Cut excise duties on cars – It would be a great employment generator.
Cut Tax Rates, Tax Collections will rise? Laffer, the famous economist dude said so.
Do not raise taxes on essential commodities; we are already overburdened with an increase in Oil prices.
Blah blah blaaah and some more blah.
I am a simple man with a very simple wish.
Well I think it is not as crazy an idea as it sounds at first. This could actually be a Win-Win situation. Unlike my date with Aishwarya, I might add. :-)
What if we replace Income tax on salaries with a “Salary Distribution Tax”?
The way it would work would be by shifting the burden of paying the tax entirely on to the Employer in the form of a tax on the wage payout. Say a 10% Tax on the total wage bill of the employer.
The idea is to make the whole process simpler for the employee while ensuring the exchequer does not lose out.
For the employee the immediate benefit is WYSIYG. His take home salary converges to the salary mentioned in the employment letter. (Of course the salary mentioned in the employment letter would now be more realistic, read a bit less than before.) No need to run to the CA to file tax returns. No medical bills to be “arranged” for, no rent receipts to be forged, no Form 16s to be obtained. The tax authorities do not have to deal with the mountains of returns that they do every year.
Moreover the employee feels deliriously happy under the mistaken belief that there is no tax to be paid at all.
Can the tax authorities do it? Sure they can. After all they have done the same with dividends, when all that the government did was to shift the burden on to the company in the form of a dividend distribution tax. The result of this distribution tax was lower dividend for the shareholders (to the extent of the tax). But who looks so deep?
With this one stroke of the bureaucratic pen the then BJP government convinced a large number of retail investors that dividends distributed by companies are tax-free. Retail investors “felt good” that they no longer had to pay a tax on dividends.
Why not make the salaried employees “feel good” in the same manner, this budget?