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Four- and Five-Star Hotel Experience!
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The Economic & Moral
Case for Abolishing Income Tax
The income tax is often accepted as an inevitability of modern life, but for much of history, major economies functioned without it. Arguments for its abolition generally fall into three categories: Moral, Economic, and Practical.......
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From time to time many financial experts and economists have recommended doing away with income tax. Is income tax legal? Is income tax, which forms around 12 percent of government revenue, worth collecting with government expenses, such as a huge income tax department staff, salaries, pensions, office premises all over the country, and other expenses involved in enforcing collection of income tax?
India’s net direct tax collection (including income tax) reached around Rs19.58 lakh crore (approx. USD 235 billion) for the financial year 2023-24, a 17.7% increase over the previous year. For the fiscal year 2023-24, personal income tax collection in India accounted for approximately 30.2% of the total tax revenue. These are figures put out by the government.
If you look at countries around the world with no income, they are flourishing economies with good growth and revenue collection. In India you already have GST, collection through property registration, levies, and other taxes as revenue. But the problem here is twenty-five percent of the collection goes in payment of interest for the loans taken by the government; another twenty-five percent goes in paying salaries and pensions to a large number of government employees. The balance of fifty goes for development, and some goes into corruption and other unaccounted practices.
The experts advocating abolishing income tax say it will boost India's economy with taxes and revenue going up. More money will be spent on various things like buying stuff, property, travelling, etc. And if the government is still reluctant to do away with income tax, they can levy taxes on income over one crore. Doesn’t this sound sensible?
The Case for Abolishing Income Tax
The income tax is often accepted as an inevitability of modern life, but for much of history, major economies functioned without it. Arguments for its abolition generally fall into three categories: Moral, Economic, and Practical.
The Moral Argument: Liberty and Property Rights
The most philosophical
objection to income tax is rooted in the concepts of self-ownership and
property rights.
Taxation as Coercion: Opponents argue that if you own your labor, you should own the fruits of that labor. When the government takes a percentage of your income by force (under threat of imprisonment), it is effectively claiming partial ownership over your time and effort. If a tax rate is 30%, you are essentially working nearly four months of the year solely for the state, which some argue is a form of "partial involuntary servitude."
Privacy Violations: To enforce income tax, the government requires invasive access to the private financial lives of its citizens. The collection agency must know where you work, how much you earn, how you invest, and where you spend. This level of surveillance is often seen as a violation of the right to privacy and the right to be secure in one's papers and effects.
The Power to Destroy: As
Supreme Court Justice John Marshall famously noted, "The power to tax
involves the power to destroy." Income tax gives the government a
mechanism to target specific industries, classes of people, or political
enemies, thereby shifting the balance of power heavily toward the state.
The Economic Argument: Incentives and Efficiency
Economists who oppose income
tax argue that it punishes the very activities that drive prosperity: work,
savings, and investment.
Punishing Productivity: Income tax effectively places a penalty on work. The harder you work and the more value you create, the more you are penalized. Progressive tax rates (where rates rise with income) are particularly criticized for disincentivizing success and upward mobility.
Discouraging Savings and Investment: Income tax often involves "double taxation"—money is taxed when earned, and then taxed again when it generates interest or capital gains. This discourages saving and investing, which are capital accumulations necessary for funding new businesses, research, and infrastructure.
Distorted Decision Making: In an income tax regime, individuals and businesses often make financial decisions based on tax implications rather than economic merit. Capital flows into tax shelters or tax-favored industries rather than where it would be most productive, leading to a misallocation of resources.
Hidden Costs to Workers: Corporate income taxes are often passed down. While intended to tax "profits," the cost is frequently absorbed by workers in the form of lower wages and by consumers in the form of higher prices.
The Practical Argument: Complexity and Waste
Even those who do not object to taxation
on principle often argue that income tax is the most inefficient way to collect
revenue.
Compliance Costs (Deadweight Loss): The cost of complying with the tax code is astronomical. People around the world alone spend billions of hours and hundreds of billions of dollars annually just filing returns, hiring accountants, and navigating regulations. This is deadweight loss—time and money that produces nothing of value and could have been used for productive economic activity.
Lobbying and Cronyism: The complexity of the tax code allows politicians to carve out special loopholes, credits, and deductions for well-connected special interests. This breeds corruption and crony capitalism, where success depends on lobbying power rather than market value.
The "Underground" Economy: High income taxes incentivize tax evasion and the growth of black markets. By moving activity "off the books," the government loses revenue, and legal protections for workers in those sectors vanish.
Historical Context
It is worth noting that the
United States had no permanent income tax for the first 137 years of its
existence (1776–1913), a period that saw the greatest explosion of economic
growth and standard of living in human history. The federal government was funded
primarily through:
Tariffs: Taxes on imported
goods.
