Need to review the taxation system in India and possibly elsewhere

I think everybody should pay for what they are receiving. So taxing even doctors is called for. But how much makes a difference. Agricultural produce taxation can be brought down by taxing entertainers some more. Likewise, not all administrators require to be paid at uniform slab. We have group of government personnel categorized as groups and their scales are predefined. But periodically, successive governments tend to increase their salaries as they can influence votes and voters. Effectively, they are taking salaries from the government and they also take bribes. We need to eliminate the places where they can park those bribes. For example cars. A car of say 500000 INR should not attract taxes other than what exist now. Anything more than that if the person spends ..slap taxes at a progressively increasing RATES, not amounts. Therefore, we would have remained democratic, but forced people to first save for their houses, their kids education, and their retirement savings. We have a businessman who has about 30 odd vintage cars. I bet he took loans for his business. Some of it got routed to his pocket legitimately as pay or dividends, which he used to buy those vintage cars. I feel spending on vintage cars or art work, does not benefit the country. In fact, it harms the country because it creates demand for monies increasing interest rate in the process. Therefore, students find education loans expensive and turn to other professions that are not really positive for the country like becoming sportsperson or singer or actor. Likewise, loans become expensive for manufacturers of goods, preventing them from achieving economies of scale by expanding. This leads to imports becoming cheaper, and local industries losing their market share regularly till they close down or are bought by foreign enterprise. How then are we really helping our country if we do not tax such a vintage car purchaser more? I am for slapping rather heavy taxes..500 percent or more on purchase of products such as vintage cars, art work, etc. That way, the person would either refrain, buy fewer, or work harder to achieve his desire. Same for spending a lot on homes. He built Antilla, which is office, residence, entertainment center, etc. All in one for a very large set of family. Recent security concerns have made him purchase another house in the UK. This house will obviously not have buyers. So it will remain a white elephant. If he has taken a home loan, or mortgaged it for loans, banks have had it, because they cannot sell it. Very few can afford it, and those who have such deep pockets know their advantage. Therefore, they would try to buy it at deep discount, forcing banks to absorb losses. We have had such cases before. So I am for taxing houses based on sizes and costs at progressive rates to prevent the monies of the country getting blocked in such investments that cannot bail it out in the hour of need. In fact, beyond a particular size and cost, banks should not be allowed to provide finance to such a person or his business. There has to be logic even to democracy.

There are many movies we wouldn't watch the second time. They lie in can after initial collection. The collection goes into the pockets of actors directors producers etc. Government hardly gets anything. If the benefit is not long term like education or housing, why shouldn't it be taxed more?

@vandana7 Price of Alto = 100 notes Price of Kia = 200 notes I have 300 notes. I go to buy a car. Earlier: I adjust my budget to spend 236 notes on a new car. Can still have my meal in remaining 64. Now: I have to spend all 300 notes for my preferred car, may even need to borrow extra 40. Obviously I cannot. So I buy another one with 118 notes. Or don't buy at all. Sounds like a nanny State to me - controlling my choices. For greater good? Yes, that is the catchphrase!

@hora_fugit I was thinking in terms of indirect taxation. So kinda...if you want a flat of 1500 sft. you pay 10000 as plan approval charges. If you want to build a flat of 3000 sft. the plan approval charges should not remain 100000. Nor should they be 30000. Instead they should be 300000 at least. For every 500 sft after that, slab should increase by 100000 till 5000 when again there should be massive jump. The reason is, such properties become difficult for banks to sell, because few earn enough for them. However, the person plans to build it our of ostentatious desire, taking home loan for it. When loan is taken ..the demand and supply theory comes into play. Think of a small entrepreneur paying interest at 16 percent per annum for his business, and think of a person spending on luxury like Mallya did. One is good for the nation, other is not. So what is not good for the nation needs to be expensive. If it is expensive then only demand will come down, and bankers will be forced to offer loans to small entrepreneurs for 12 percent per annum. Likewise, if a person buys Maruti alto, GST may be 18 percent. But if he is buying KIA or Audi ...you bet the GST should not be less than 75 percent. There is no restriction. No control. Just taking care of nation's interests first because we are not a rich nation as yet.

Nice to see you back Terrible Man. No...it is not like that. The basic exemption for them and us should be the same. Beyond that, incomes should be taxed at higher rates. Slab rates system that finance act has ... it should change. Pay more taxes is not same as paying more ratio of taxes. I earn 1000000 - I am an armed force person. I would pay about 1.25 lakhs. I earn 1000000 - I am an actor. I should pay 2.5 lakhs. That is what I am suggesting. As to goods, again... there is a logical and illogical part. If you buy a car like Maruti Alto, you may pay 18 percent tax. But if you buy an MG or Kia...you should be paying 50 or 70 percent tax because you can afford it.

Some of the provisions in tax laws enable very wealthy to avoid taxes. For example, here, we have rental incomes. On that we are allowed 30 percent for repairs and rent collections. But rental income is passive income! The person earning it is not contributing to domestic production. Therefore, that should be taxed slightly higher. Instead, we allow that 30 percent. LOL Then States... they ought to make rental agreement recording mandatory. For that, both the landlord and tenant need to pay nominal fees. This will expose the non-taxed incomes. Without such agreement record in the government record, along with up to date property tax payment evidence, there should be no legal rights for the landlord in the courts. You bet, 99 percent of people will rush to pay those nominal fees, and even Income tax. Right now, they pay nominal bribes to the inspector, if the inspector arrives.

We can now change that...and we are not changing. That is what is annoying.

@vandana7 I'm sorry it's annoying. I'm glad it's changing. I hope for the better.

Direct taxes will lead to evasion. Indirect taxes are called for. Like this size house, you pay only this much tax, for every 10000 more, you pay 3000 tax... which will be collected by the concerned department. You buy this size car with this capabilities, you pay this much tax, for higher models, for every 3000 more, you pay 900 tax. Effectively, we truly tax luxury. Likewise, slap taxes on clothing, yachts, etc. At times, make it annual ..so that person thinks twice before buying.