Taxation – Universal and Equitable

Creation of wealth, in all its forms, must be encouraged even as such wealth is comprehensively and equitably taxed.

“Tax rates should never be raised in some brackets without being raised in all brackets. – Bradley A. Smith

“Wealth (is) the lamp unfeelingly speeding light to every land dispelling darkness… Make money… there is no weapon sharper than it to sever the pride of your foes. (Wealth creation through ethical ways) yields righteous- ness and joy without causing harm.” – Thiruvalluvar

Kautilya too, in his Arthashastra, recognized wealth creation as a worthy human pursuit that should be encouraged. Ofcourse, this was to in turn increase the King’s revenue from taxes and trading, in addition to those received by the King from properties and businesses owned by him. The tributes he would be receiving from his vassal kings also, contributed to his wealth.

In those days, even as the main objective for a King was to strengthen his control over his kingdom and increase his revenues, it was also, recognized that this could best be done if he took care to see to the spread of prosperity all across his citizenry, not only amongst the feudal lords.

The merchants, traders and money lenders were encouraged to support the many others involved in Agriculture and Animal husbandry from the vagaries of the monsoons and also, those Artisans, Weavers and Craftsmen to make even more and better products that not only the wealthy in the Kingdom coveted but even the wealthy elsewhere. Such trade brought much gold and silver into the Indian kingdoms and of course taxation thereon added to the King’s revenues.

The Senators of the ancient Roman empire often complained about the way the demand for Indian spices, textiles and artifacts was draining the Roman treasury of its gold and silver.

However, today, in a Democracy such as we espouse, with the concept that the Public is the King, we need to see taxation as being an inescapable necessity to be equitably collected from all, at as low levels as practicable, in the manner as the Honey Bee collects the nectar from each flower whilst also, enabling the furthering of pollination of the plants. Not via ‘Suspect, Inspect, Harass & Confiscate’ Regulations but with a ‘Trust but Verify, attitude.

The greed or inventiveness of the tax collector have given us many examples of very peculiar taxes they have come up with in the past. (Some of which are given in the Annexure – II below). Knowledge of such taxes may offer us an indication of what our future taxes might be like unless such trends are strictly controlled. Remember that some sort of justification was claimed as existing for all such taxes even though they may seem laughable today.

Also, the Government today should seek Tax revenue not only from hard earned wages and profits but also, from long-term capital gains, unearned rents and uncompensated harm (Pollution Tax etc.), by applying appropriate G.S.T. there on, say at 5/6 percent.

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