our Prime Minister to abolish Personal Income Tax. It's a concept of British Rule which should be done away.
Logically speaking, the money thus put in our hands will either be saved or spent. In both scenario our county will gain. First will spur investment and second will spur consumption.
To meet the shortfall in revenue of the State... corporate tax or income tax on business can be raised by 5% to 10%. Since consumption will increase the business will not mind paying extra as their overall profit will increase. As there will be more saving - the access to more capital at lower rate will be available to business to expand its business. The business gains further.
It is said government is the worst spender because of its inefficiency, lethargy, leakages and overall red tape. It is further said that an individual is much better and smarter spender in compare to government because of non presence of the above.
The idea of Personal Income Tax can be revisited later in few decades when India and Indians by large becomes wealthier and richer second to none in the world.
Once again requesting and asking you Mr. Prime Minister to abolish Personal Income Tax in larger and long term interest of our country and us... we the people.
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