Why Should We Pay Income Tax?

Having to pay income tax makes me feel sick… really sick. It gives me a feeling that we are staying in a socialist economy. I can understand why we should pay property tax or why we should pay water tax or road tax (though I feel it is unjust to pay road tax as we also pay the toll… anyway). But income tax? what for? What service or facility am I using from the government for which my income is taxed, and that too heavily. Man!

The people who earn more are taxed more. This results in a sad situation for a person who is just above the taxing bracket. Because he ends up earning less than the person who earns just below the taxing bracket. Indirectly this means the person who is relatively poor is brought on the level terms or some times higher than the person who is relatively rich, or should I say relatively less poor? It gives me a feeling that it is a way to restore economic parity in the society. Does it not sound like a socialist ploy?

Another two idiotic taxes I hate are the VAT and the service tax. Last time I went to Pizzahut to have a pizza, I shelled out 25% more money than the list price. They bloody charged me both VAT and service tax. I was like, WTF man! The cost of the service Pizzahut provides is built in the price of their Pizza. And they are paying the stupid income tax on what they earn by selling Pizzas anyway. Then why tax the service? Is it not double taxation? And what about VAT?

Taxation is increasing the prices of commodities by as high as 30-40% in some cases. So we are shelling out more money to satisfy the same needs. I heard a debate on a news channel on rising inflation and no one talked about taxation. Dont you think taxation is contributing to the inflation as well?


13 thoughts on “Why Should We Pay Income Tax?

  1. I really have no idea where the frustration is coming from, Mayur. If taxes make you feel that you are living in a socialist economy, I must say that the Capitalist Economies ( also the developed ones ) would tax you significantly higher than us.

    Also your contention on one who is just above a tax bracket earning less than somebody who is below a tax bracket is technically incorrect. If you meant that as a dark humor then I will not comment on it though.

    Taxes in NO WAY should kill your initiative to earn more. The idea behind levying taxes is not to bring the poor on level terms with the Less poor as you call it.

    And by the way, by definition bridging the gap between the Rich and the Poor is one of the core economic development objective of any nation ( be in developing or developed ) and this should not be mistaken with ” To him as per his needs and from him as per his capacity ” Hope you get the difference.

    If your problem is with the FACT that despite paying taxes ( in many forms ) we still don’t get the quality of life that we deserve then it is understandable.

  2. I take that as an understated comment. Taxes are a source of earning for the government, I know. But the taxes like income tax ARE meant to restore some parity in the society.

    About capitalist economies, I think you did not understand my problem. Taxing income is a socialist approach. That is what I believe, no matter what economy it is.

    I’m a firm believer of ‘You pay for what you get’. And I think Service tax, VAT and IT are asinine.

    “If your problem is with the FACT that despite paying taxes ( in many forms ) we still don’t get the quality of life that we deserve then it is understandable.” — This is not correct. I’m against the very taxes, irrespective of what quality of life I live.

  3. Taxes are not a socialist economy staple. We pay taxes through our nose here in the US too, and US is as far from socialism as you can get! If you ask me, taxes are not to restore parity but a way to earn money and balance the government’s budget, how else will a government make money?

    If you won’t pay taxes, how will your roads, railways, airports etc get built?

    • The government can make money form various ways. Taxes is the easiest way to do it. I believe if we make the public utility services as ‘pay as you go’, we might save ourselves from an unnecessary burden. Tell me, what value has Pizza Hut added to the dough? But they still charge us the VAT. Surprisingly, they charge service tax even on the take aways. Isn’t that idiotic?

  4. I’m not sure how things work in India, but in Malaysia, you can claim tax rebates on certain things like books, insurance, pension contributions, a computer (once every 3 years), amongst other things.

    I’m alright with taxes, as long as everyone else who is relatively well off is doing it too. Since income taxes contribute the largest proportion of the government’s income (in most cases), we do hope for large expenditure into public goods that all of society can benefit from.

    Though I agree that if inflation is an issue, the government can use tax relief as one option.. or targeted subsidies as another.

    On the socialist note.. income taxation is still pretty much a capitalist thing, given Pareto efficiencies. Controlling inflation, allocation of resources, budget deficit, etc.

    • Taxing income becomes a capitalist thing because, as you said it yourself, it contributes the highest to government’s income. But while you say that, you must also note that the non-uniform taxation across the society gives it a socialist look. The people who earn more are taxed heavily. Why? From a capitalist angle, the more able are put in the hotter burner. The more you are taxed, the more you want to earn and the more the purse of the government swells.

