January February and March are
the most taxing times literally as far as our middle class finances go. Our
incomes take plunge thanks to Income tax deductions. These months are similar
to that of our typical struggling mornings of squeezing out the tooth paste
which refuses to yield in its last days. Sometimes, budget news, raising tax
limits though is a solace even if it means few drops of rain on parched and
baked earth of June. Calculating Tax liability and filing returns, any way has
been the most mind-bogglingly complex maze year after year thanks to variety of
exemptions, rebates and many more. My brain especially has never been able to
comprehend those Tax Bonds and smart wading through options to save some
trickles. More than often I have preferred paying whatever because the “closing
balance’ in my account almost always takes a grin at my well researched
thoughtful investment plans.
Any ways after finally having
paid through our nose and tears, we hear that the monstrous government Tax
deficit wanted to feed on more but for some Parliamentary decency, it has been left
for later days. This is the time I struggle with some basics: whether we should
be taxed at all? What should be taxed, our compensation or the consumption? And
what should be the rates of taxation, regressive or progressive. I was told
that most efficient Tax system is the most simplest. Then why the hell even the
holy land of America and the Harvard, practice the most complex tax systems ever
known to mankind? First Pay and then Tax and then offer tax sops. Try poking and
those never to be answered questions will be posed by the never sure economist
who adjusting their aging specks would say it all depends on what you want; to
be fair or equitable? And they will end up with that feared word “Tradeoffs”.
Any ways my education says Tax is
a necessary evil, because there are needs that only taxes can address, like
availability of Public Goods. But the entire problem is because of scarcity.
Like scarce natural resource there is scarcity almost always regarding tax
volumes. So the question boils down to can there be more efficient ways of
collecting money. More so, can there be more avenues that do not threaten our
inflation flattened incomes. What can be done to raise revenue without further
taxing those who are struggling, fretting and pleading?
And the answer is a definite
Yes!!! We can improve the manner of tax collection. Context specific Tax
collection ideas can do wonders. Consider Consumption tax where taxation follows
volume of consumption. Taxing essential goods though is controversial, especially
when the income percentage of the poor is spent most towards basic consumption which
is certainly not fair. It will be argued that rich will continue to be
subsidized by poor and that will not be equitable. Consumption tax probably can
work best in a scenario where anyone can adjust their volume of consumption
irrespective of their position on the economic ladder without hurting
themselves.
If littering can be considered as
a pleasurable consumption, those who value this can be taxed regressively. And
here I see a great opportunity in “Littering Tax” in increasing the tax
volumes almost exponentially. Do not be mistaken, though we keep our homes spotlessly
clean, we are great at littering in public. And this great adventurous culture
I am sure will help collect taxes in millions, because we value it so much. And
even if such a system forces us to get back to basics, it will generate growth
and promote environment. Imagine the savings we will make on sweeping charges
all cities taken together. The money saved can be used to build new roads, open
new schools, hospitals all adding to our quality of work force and hence their productivity and even on a nonexistent Social Security.
This tax will not be so difficult to
collect and will be hard to evade because of the sheer visibility. They won’t
add complexity to tax returns. Few perverse incentives, and can be used to
raise a lot of money. This new source of money could also help change the face
of tourism and can bring much needed dollars that we crave every day. 
Consumption taxes are supported by a vast majority of
economists. They underpin Western Europe’s welfare systems, which are based on
the proposition that all citizens are entitled to similar income support and
services to guarantee a minimum standard of living, and that everybody should
pay proportionately for them.
Another variety could be Public Wall defacement Tax or Graffiti
Tax............................. Who knows Compensation tax may become history in
India because of this small tax code?
What an Idea Sirji? hahhahha
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