Tax reductions are indeed on the way

The Government has decided to reduce the diesel and kerosene cess. But is it enough? Should not the taxes itself be cut by anywhere upto 2% considering that the general household and offices spends upto 10% of their income for travel? See http://ideas.repec.org/p/wbk/wbrwps/4395.html

The Government is so soft on critical issues that even countries like Indonesia, Malaysia and Sri Lanka decontrol petro products before India. But the same Government is so hard on its taxpayers that many days after the same Indonesia, Malaysia and Sri Lanka Governments decreases taxes on its citizens (which was not all that great to begin with), Indian Government has not even started thinking on those lines. Considering that more than 50% of what we pay for the petro products go to the State and Central Government coffers (about 20% and 30% respectively), why not give a hefty reduction in taxes? I am speaking "in addition" to the reduced Income Tax rates I mentioned earlier.

Now I answer my own question. The purpose of the fuel tax is to lower dependence on fossil fuels. When all countries are imposing these taxes, we cannot afford to NOT do it. That leaves just 1 option.  Cut our income taxes.

Does the Government want the common man (read it as taxpayer) to bleed to death? Is our Government worse than a leech? And why do I not see public comments on this burning issue? Are we so used to these Government excesses that we do not care?!!

Do any of our readers have any information about how the money generated because of the fuel taxes and cesses is being used? I will be grateful to include that statistic in this blog.

What else does the Government have to do?

Inspite of the public opinion, I believe the move to be a good one. But Deora's statement that his action is "saving the Oil Navaratnas" holds no water. He, a true Government Babu, thinks he is running the oil company whereas the fact is that it is your and my (read as taxpayer) money that they are using for the subsidies...

The general merchant and petty shop owner who do not pay any taxes are enjoying petro and diesel subsidies at our expense. But the Government keeps adding taxes and surcharges to the taxpayer's burden. It is the small-time traders of that non-tax-paying kind that are running a parallel economy. Should it not be those kind who ought to cough up for the subsidies?

I think the onus is on the Government to do 2 things now
(a) Reduce the IT taxpayer's burden by 1.5% to 2% or so (Consider that a negative surcharge!!)
(b) Stop floating some stupid schemes like so-and-so-religion gets a discounted price, so-and-so category gets a subsidised rate, so-and-so Government body gets fuel at subsidised rates. Believe me - with Babus, anything is possible!!

I presently stay in the United States. Here, no special privileges exist for anyone. But in India, we plan schemes for the poor and the plans fail miserably in achievement, but overshoots the budget always!! Where the money is gone - your guess is right.

Ask for a reduction in Income Tax rates. Let us remind the Government that the purpose of collection of Income Tax is not to just generate money but to get more and more people to file their tax returns!! Decontrol fuel, but reduce our taxes.

Start the fight now. Remember that there are no free lunches. Spread the message that WE ARE NOT FOR ANY KIND OF SUBSIDY TO ANYONE.