      In my opinion, the more you earn, the more you want to evade 😛

  5. I am not 100% agree with Mayur. But one thing is sure ‘In India we are paying good percentage of our income as income tax and the percentage of services we get for paying this tax is ZERO’. Someone mentioned about railways, road, airports etc… Excuse me, good morning, look around, all you’ll see is toll roads, fly overs, highways, express ways etc. All airports are charging whopping fees as airport changes (look into the break up of your flight ticket). Railways is charging at par for all services. When did we have last used our postal services. When did you last visited a govt. hospital. Telephone connection, internet connection, all licenses, permits, permissions, registrations, passport, pan card, etc etc are adequately charged as legal fees (also considerable under the table). So practically we are just giving IT and getting nothing. On top of this everything we purchase from match box to flight ticket to LED TV are charged with excise duty and other state and union taxes / duties / charges etc. All services are taxed as VAT / Service Tax.

    A tax payer and non tax payer are alike. There is no privilege for a tax payer, then there should be a simple obvious question in mind, ‘Why i am paying tax?’ if i stole tax then i should have saved some more for my future which is any only my personal problem. There is no social security provided by govt. even if in my life span i have paid some Rs. 60 lakhs as IT and something like Rs. 75 lakhs as all taxes and duties. This is realistic estimate of paying around Rs. 2 lakhs annually as IT (gross pay of Rs 15 lpa +).

    We can be even partly satisfy if we see our tax collection is used to uplift under privileged. But this is also not happening.

    This govt. ideology of collecting charity in the name of IT from earning india and doing nothing is actually fueling a hidden explosion which may take up toll in future. We all may be part of this. At least we should raise a collective voice and ask govt. to justify their logic behind collecting IT.

  6. I am a beginner, in 2011 i would start paying taxes. What i cant understand is the fact that, I sweat is out to earn what i earn. Why should i be taxed by a corrupt government. I sell my talent to earn my bread.

    I look at it in a simple way. Government invest a lot of money on education, and now when all those educated citizens get a job gov wants a share of their success. WTF???

    Backward communities are relieved from taxes….why?? actually they get more benefit from gov than any other citizen does….

    Like Mayur said, what facility am i availing from the government that i am taxed.

    I really dont think i need to pay income tax. But the system forces me to.

  7. This is a hot question. What do we get by paying tax and on top of it, pay VAT and Service tax? As Mayur asked, what is the value that’s getting added in a Pizza? Is it the plate that it is being served at? HOLY CRAP. Every tax payer does generous charity by paying tax and on tax for tax. I think all the nonsense started with this PC guy.

  8. For contributing into this topic i would give you and example..
    if 3 people work together and 1 of them is the manager of the company/ organisation rest 2 of them need to pay some amount of money for cleaning/maintenance/ improvement and we give him/her our some mount of money daily. though the manager isn’t doing his/her job and keeping all the money in pocket. what would you do.??
    would you stop giving money or would you take some action against it.
    i would prefer taking some action against it instead of not giving money as we would need to maintain the place to live in for a better future.

    Same is happening in India specially. People i agree govt wouldn’t be working the way it should be. lets say 90% our corrupt but have you ever thought who made them corrupt.. its us !!
    if today each one of us pay full income tax and keep paying taxes when we buy things would help our nation only in developing. how will government manage to feed our army, poor people, government schools, salary to police, government hospitals, lawyers, garbage wala’s, people who clean roads, paint roads, signs, foot paths, help age homes, and etc…

    if you say police wala’s are corrupt.. who made them corrupt??? .. its we..!!
    we are caught while talking on phone and we bribe… first u need to take some step and stop bribing and let them do their duty. why do we throw garbage and etc on the roads?? i do agree not enough garbage’s around but it does not mean that our road is your garbage. a robbery happens and we blame police security, what if they are not their to protect us. will you be able to live without guards guarding us day and night.

    my point is still that we should still pay our tax… agreed it is heavy and a hell lot of percentage from our monthly income, but if we don’t it would affect us indirectly. if every living Indian pays full tax, it would effect our Indian economic rate and would effect in growth. the exchange rate could go low and you never know the rising expenses would decrease.

    we always point government is corrupt, i think we made them corrupt and its we who can change them. its our country what would we get fighting like this with each other. nothing!!

    we should help each other in developing our nation, keeping it clean, healthy, corruption free. for that nobody else needs to change its we.. ourselves who need to change and then can point towards someone else.

    i hope i made my point clear …. thanx.. :))

    • Hi Gauri,

      It’s easy to say pay 100% of tax but we know that our money is not utilized properly & misused by govt,

      Then why should we pay tax, better we not show our income & use our tax for personnel use after all it is our money,

      Why should we bother about nation if some people use our money.

      Hope you understand the same & not misguide the Indian people,

      If you want to pay your tax pay but not force to other, mind your business only,

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