Why Middle Class in India is DYING? | Tax Burden | Dhruv Rathee

Summary

This video highlights the financial strain on India's middle class, emphasizing the high taxes they pay compared to their income. It contrasts the economic situation in India with that of wealthier countries like the US, pointing out the disproportionate cost of goods such as petrol and electronics. The speaker criticizes the government for favoring corporate interests over the well-being of ordinary citizens, leading to a shrinking middle class and a potential threat to democracy. The video calls for unity among the middle and lower classes to challenge the corporate-government alliance.

Takeaways

• 😀 High taxes are burdening India's middle class, with GST impacting everyday items like cinema tickets and snacks.
• 😀 Despite paying taxes similar to the UK, India’s middle class receives poor public services, such as poor roads and polluted air and water.
• 😀 The per capita income in India is far lower than in the U.S., but the income tax rate doesn’t differ significantly between the two countries.
• 😀 Petrol and diesel prices are higher in India than in the U.S., primarily due to excessive taxation by the Indian government.
• 😀 Many consumer goods, like TVs and smartphones, are more expensive in India due to higher taxes, such as import duties and GST.
• 😀 The middle class is increasingly disillusioned with the government, with support for BJP declining in the 2024 elections.
• 😀 Despite record corporate profits, the middle class is facing financial struggles, with inflation rising but salaries stagnant.
• 😀 The shrinking middle class poses a threat to democracy, as countries with a strong middle class tend to have more stable democracies.
• 😀 The government’s policies are seen to favor the rich and corporate interests, squeezing the middle class while benefiting the wealthy.
• 😀 There is a growing call for unity among the middle and lower classes to challenge the corporate-government nexus and reclaim economic power.
• 😀 The video urges viewers to prioritize economic issues over political distractions like religion and caste, to address the real struggles of the middle class.

Q & A

Why does the video suggest that the middle class in India is being overtaxed?

The video argues that the middle class in India is overtaxed because they bear the brunt of indirect taxes like GST on goods and services such as movie tickets, snacks, and daily necessities. These taxes impact their disposable income while the wealthier classes benefit from lower taxes on luxury goods and through methods like foreign trips.

How does the tax burden in India compare to the U.S. for petrol and diesel?

The tax burden on petrol and diesel in India is significantly higher than in the U.S. Despite the per capita income being much lower in India, the price of petrol and diesel in India is more expensive, mainly due to taxes, with more than 50% of the price being attributed to tax.

What role does corporate tax policy play in the economic situation described in the video?

Corporate tax policies, according to the video, are structured to benefit the rich and large corporations, which leads to an unequal distribution of resources. The middle class suffers from high taxes on basic goods, while corporations receive favorable policies that allow them to grow wealthier, worsening income inequality.

Why does the video mention the U.S. and India's comparison regarding consumer goods like TVs and smartphones?

The video highlights that consumer goods like TVs and smartphones are often cheaper in the U.S. than in India due to the high taxes in India, such as import duties and GST. For example, the iPhone is significantly more expensive in India than in the U.S. because of taxes that cumulatively can reach up to 40%.

What does the video suggest about the state of infrastructure and public services in India?

The video critiques the state of infrastructure and public services in India, noting that despite high taxes, basic services like clean rivers, roads, footpaths, food safety standards, and public transport are still lacking or inadequate in many parts of the country.

How does the video connect the struggles of the middle class to democratic stability?

The video references research by economist Robert J. Barro, suggesting that when the majority of national income is held by the middle class, countries are more likely to remain democratic. It argues that the shrinking middle class poses a threat to democracy, as it weakens the social fabric and the ability to challenge corporate influences on government.

What political consequences does the video mention regarding the middle class’s frustration in India?

The video points out that the frustration of the middle class, particularly regarding economic issues and high taxation, was reflected in the 2024 Lok Sabha elections, where their support for the ruling BJP declined by 3%. This dissatisfaction is attributed to the perception that the government favors the wealthy and neglects the middle class.

Why does the video mention the role of religion and caste in politics?

The video suggests that politicians often use religion and caste to distract the public from the economic issues that are most pressing, such as high taxes and rising inflation. This diversion tactics help to maintain their support among the masses while continuing to prioritize corporate interests.

What is the suggested solution to the issues faced by the middle class in the video?

The video advocates for political change where the middle class unites and votes against politicians who cater to corporate interests. The video encourages the middle class to recognize the economic struggles as the primary issue and vote for policies that can address these inequalities.

How does the video describe the economic impact of corporate-government alliances on the middle class?

The video portrays the corporate-government alliance as a system that primarily benefits large corporations and the wealthy. These groups receive favorable policies and lower tax burdens, while the middle class bears the weight of rising taxes, inflation, and stagnant wages, leading to financial stress and diminished economic power.