Keeping , all the fairy tales , and jokes aside, let’s dive into , what practical can consequences, it will have on our country, Tax is a key source of income, basically, from households and buissnesses , a part of wealth is gone to government in form of taxes , united Arab amirates , is one among these , it is highly rich in natural resources, like oil and it’s free trade ,Oman , Bahamas, Maldives are also some countries, where people live tax free , Bahamas and Maldives are popular tourist destinations , tourism brings plenty of money for their government, so they allow their residents to live tax free
Tax is one of the , major source of income of india , apart from tax , non tax revenue is the recurring income, major sources among this are , interest , dividends, fees penalties, and profit received from public sector companies , direct taxes ,covers 51.3% of total revenue in 2016-17 (source google) after the introduction of GST , indirect taxes covers almost 28.46% of revenue (source google) advantages of abolishing income tax – this will increase circulation of money, in the economy in large percentage, if tax rate is zero , people will likely to spend more than before, leading to increase more money supply , in the economy 2) individual , and buissness firms with get benefits of tax savings, also no extra charges to be paid , and no extra paperwork 3) Lending power of banks – it will increase, because Black money , money on which tax is not declared , can now freely be used , this will increase the deposits in banks , hence increasing their lending power
Disadvantages of 0 tax – indirect taxes are regressive in nature , we as common people , can see huge rise in prices, because the government will try , to generate, its revenue from indirect taxes , as a consequence, they will charge high taxes , on consumer goods 2) This will also increase, the income gap in our country , rich will , grow more rich, and poor people and middle class , will suffer in taxes increasing , country like India , which has high population, and the income gap between , rich and poor is huge , it is slightly tough to make its tax free
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