India and the Goods and Services Tax (GST)
India is preparing to adopt a GST that will eliminate a number of taxes which a large majority of economists and politicians believe are hampering India’s growth. Here is what Palkesh Asawa, a London based indirect tax expert, wrote in an article that explained why the GST will be great for India.
Apart from full allowance of credit, there are several other advantages of introducing a GST in India:
- Possible reduction in prices: Due to full and seamless credit, manufacturers or traders do not have to include taxes as a part of their cost of production, which is a very big reason to say that we can see a reduction in prices. However, if the government seeks to introduce GST with a higher rate, this might be lost.
- Increase in Government Revenues: This might seem to be a little vague. However, even at the time of introduction of VAT, the public revenues actually went up instead of falling because many people resorted to paying taxes rather than evading the same. However, the government may wish to introduce GST at a Revenue Neutral Rate, in which case the revenues might not see a significant increase in the short run.
- Less compliance and procedural cost: Instead of maintaining big records, returns and reporting under various different statutes, all assessees will find comfortable under GST as the compliance cost will be reduced. It should be noted that the assessees are, nevertheless, required to keep record of CGST, SGST and IGST separately
India Tax Evasion
For years, India did not release income tax data. Most people felt that this was due to the fact that evasion was so widespread that the government feared the facts would make the people who pay feel outraged and stop paying if they could. They were right. The problem is much greater than in the U.S.
An article by Nissim Mannathukkaren points out some of the facts revealed. (Note, a crore means 10 million in Hindu, so 1 crore Rupees = 10 million Rupees which is equivalent to about 160,000 U.S. Dollars. One lakh is equivalent to 100,000 rupees or about $1,643.65 U.S. Dollars.)
- In the year 2012-13, there were 2.87 crore (28,700,000) individual income tax returns in 2012-13 (out of a population of 125 crores). 1.6 crores of these did not actually pay any tax, so, effectively, income taxpayers amounted to 1 percent! To give a comparative sense, Canada (of course, a G8 country), had the same number of tax returns filed 2.88 crore returns, but out of a population of 3.5 crores!
- India’s tax-GDP ratio has remained almost constant even after two and a half decades of spectacular growth and wealth creation in which the GDP increased at a 4.5 annual rate. In the mid-1990s, there were only 2 billionaires (measured in US dollars) with a combined worth of $3.2 billion. But in 2016, there were 111 billionaires with a net worth of $308 billion.
Conclusion
The U.S. evasion rates are soaring. More and more people are expressing their disapproval of the U.S. government by evading their income and Social Security taxes. The government of India has realized that there is no way to collect the revenues needed through the income tax. They realize that not only will government income increase by the imposition of the GST, but the citizens of India will believe that everyone is actually paying their fair share.
By instituting a rational tax system, India is going to immediately start reaping economic benefits and the welfare of all of its citizens will begin increasing. Wages will increase and people will have good work. This is what a common sense approach to taxes can do.
In the U.S., we laugh when Jimmy Kimmel says, "Tomorrow is the day to mail in your tax returns, which means tonight is the night to start making fake receipts."
Evasion of the U.S. income/payroll tax system is not as extensive as in India but is rapidly heading toward a complete breakdown.
We will either see real reform, like the FAIRtax, or more and more of these types of jokes will not be considered jokes but the way that people really feel. That should be a frightening thought for all of the D.C. elites and for all of us who believe in the rule of law.
We don’t want to live in a country where the following is not seen as a joke but just a statement of fact.
The chief doctor was doing his hospital rounds and turned the corner and saw two of his staff doctors in a fight. The chief doctor pushed between the fighting doctors and demanded to know what was happening.
One of the doctors said, “It’s about the IRS agent in Room 2009. He’s only got two days to live.”
The chief doctor asked what was the fight about?
“We were fighting over who gets to tell him,” responded one of the doctors.
1040 Club and Your Donations (Investments)
When you make a donation to Americans For Fair Taxation “(AFFT”), you are making an investment. You could be investing the money in something else. All of us want to see a return on our investment. We want to see the investment used wisely and that the organization provides what it promises.
AFFT has been working for a long time to educate people about the FAIRtax. We are still running into people who have not heard about the FAIRtax, but what a difference it is from even five years ago. The biggest fear of the D.C. Elites is if the American people realize that they have been “had” and demand common sense reform like the FAIRtax. The Elites know that their “friends” in Congress will desert them if threatened with being thrown out of office.
