Taxes are legalised extortion.

Everyone in the world hates paying taxes. Rich people buy politicians through campaign contributions, hire lobbyists to ensure plenty of loopholes in tax laws and then hire armies of accountants to take advantage of these loopholes. The poor do not pay any tax because their income is too little to be taxable. Only the middle class, especially salaried ones, earn enough to be taxable but not enough to hire top accountants. In India only 35 million people file tax returns and over 80% show income less than Rs 500,000 per year. Rural income is completely tax free so large numbers of politicians have taken up farming to hide their black money. However, the government is hungry for money, partly to spend on the armed forces, infrastructure and diplomats but mainly to fund foreign junkets for politicians, salaries for a vast army of corrupt civil servants and for useless social schemes to bribe voters. Since so few people pay income tax money is raised through very high indirect taxes such as sales tax, customs and excise and services taxes. Trouble is that they raise the cost of goods and services and depress demand, thereby reducing growth and hurt poor people. That is why the new proposal by the BJP to do away with all direct and indirect taxes in favor of a banking transaction tax is very exciting.  This will tax every bank transaction at a rate of 1% and will apparently raise Rs 15 trillion. Since there will be no tax there will be no need for black money. The Reserve Bank will be able to control money supply and get a grip on inflation. Property prices will fall to realistic levels. Trillions of rupees stashed abroad in tax havens will return, making the rupee stronger which will reduce prices of imports, especially oil, and bring down inflation. With a stable rupee and low inflation people will have no need to buy gold and that will reduce the strain on the Current Account. With no indirect taxes prices of goods and services will fall, encouraging consumer spending, which will lead to more investment, higher employment and wealth creation. Daily wage earners are paid in cash and spend it on daily needs so they will not be affected. There will be opposition to such proposals as vested interests will find all sorts of reasons to criticise. This can only happen if the BJP wins elections in April. Let us pray they do.