The problem with not paying tax as a form of protest
2008 December 14
There has been a lot of discussion about not paying taxes as a form of protest in India, post the Mumbai attacks. Some petitions are saying the petitioners will withold tax payments til the country has better security. This argument, while appealing at first glance, is troubling. Because Indians don’t pay much in terms of income tax. We in the middle class, in whichever country we are, often feel we are bearing the brunt of taxation. However, most tax revenue in India comes not from income tax, but from indirect taxes, and some economists argue that the burden of these falls disproportionately on the poor.
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I think they are two separate points
- Let’s agree that indirect taxes is the bulk of the taxes. Yes, that is regressive for sure and puts a higher burden on the poorer sections who pay taxes on the necessities.
- If that is indeed true, the proposal from the middle and upper classes to pay their income tax into a “fund” should
a. have little impact on how the government functions because the collections via income tax are not significant and
b. still make a statement
I am not sure who the first point is tied to the second point? The people proposing paying taxes into a fund are using one of the only levers they think they have… that is unconnected to the % of income tax and the overall tax structure in India…
Shripriya, I take your point, but I still think, we the middle classes think that our taxes DO make a difference, at least that is the impression I get from all the discussion about it and that is why they are withdrawing them-in the expectation of better service.
One of the reasons I am somewhat uncomfortable with the idea is, that it’s the rich and middle class seceding again, in another way from the “system” and I am not sure that is the way to solve our problems…I am just thinking aloud.
Yes, you’re right – we do think it is going to hurt the government and that’s why it is being proposed. If everyone thought it was piddly, who’d care.
I don’t see it so much as a way of seceding and seeking an alternative route that the poor can’t have. I see it as using a lever that only the middle class has to get people to do something for everyone (rich, middle, poor). If the proposal was just “protect us” and forget the others, then yes, it is a way around the system.
Anyway – as excited as I was by it in that moment of angst, I don’t think it will really work. When push comes to shove, everyone will just pay their taxes like good boys and girls.
After all that talk about protests every single week, was there anything after the first week? Not that I heard of… and this is why we (all Indians) deserve the people we’ve voted in.