Advantages and disadvantages of income tax in india
Answers
Taxation has been used as the form of collection of the government's revenue. So that, the government could be able to spend on various places for the improvement of public services. However, the ways earning the income are changing rapidly, whereas the taxation system is not developed accordingly.
It is the main form of the government's revenue. The higher income earners would be paying higher income taxes and thus, the more revenue will be able to be collected by the government. This accumulation of tax is then used to provide a various services for the citizens comfortable living such as health, education, medicine, technology, research and development, finances, foreign affairs, and constructions. Therefore, the income tax is performing as a useful function for citizens.
but also the income tax does not actually work in the theoretical sense, because people from the higher income brackets do not pay the higher taxes. Since the society changes rapidly, the income sources have also changed and the number of ways to do tax evasions are increasing. However, because the current income tax system does not update with a trend, the lower income earners would have to bear the costs. Therefore, the actual income taxes would not effective and efficient .
In conclusion, the tax can become a main earning source for the government for the provision of various public services. Since the taxation cannot cope with the changing of earning methods, the income tax is not efficient.