Lower Income Taxes

Friends,

Currently it is widely known that only 4% of the population files income tax returns. Further only a few of these actually pay taxes. Salaried people pay an exorbitant 33%+ for decidedly poor public services (bad roads, schools and hospitals). The reason is that it is easy for tax dodgers to get away. The best thing would be to reduce the tax rate so that it is not worth it to dodge the taxman.

This can be solved by just changing the tax slabs.The basic economics theory of supply and demand will ensure a pickup in tax collections. The graph below shows this in more detail.

screen-shot-2016-11-16-at-10-51-04-am

Just going to a 15-20% tax rate cold increase the base by 10 times. So the new tax structure would look like:

Income tax slab (in ₹) Tax
0 to 5,00,000 No tax
5,00,001 to 25,00,000 10%
25,00,001 to 100,00,000 20%
Above 100,00,000 30%

Cheers!

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