SIMPLIFYING THE TAX LAWS

Ch-3 (Part of series on FFIT)

No matter how much you prune, fertilize and water a low quality fruit tree it will not produce sweet high quality fruit. Similarly, reforming the present income tax
laws and other intrusive tax laws will not produce any net advantage to the nation. It will merely compound an existing problem because the concept of taxing income and production has many adverse effects and results.

Why should we pay part of our hard earned income to the government?
Instead of the government being thankful to us for parting with our hard earned income they want to keep track of each and every Rupee we earn and how we spend it. In the name of simplifying taxes and reforming taxes they burden us with complication beyond not only a common mans understanding, but also beyond most college graduates and even most professional accountants have to attend seminars to understand and clarify what new changes are made in the tax laws each year.
Income tax is an old concept, definitely dating as far back as the Roman Empire and probably as far back as the Egyptian Pharaohs and other Kings worldwide. Their tax system may not have been the same as our income taxes as we know it today, which requires so much details and paper work and wastes so many man-hours and resource. Theirs could have been a simple tax. Such form of taxation has always led to a slow down in economic growth, an underground economy and eventually an economic disaster. The same things are happening today. Man should learn from his past mistakes and not repeat them. In an economy, Income tax along with any of the other intrusive taxes mentioned before and corruption are like the clutch and brake in a vehicle. If the clutch and brakes are not released the vehicle will not move forward. Even with the clutch and brakes not released this vehicle called India has moved forward especially since the mid 1990's. Just imagine what kind of power and speed this country will unleash when the clutch and brakes are fully released. The ideas in this book when implemented will do exactly that.

In order to make people's lives easier, abolish all
intrusive taxes ie, income, excise, sales, octroi, VAT or any new taxes that the Politicians can think of next. All of these intrusive taxes can be replaced with a simple 20% Tax on all products and services sold to the final consumer. This would be the easiest way but it would not be fair to the poor people. A better way is explained below.