How can you cut when they are the only ones paying?

The slump in demand for motor vehicles and real estate is because manufacturers and builders are lobbying for a reduction in taxes, wrote R Jagannathan. "The case for a big-bang revival package, led by direct and indirect tax cuts, has never been stronger," he wrote. Incremental changes are making things worse as people stop spending as they wait for prices to drop. Earlier he had advocated a flat rate of 15% for both indirect and direct taxes. "The number 15 should be seared into tax codes, both direct and indirect, either as a current objective or a long-term one, to be achieved in stages." He disapproves of harassment of taxpayers by officials because of unrealistic targets set on them by the Finance Minister. "This is not the time for taxing anybody more or going hell for leather on tax compliance. This is time to leave more money in the pockets of all economic agents." There are two problems with this view. Firstly, elections are won by subsidies and Prime Minister Narendra Modi has massively added to the number of social schemes left by Congress. Since he won the election Modi has added handouts of Rs 6,000 per year to every farmer and a pension scheme of Rs 3,000 per month for farmers after the age of 60 years. "Economists complained about the BJP not merely continuing the Congress' welfare schemes like Mahatma Gandhi National Rural Employment Guarantee Act, the right to food and the right to education, but actually increasing the number of schemes, budgetary allocations, and the importance the government was giving them in its work and campaigns," wrote Prof Ila Parnaik. The reason is that Modi has learnt from the BJP's defeat in 2004 that India Shining does not work. Handouts do. So social schemes are announced first and then the Budget is built around it. Secondly, "Despite a very low percentage of tax filers falling in the highest tax liability brackets, the lion's share of direct tax revenues comes from a small pool of rich taxpayers," wrote N Kwatra. A total of 565 million income tax returns were filed this year, about 4% of the total population of 1,369 million. If rates of direct taxes are reduced for this small number of people the opposition will have a field day in accusing the government of favoring the rich. Number of taxpayers cannot be increased because people do not earn enough. "Overall, 72% of regular workers earned below the minimum monthly salary of Rs 18,000 prescribed by the Seventh Pay Commission." Regular workers are the less than 20% of the total workforce who work in the formal economy. Over 80% work in the informal sector where wages are lower and there are no safety nets. That is why people with PhDs and Masters degrees apply for menial jobs in the government. The rich seek to escape an increasingly despotic land, even risking their lives by paying people smugglers to take them to richer nations, leaving the poor behind. How can you cut taxes on the few who pay any tax?