He likes to reflect on human transactions in many colors, each of them leading to a horde of imponderables, human or nonhuman.
Tax for a Good Future
Tax in fact is the most potent and convenient weapon of every government, and is rather rather ubiquitous for its power to land a feather touch, or the heaviest of blows, at the will and pleasure of those in the reckoning. It thus plays a very important role, especially in maintaining a healthy, progressive society. No wonder, it is present everywhere. But, are we deriving its benefits to the fullest extent? Why can’t we think of utilizing its potential to regulate or re-calibrate our approach to life and society in meeting the desired ends?
But, We Continue to Repeat the Past
You see, since long, we have been using differential taxation as a tool to modulate the disparity that is present in our society. All will agree, it is for a worthy cause, namely, making a society oriented towards the welfare of all. But, this cause is overshadowing all the significant signs that may have a say in this matter.
And We Continue to Reap the Same
For example, disparities have been on the rise, ever since the beginning of history. It remains as a perennial threat to welfare. While addressing the issue of welfare, we are overlooking the root cause that necessitate frequent attention to the issue. Which is nothing else, but the origin and rise of disparities. We however take imaginative steps to distribute the eyesore of a disparity, effectively hiding it from all. As a result, a glance, even from a random individual, will never fall on it, nor raise interesting questions to probe further.
And, such actions taken year after year succeed in repositioning and making the disparity unrecognizable, while distributing the resulting shortcomings or failures, mostly as fresh taxes, to those groups that happen to deserve the least of sympathy.
Consequently, over time, two groups emerged. A small group that is taxed heavily, but is made to feel at home with a thought that they are better off. A large group that is made up of people who are not taxed, or those taxed lightly, but is made to feel at home with a thought that things could be worse. So, effectively, there is nothing to remind the people on either sides of disparity that things could be better without the disparity, or that the disparity is something that needs to be addressed.
I feel we need to use our main weapon, taxation, a little more creatively, specifically to address the issue of disparity. Currently it only acts sometimes as a carrot, sometimes as a stick.
Make a True Incentive out of Income tax
Let us say we divide the year’s income into two broad categories.
One, income arising as a result of one’s efforts during the current year.
Two, that arising as a result of one’s past efforts and other things like returns from investments, interest, gift, inheritance, or windfalls, like those arising from changes in statutes and provisions.
In the first case, let us tax income at a rate that decreases as income goes up. This shall act as an encouragement for working hard. Moreover, people shall find it greatly rewarding to lead an active life, and utilize all the available time in a productive manner.
In the latter case, tax should be at a rate that progressively rise with income. This should be a good discouragement for amassing huge wealth, as more of it amounts to burdening oneself more. This shall promote consumption, which in turn shall create greater employment opportunities, with corresponding benefits to the society as a whole.
Changes Will Follow
Consequentially, the changes that can be expected are plenty, at least a few of which having the potential to restructure the society itself.
The first one could redefine the productivity values of capital and labour. Broadly, rent will go down and salaries will go up. Also, rather than a manager, a leader will be in demand.
Another one one could put an end to hoarding every kind. Since it will turn out to be counter-productive in itself, the natural course will be to vanish as a historic aberration. In parallel, knowledge or skill shall get positioned at the pinnacle of appeal. There shall be less need to govern, since people do not make themselves free enough to be led astray.
This in any case will put a final end to a favourite pastime of humans, namely, wasting time. The ills people have acquired over time, be stuck with something for ever, or be busy in gambling, womanizing or alcoholism, to name a few, being originating from the very act of wasting time, or a total lack of imagination, or both, shall also meet with its demise. The imaginative human will soar over, bringing in a golden era for the mankind.
The last one that could elicit the greatest welcome shall be the unprecedented peace and tranquility, every society will be boasting of.
In a few generations, while discussing the earth and its history, text books shall start talking about the violent middle ages that died soon after the twentieth century AD. When people violently celebrated even the delightful differences that manifested in every human competition, whether physical, ethnic, or religious, bringing an unfortunate end to many a golden era. When most people felt suffocated while some merriment flourished.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.