It is not possible to exhaust this discussion!
After Britain, France, Australia and United States, India too may soon be taxing the rich. In any case India has always tried to ape these countries without really weighing the pros and cons.
“The chairman of the prime minister’s economic advisory council, C. Rangarajan, seemed to be channeling Obama when he announced that “we need to raise more revenues and the people with larger incomes must be willing to contribute more.”
He did not identify the rate or income cut-off. Some of you may remember the Rs 24 per day limit set for non poor some time back. Now who would be considered rich – all persons earning Rs 25 a day (half a dollar) ?
One is inadvertently reminded of Morton’s Fork – a specious piece of reasoning in which contradictory arguments lead to the same unpleasant conclusion. It is said to originate with the collecting of taxes by John Morton, Archbishop of Canterbury in the late 15th century, who held that a man living modestly must be saving money and could therefore afford taxes, whereas if he was living extravagantly then he was obviously rich and could still afford them.
Be it Britain, France, Australia, US of A or even India, there is one simple solution to exhaust the discussion on exhausted funds of governments with inexhaustible expenditures – that is to tax the rich.
The unsolved dilemma before these governments is how to label their own tribe as poor.