Abolish Income Taxes to boost Economic growth, Is it Possible?
If Dr. Subramanian Swamy is to believed, we can get higher growth by abolishing Income Taxes and corporate Taxes.
As per him as per an interview given to Rediff.com
"The most important thing to do today is to generate enthusiasm. No economy can improve if people feel defeated and become risk-averse. Therefore, we have to bring the positive feeling back by implementing measures that would revive the outlook. The other step that should be taken is increase the savings rate, help people save more, as this would translate into more investment which in turn would boost growth.
Both of these measures can be achieved by abolishing income and corporate taxes. The moment a government abolishes these taxes people will start feeling positive again because they would see that the government is actually doing something for them."
The suggestion by Dr. Swamy can work in positive manner, if income taxes are abolished people will not deposit money in Swiss banks or other tax heaven countries to escape Taxes.
And whole money will be in India, the same money can be invested in resources to boost economic growth in India.
However the main concern remains is How India will obtain funds if taxes are abolished?
Responding to this Dr. Swamy said, that by savings of People will increase and this will bring more revenues to governemnt, and other methods are by auctioning coal blocks, surplus sand, spectrum, oil fields. And also by imposing one percent taxes on every banking transactions.
Lets see what Dr. Swamy will do, incase BJP government comes to the power?