There is going to be some sort of change in the income tax code in 2017. If AFFT is not demanding, on behalf of you, that Congress not just make a few changes but make real reform, then there will be more of the same and America will continue to lose jobs and more of our children will be living with us because they cannot find jobs.
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments) these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital in 2017.
Please go to this link to invest in AFFT and in your and your family’s future.
New FAIRtax Book
In last week’s FAIRtax Friday, Ron Maiellaro explained how America’s Big Solution was written and why it is an essential tool to help others understand the FAIRtax. Do you know someone who would like to learn more about the FAIRtax in a format longer than 140 characters at a time? Maybe something like a booklet that presents the basics of the FAIRtax? Well, America’s Big Solution is here! America’s Big Solution is a booklet written by Ocala volunteer Terry Tibbetts and can be purchased as an e-book for the Amazon Kindle, the Barnes & Noble Nook and Apple mobile devices thru the iBook store. And if you prefer a good old fashioned print copy, that’s also available at the above Amazon site.
We all know someone who would prefer a brief introduction to the FAIRtax and are not very active on social media. These potential supporters may be interested in this booklet which is less than 30 pages long.
In order to help the FAIRtax become the law of the land, we need to reach out to everyone possible. This booklet will hopefully reach another important segment of our society. Please do what you can to promote it.
AFFT National LOGO Store
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When visiting the Store, don’t forget to order a supply of FAIRtax Palm Cards. Besides handing out palm cards at meetings and events, whenever you send mail through the post office, consider including at least one FAIRtax informational palm card in the envelope - keep spreading the word.
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FAIRtax Power Radio
FAIRtax Power Radio is the brainchild of Bob Paxton, a Florida volunteer with previous radio experience and someone who is devoted to getting the FAIRtax passed into law as soon as possible. He invited Ron Maiellaro, another Florida volunteer, to join him. Together they are “The FAIRtax Guys” and they have created a series of podcasts that not only introduce the listeners to the FAIRtax but also discuss the many different aspects of the FAIRtax as it relates to the economy, our Constitutional rights, politics, business and anything else that comes to mind. After all, the FAIRtax will affect and be affected by every aspect of American life.
FAIRtax Power Radio has been around for almost two years, but a few months ago, we had a new beginning. We moved our main distribution platform to Spreaker where you can listen to and download our 30 minute podcasts for free.
Last April, when we moved to Spreaker, we decided to start from scratch and reintroduce the FAIRtax from the beginning to our listeners. In the first few episodes, you will hear details of the immense problems with the current income tax system and why it cannot be fixed. In fact, it’s so serious that even Thomas Jefferson gets involved in the discussion in episode 3. Then you’ll hear the most important aspects of the FAIRtax explained by Bob “Paxworthy” using his “You Might Be A FAIRtax Fan!” routine. We have interviews with various people such as a local business man, a Congressman and a member of the Board of Directors of Americans For Fair Taxation. We have examples of some of the wackiest tax deductions allowed by the IRS and the tax courts. We have analyzed the proposed tax reforms that the House Ways & Means Committee titled “A Better Way” and explained why it’s not “the best way.” In episode 18, Thomas Jefferson returns five years after his first visit however this time, the FAIRtax is the law of the land. A new episode is posted every Friday morning but you can tune in at anytime that is convenient to you.
If you’re an iTunes user, you can find FAIRtax Power Radio in the podcasts section of the iTunes store. Again, it is free and you can listen and/or download the podcasts at any time.
Both Spreaker and iTunes are available for your smartphones using the free apps. We are also working to get FTPR on other platforms such as iHeart Radio and TuneIn; more on those efforts at a later date.
Since our move to Spreaker and iTunes, we have increased our listenership but we need more, many more people to listen to FAIRtax Power Radio if we are going to force Congress to adopt the only REAL tax reform in front of them. YOU can help to inform the American people by not only listening to FTPR but also by sharing this information and these links with everyone in your contact list.
As The FAIRtax Guys say in every episode, When You Understand It, You’ll Demand It!
Thank You For Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure that AFFT is paid ever larger amounts from people paying for us to send their offers to our supporters.
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Thank you for staying FAIRtax strong!
