Why RICH Indian farmers pay ZERO income tax | Abhi and Niyu

Summary

This video script explores the controversial topic of why agricultural income remains tax-exempt in India, despite the potential for wealthy farmers to contribute to the national revenue. It discusses the historical, legal, ethical, and political reasons behind this exemption, including the British colonial legacy and the Green Revolution's impact. The script also highlights the disproportionate tax burden on the middle class and suggests that the government should focus on identifying and taxing those wealthy farmers who exploit the system, emphasizing the need for a fair and accountable tax system.

Takeaways

• 😀 PM Modi is not expected to impose taxes on farmers, raising the question of fairness in tax distribution.
• 🤔 The script challenges the notion that high-earning farmers should be exempt from taxes, suggesting that even those with substantial incomes should contribute.
• 📊 It highlights the disparity in tax contribution, pointing out that only 2% of Indians pay income tax, compared to a much higher percentage in developed countries.
• 💼 The middle class bears a disproportionate amount of the tax burden, while other segments of society, like farmers, are largely exempt.
• 📈 The script suggests that expanding the tax base by including agricultural income could alleviate the burden on the middle class.
• 🏛 The constitutional and legal framework in India makes it difficult to impose taxes on agricultural income, as agriculture is primarily a state subject.
• 🌾 Historically, agricultural income was made tax-free to encourage farming and ensure food security, especially after the Green Revolution.
• 🚫 Politically, taxing agricultural income could be seen as risky and potentially unpopular, affecting the livelihoods of a large portion of the population.
• 💡 The script proposes indirect methods of taxing farmers, such as taxing non-agricultural income at a higher rate if agricultural income is declared.
• 💼 It criticizes loopholes that allow the wealthy to avoid taxes through various means, including educational institutions and shell companies.
• 🔍 The conclusion emphasizes the need for a fairer tax system that targets those with high agricultural incomes rather than the average farmer.

Q & A

Why does the script suggest that PM Modi will not impose tax on farmers?

The script implies that PM Modi may not impose tax on farmers due to a variety of reasons, including political, ethical, and historical considerations, as well as the potential backlash from the farming community.

What is the argument made in the script about the tax burden on the middle class in India?

The script argues that the middle class in India bears a disproportionate tax burden, as only 2% of the population pays income tax, compared to a much higher percentage in developed countries. This places undue pressure on the middle class.

Why does the script suggest that taxing agricultural income could be seen as discriminatory?

The script suggests that by exempting agricultural income from taxes, there is an indirect discrimination against other professions, implying that some are more important than others, which is not the case.

What historical reasons are given in the script for why agricultural income is tax-free in India?

The script mentions that the British colonial rule heavily taxed farmers, leading to hardships. After independence, to support farmers and ensure food security, agricultural income was made tax-free.

How does the script describe the risk involved in agriculture and its implications for taxation?

The script describes agriculture as a highly risky venture due to factors like climate change, which can lead to unpredictable outcomes. Taxing such an unpredictable income may be seen as unethical.

What is the script's perspective on the political feasibility of taxing agricultural income?

The script suggests that taxing agricultural income would be political suicide due to the strong connection between political parties and farmers, and the potential for public backlash.

What alternative methods does the script suggest for indirectly taxing farmers?

The script suggests that by adding agricultural income to other sources of income, a person may fall into a higher tax bracket, thus indirectly taxing their agricultural income.

How does the script address the issue of tax evasion through agricultural income?

The script acknowledges that there are loopholes and ways to avoid tax, including underreporting agricultural income or dealing in cash, making it difficult to track.

What does the script recommend as a fair approach to taxation in India?

The script recommends identifying and taxing those who are wealthy and hiding their black money through agricultural income, rather than burdening the average farmer.

What is the script's view on the government's responsibility in managing tax revenue?

The script emphasizes that the government should spend tax money responsibly, on the right things, and respect taxpayers by being accountable for how the money is used.

How does the script conclude on the issue of taxing agricultural income?

The script concludes that while there is a logical argument for taxing agricultural income to broaden the tax base, the practical, ethical, and political challenges make it unlikely to happen in the near future.