On Advani's Diversionary Tactic

LK Advani has just fired his first salvo in the run up to the elections – and it leaves me unimpressed. Advani’s bug-bear seems to be the secret hoards of rich Indians in tax havens abroad. If he is elected to power, he will get these hoards back and fund all the roads, schools, etc. that he and his party wish to provide for the Indian people via our The State.

It is almost as if the rest of us do not pay enough taxes to fund these roads, schools and whatever.

What happens to this tax money – the cess on petrol and diesel which is supposed to go into the Central Road Fund, the education cess, income and corporate taxes, service tax, VAT etc.?

Advani, as the leader of the opposition, is supposed to keep an eye on how the government uses our tax money. This money is being misspent on the NREGS, the army occupation of Kashmir and Manipur, the loss-making PSUs, the bloated salaries of the misproductive bureaucratic class etc. These are matters that the two major political parties should debate. Advani is diverting attention to tax havens abroad, by pointing to the fish that got away. What about the fish that are already in the net? What is the government doing with all the tax revenue that it has already collected?

In either case, a good country and a good economy are one in which The State does not command a major proportion of the citizens’ assets. These citizens pay a small portion of their assets to The State as taxes, and in exchange receive from The State some public goods and services. The rest of the money is kept by these people to invest in businesses. This is what creates jobs. If The State commandeered all the citizens’ productive resources, all this money would be wasted. The citizens would have nothing left over to invest. And The State would consume this money, not invest it.

If I had to pen my manifesto, then I would declare my intention to make India completely tax free for 10 years. During this time, a small government would be supported through the receipts of total privatization of all PSUs. This money would also be enough to finance a world class roads and highways network, pan-India. There would be no import duties, no income and corporate taxes, and no indirect taxes either. All the people would be able to keep their money and invest in businesses. The economy would boom.

Deep down, Advani and Manmohan seem to have a secret pact to keep certain matters off the election debates. This explains the hoo-hah about hoards in tax havens abroad. The central idea behind Advani’s blustering is again totally socialist – soak the rich. The rich are the problem. We will take from the rich and give to the poor – the same old dreary song.

The nation will NOT be better off with more tax revenue. The nation will be better off if rich people can save their surpluses and invest them freely in businesses. This will create jobs. This will spur growth.

The government needs to downsize, sell off its assets, and provide basic public goods and services – like roads. It is a shame that there are only two expressways leading out of New Delhi, one a 4-km road to Noida, and the other a 25-km stretch to Gurgaon – and both are toll roads!

This amounts to double taxation.

The leader of the opposition should be shouting hoarse about this blatant double taxation. Shouting about Swiss accounts is just a diversion. The real issues lie untouched.

And the real issue is this: We are already being taxed to the hilt – and double taxed as well. And we get NOTHING in exchange. Fix that, Mr. Politician. Don’t jabber about talking nonsense.