Tax Terrorism | How Middle Class is Getting Chocked between Rich & Poor?

Summary

In this video, the speaker discusses the rising concerns surrounding India's budget and tax policies. He emphasizes the financial strain on the middle class, who bear the brunt of rising taxes, including GST on various goods, and stagnant salary growth despite corporate tax cuts. The speaker also highlights the discrepancy in tax contributions, with the middle class paying more than corporations. He critiques the government’s priorities, such as underfunded healthcare, inflation in essential sectors, and the outflow of wealth due to tax evasion by the wealthy. Ultimately, the speaker calls for a reformed tax system, better support for the middle class, and economic policies that favor sustainable growth.

Takeaways

• 😀 Rising concerns among the middle class about the upcoming budget and tax policies.
• 😀 Recent changes in GST rules lead to higher taxes on common items, including used cars, popcorn, and notebooks.
• 😀 Corporate tax cuts in 2019 aimed to prevent companies from leaving India, but have not led to significant salary increases for employees.
• 😀 Middle-class taxpayers contribute more income tax (₹11,56,000 crore) than corporations (₹10,48,000 crore) despite corporate tax reductions.
• 😀 Only 1.6% of India's population pays income tax, compared to higher rates in countries like the USA (40%).
• 😀 High-income earners (above ₹15 lakh) pay 30% income tax, which starts much earlier than in countries like China or Russia.
• 😀 Despite corporate tax cuts, wage growth in various sectors, such as retail and IT, remains stagnant or very low.
• 😀 Inflation in essential sectors like education and healthcare is significantly higher than in general goods, burdening the middle class.
• 😀 The cost of healthcare has escalated to the point where people are selling land to afford treatment.
• 😀 The government's responsibility to provide clean air, water, and basic amenities is being neglected, but taxes continue to rise for the middle class.
• 😀 There is growing frustration in the middle class, which is facing stagnant salaries, rising inflation, and a lack of government support for their basic needs.

Q & A

What is the central concern of the video regarding India's tax system?

The central concern raised in the video is the burden on the middle class due to high taxes, specifically income tax and GST, while corporate taxes are being reduced. The video highlights the unfair distribution of tax responsibilities and the struggles faced by the middle class.

How has the government attempted to support corporate businesses with taxes?

In 2019, the Indian government reduced corporate taxes to prevent companies from shifting their bases to countries with lower tax rates, like Singapore and the UAE. The government hoped this reduction would encourage businesses to stay in India and lead to higher salaries for employees.

Has reducing corporate tax led to higher salaries for workers?

No, despite the reduction in corporate taxes, the video suggests that salaries have not increased significantly. For example, the average salary in sectors like retail and IT has shown minimal growth, which has not kept pace with inflation.

What is the disparity in tax contributions between middle-class individuals and corporations?

Middle-class individuals pay a significantly higher amount in income taxes compared to corporations. In 2022-2023, middle-class taxpayers contributed INR 1,156 billion, while corporations paid only INR 483 billion in taxes, even though the middle class represents a smaller portion of the population.

How does India's income tax structure compare with that of countries like the US or China?

In India, income tax starts at 30% for those earning above INR 15 lakhs, while in countries like the US and China, this tax rate doesn't begin at such a low threshold. Additionally, India has a smaller percentage of the population paying income tax compared to these countries.

What is the argument regarding inflation and its impact on middle-class families?

The video argues that inflation, especially in sectors like healthcare and education, is not properly accounted for in government statistics. As prices increase, middle-class families are under more financial stress, which is worsened by stagnating wages and higher taxes.

What are some examples of the rising costs faced by the middle class in India?

Examples include the increasing costs of healthcare, such as kidney stone operations, and education, with rising tuition and school fees. Additionally, basic living expenses like housing, utilities, and food have also become more expensive.

How does the government's spending and policy impact the country's GDP growth?

The government’s limited spending, especially during election periods, contributes to low GDP growth. The video mentions that the GDP growth for the latest quarter was only 5.4%, a decrease from the previous quarter’s 6.7%, and this is partly due to reduced government spending on new projects.

What solution does the video propose to address the economic challenges in India?

The video suggests that the solution lies in increasing the income of the middle class through better-paying jobs, rather than relying on tax cuts. It emphasizes the need for businesses, especially MSMEs, to thrive and for the government to ensure that the country’s wealth remains within India.

What issues are raised regarding the safety and quality of public services in India?

The video raises concerns about the poor state of government hospitals, the safety of women in public spaces, and the high levels of air pollution in cities like Delhi. These issues are exacerbated by the government’s failure to improve public infrastructure while continuing to collect taxes.