Removing Income Tax is a Good Thing

I read the news that Donald Trump is thinking towards abolishing the income tax altogether. The income tax means you have to pay the tax from the income to the government. Higher the income, higher the tax. If I talk about India, we have different brackets of income tax, that means the more you earn the more you have to pay the tax. But again not everyone pays the tax, the rich is able to evade the tax from the loopholes.

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Now if we remove the income tax altogether and add the tax on the consumables then everyone will be equal. That is indirect taxes than the direct tax. In India we have indirect tax too, so eventually we have to pay double the tax. So if the income tax is removed then we have only the indirect tax that is Goods and Services Tax. If every item can be moved in the GST then everyone will be equal.

Here in India, we have only handful of people who pays teh tax which is around 1 to 3% of the total population. So even if we remove the income tax, not everyone will ne effected. But the good thing would be more money will be added to the economy as more disposable money will be with people. Taxes are paid mainly my middle class as the poorer people doesn't pay the tax and rich people avoid the tax via loopholes.

So if the income taxes are removed and if the indirect taxes are increased, everyone will be equal. The more item you will purchase the more tax you have to pay and it should not be linked to the money you are earning. It will also help people with more money so that they will spend more which is again good for the economy.

Posted Using INLEO