Panacea or snake oil?

Finance Minister Nirmala Sitharaman believes that most people will benefit from increase in capital gains tax. "Firstly, unlisted companies stand to hugely gain from this 20% with indexation because their returns every year is generally more than 13%-14%-5%." "What people are looking at is that indexation has been removed, not at the reduction in the tax rate from 20% to 12.5%," she said. Up till now the purchase price of a property was inflated by multiplying it with the difference in the inflation indices on the dates of sale and purchase, as announced by the Income Tax Department. Capital gains tax at 20% was then paid on the revised price. Now people cannot adjust the sale price against inflation from the date of purchase of property but the rate has been reduced to 12.5%. "In almost every case people have a lower tax burden under this system," she said. Perhaps, she could enlighten us with some real examples. Actually this is a sly way to impose an inheritance tax. "Inheritance tax, also referred to as the estate duty or death tax, is levied on the estate of a deceased person. It is collected from the estate prior to estate distribution under a will or intestate succession laws." cleartax.in. In India, "the inheritance tax or Estate Tax was abolished with effect from 1985." Since heirs have not spent anything on the purchase of ancestral property they stood to gain significantly from inflation indexation. Now they will pay a much higher amount. Long term capital gains (LTCG) on shares has been increased from 10 to 12.5% and short term capital gains (STCG) from 15% to 20%. cleartax.in. This is apparently to increase long term investment in the market. The Securities Transaction Tax (STT) on futures has been increased from 0.0125% to 0.02% and on options from 0.0625% to 0.1%. ET. This has been done to reduce speculation and help the youth. As per the Annual Survey of Unincorporated Sector Enterprises (ASUSE), the informal sector  is the biggest employer in the economy. "The informal sector's contribution to GDP (excluding construction and the public sector) was 9% in 2023-24, down from 14% in 2015-16, even as it employed a greater share of the workforce." Productivity growth in the informal sector has been flat since 2015-16. "What these numbers reveal is an increasing distance between those 20-25% of workers that are employed in 'modern' organized manufacturing or services sector, and the rest of the economy. This has serious implication for overall economic inequality." pressreader. Household savings are moving from banks to mutual funds which is causing a liquidity crunch in banks, said RBI Governor Shaktikanta Das. The increases in capital gains tax rates for all forms of investments, including equities and real estate, will encourage people to invest their savings in term deposits in banks, bankers hope. ET. Savers will lose because interest paid on term deposits may be below the rate of retail inflation and will be taxed as regular income. So, helping the informal sector, no inheritance tax, reduction of speculation, lack of liquidity in banks, whatever the problem there is one solution. Just increase taxes. A panacea or snake oil (wikipedia)? How else would they enjoy?