Thanks to Anna and Baba
Many wealthy persons in India have stashed away their money abroad to avoid taxes. That's the reason why Baba Ramdev had staged a protest. The central issue raised by the Baba was black money overseas. But the way he was evicted has given birth to new issue and that is why one has no right to protest in a democracy?
Money generated by income that has either not been taxed or through criminal means is called black money. It is become a habit for many wealthy people in India to siphon their money abroad and they hardly suffer from any sense of guilt. These people with foreign account say that taxes like income tax, wealth tax, building tax etc are unrealistically high. They could be right. An Economist has pointed out: "Necessary taxation is not theft. But there are margins at which taxation becomes difficult to distinguish from theft."
The best thing for the government to do is to charge lower taxes and allow people to enjoy the fruits of their labour.
Now those who have sent out money only to carry out their legitimate business should not be confused with criminals who have siphoned out money. It is the latter that the government needs to target the corrupt politician, the bribe-seeking bureaucrat, the drugs dealer, etc.
But Indian laws are much more relaxed now. More people are paying taxes and smuggling of goods has fallen to negligible levels. This being the case, there is no reason for even businessmen to evade tax and siphon out their money to overseas tax havens.
However, no one likes to pay taxes. So with an easier tax regime there must be stronger enforcement. In the US, for instance, few take the risk of dodging taxes because the penalty is prohibitively high. The strongest enforcement should be directed against of course the criminal elements, and also against corrupt politicians and bureaucrats. This is because unless the hidden cost in the economy resulting from the need to pay bribes - is removed, it would be extremely difficult to root out black money.
Thus the battle against black money is a noble one. India should reach international pacts with countries like Switzerland, Mauritius Cayman Islands and the Isle of Man to keep a close tab on money being illegally routed there. And at home there should be proper financial intelligence to minimize tax evasion. There must also be a more effective anti-corruption law and a Lokpal that has teeth.
Both Anna and Baba have done a great job. Thanks to them!
Many wealthy persons in India have stashed away their money abroad to avoid taxes. That's the reason why Baba Ramdev had staged a protest. The central issue raised by the Baba was black money overseas. But the way he was evicted has given birth to new issue and that is why one has no right to protest in a democracy?
Money generated by income that has either not been taxed or through criminal means is called black money. It is become a habit for many wealthy people in India to siphon their money abroad and they hardly suffer from any sense of guilt. These people with foreign account say that taxes like income tax, wealth tax, building tax etc are unrealistically high. They could be right. An Economist has pointed out: "Necessary taxation is not theft. But there are margins at which taxation becomes difficult to distinguish from theft."
The best thing for the government to do is to charge lower taxes and allow people to enjoy the fruits of their labour.
Now those who have sent out money only to carry out their legitimate business should not be confused with criminals who have siphoned out money. It is the latter that the government needs to target the corrupt politician, the bribe-seeking bureaucrat, the drugs dealer, etc.
But Indian laws are much more relaxed now. More people are paying taxes and smuggling of goods has fallen to negligible levels. This being the case, there is no reason for even businessmen to evade tax and siphon out their money to overseas tax havens.
However, no one likes to pay taxes. So with an easier tax regime there must be stronger enforcement. In the US, for instance, few take the risk of dodging taxes because the penalty is prohibitively high. The strongest enforcement should be directed against of course the criminal elements, and also against corrupt politicians and bureaucrats. This is because unless the hidden cost in the economy resulting from the need to pay bribes - is removed, it would be extremely difficult to root out black money.
Thus the battle against black money is a noble one. India should reach international pacts with countries like Switzerland, Mauritius Cayman Islands and the Isle of Man to keep a close tab on money being illegally routed there. And at home there should be proper financial intelligence to minimize tax evasion. There must also be a more effective anti-corruption law and a Lokpal that has teeth.
Both Anna and Baba have done a great job. Thanks to them!
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