Each and every tax that the government imposes, gets collected, in the very end, from a person's profits. So, why not scrap all the taxes and levy just a single one, to be directly collected, once a year, from the end profits of the person?
(Guys, I'm NOT trying to be sarcastic or funny here. I got this idea sometime back and am asking you this question earnestly.)
3 comments:
assuming you are talking about indirect tax - this is consumption dependent. A govt. cannot physically monitor individual consumption patterns - hence it ensures taxes from supply side which eventually get passed on to the end consumer.
Direct tax on income makes sense anyway.
@ Navin
Hmmm... I agree. I had come to the same conclusion. But, I am wondering that if there was an easy way to monitor all financial transactions, would this idea make sense?
May be making all the transactions above say Rs. 2,000 (or may be Rs. 10,000) strictly through credit card or cheque will be helpful in this. Simultaneously the government should scrap all the denominations above Rs. 20 (or may be Rs. 100). People should be motivated and directed to use more and more Credit Cards / Debit Cards or even Cheque(which is not so feasible!). This will force the people to bring all the hidden cash out and also will prevent the bulk transactions in cash. Both the above, when combined will help in restricting the flow of black money to the minimum.
The same will wipe out the underworld and the terrorist activities taking in to consideration the fact that they are backed by black money. Imposing a tax on each credit, or credits above a certain limit will be good enough to replace all the direct and indirect taxes.
The entire thing sounds good to the ears... But the implementation of the same will be tough… tougher… toughest…
NoeL
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