Excise Taxes: Taxes on
specific domestic goods (like whiskey or tobacco).
Land Sales: Revenue from the
sale of public lands.
Proposed Alternatives
If income tax were abolished, how would
the government be funded? Several alternatives are frequently proposed:
A. The FairTax (National Consumption Tax)
This proposal would replace all federal
income taxes (including corporate, capital gains, and payroll taxes) with a
single national retail sales tax.
Pros: It taxes consumption (taking resources out of the economy) rather than production (putting resources in). It eliminates the need for filing annual returns and dissolves the IRS.
Prebate: To address concerns about the poor, the plan includes a monthly "prebate" check to every household effectively covering the tax on basic necessities up to the poverty line.
B. The Land Value Tax (LVT)
Proposed by economists like Henry George,
this taxes the unimproved value of land.
Pros: It is impossible to evade (you
cannot hide land overseas). It encourages efficient land use and discourages
speculative land hoarding. It does not penalize production or improvements to
the land (like buildings).
C. The Flat Tax
While still an income tax, this model
simplifies the code to a single rate with no deductions (e.g., everyone pays
15% of income above a certain threshold).
Pros: It eliminates the complexity, loopholes, and high compliance costs of the current system, though it retains the invasive nature of income reporting.
Conclusion
The argument for abolishing income tax is
not just about keeping more money; it is about fundamentally realigning the
relationship between the citizen and the state. Proponents envision a society
where privacy is restored, productivity is rewarded, and the massive machinery
of tax compliance is dismantled, unleashing a new era of economic innovation
and personal liberty.
The file above outlines the major arguments against income tax, ranging from moral concerns about property rights to economic concerns about efficiency. It also details the most common alternatives proposed by advocates of abolition.
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Four- and Five-Star Hotel Experience!
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| Leela Ambience Convention Hotel, Delhi |
While travelling over the years, we have been staying in top-grade hotels or three-star hotels. And it was always in my mind to experience four-star and five-star hotel stays, amenities, and cuisine. Many a time, I would go to a four- or five-star hotel either to attend a conference or seminar, attend a function, or meet a friend either from India or abroad.
After many decades, we planned to experience a four- and a five-star hotel. And got an opportunity this May. On our way back from Singapore, we landed in Delhi to attend a family function. We decided to stay in a five-star hotel for a change. We had booked the Leela Ambience Convention Hotel, Delhi. We enjoyed our stay and the five-star experience. It was different and quite pleasant.
A true five-star hotel isn't just about opulence—it's about delivering an experience where every detail aligns to create flawless excellence. Five-star hotels are properties that offer their guests the highest levels of luxury through personalized services, a vast range of amenities, and sophisticated accommodations. Though there is no standard rating system for hotels, properties earn 5-star distinction by providing guests experiences that meet or exceed even the highest of expectations for comfort, décor, and luxury. Five-star hotel employees are polite, attentive, and discreet and can anticipate guests’ needs. All in all, consistently flawless excellence is the expectation. Exceptional service is the cornerstone of any 5-star hotel.
Since we were in Delhi, we decided to visit Vrindavan and Mathura to see the temples and other attractions. We booked a tourist car for our round trip. On our return journey, we visited Agra. Here the Taj Mahal was on top of our list, as I had last seen it in the early seventies, and my spouse was very keen to see it. Also visited some other tourist attractions in Agra. Since we had a day to spare, we planned to visit all the tourist hotspots in Delhi. We covered all the major tourist attractions and had a sumptuous Maharni Thali at Gulati’s. By then it was late evening. And finally returned to our five-star hotel, and the next morning we had to check out.
Next, we had to attend a family function at Gurgaon, which was the main purpose of our visit to the north India. The next morning, we checked out of the Leela Ambience Convention Hotel, Delhi, and left for Gurgaon. Though early in the morning, we faced a few tariff jams on the way and finally reached Gurgaon.
Here we stayed close to our relative’s house in a four-star hotel, Fortune Select Global ITC, Gurgaon. The room was booked by them. So, we got an opportunity to enjoy the four-star experience. Explored the refined comfort of a 4-star hotel stay. With features, value, and how 4-star hotels balance luxury with affordability for modern travelers.
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| Fortune Select Global ITC, Gurgaon |
The primary distinction lies in the level of service and the quality of amenities offered. While 4-star hotels provide comfort and convenience, 5-star hotels focus on providing an indulgent and memorable stay. Understanding these differences helps travelers choose the right type of accommodation for their needs. Each hotel class caters to specific preferences and budgets.
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| Scenic beauty of Konkan |
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