Do you know how much of your money goes into indirect taxes?
First of a three - Part I
E&Y series on price people pay for govt
The background: A tiny overcrowded apartment block, a sprawling new housing complex with a few penthouse flats thrown in for good measure are all located cheek-by-jowl, in one of the bylanes of suburban Mumbai.
Like any other typical household in Mumbai, the residents of this bylane, tend to crash before the TV set each night while having dinner, exhausted by their efforts in earning their daily bread (butter and jam), not to mention their daily commute, whether it be by the local train, a motorbike or a car. With the budget around the corner, the dinner conversation tends to revolve around what it will bring and where it will pinch the most.
It is typical for each of us to wonder what the budget will bring, but have we paid a thought to the taxes, both direct and indirect (including cascading effect of uncreditable indirect taxes), that we are currently paying?
For this purpose, we decided to pick a family from the apartment block and housing complex and didn't forget to include the pent house owner. For sake of anonymity let us fall back on good old Bollywood and call these individuals Amar Akbar Anthony.
The Tax Foundation, a US-based nonpartisan educational organization, celebrates the Tax Freedom Day annually. The Tax Freedom Day seeks to answer the question: "What price is the nation paying for government?" As their website explains: An official government figure for total tax collections is divided by the nation's (USAs) total income.
In 2010, in the US, taxes amounted to 26.89%of the American's income, which represents the stretch of 99 days from January 1 to April 9 of the year. Thus, last year, Americans celebrated the Tax Freedom Day on April 9. Americans worked well over thre! e months of the year, from January 1 to April 9, before they earned enough to clear this years tax obligations at the federal, state and local levels.
We decided to be different and decipher how much of taxes Amar, Akbar and Anthony have paid to the government during the financial year 2010-11 (of course, the income tax return will be filed by July-end) and whats left for them? True, taxes are the price we pay for civilization, as has been well put by American jurist Oliver Wendell Holmes Jr. But at the end of the day, it doesnt harm us to ask: Whats in it for me?
The curtains part: On to their story...
Scene 1: Amar hands over 8.67% of his income to govt
Gross total income: Rs 3,01,500
Total tax outgo: Rs 26,154
Amar is your typical next door youngster. Holding his first job in Mumbai, he often misses his mother's home cooked food. But well, the freedom, including the ability to smoke freely perhaps more than makes up for it. Living in Mumbai has taught him a thing or two, including the dignity that a job brings, so what if it is a call centre job with its graveyard time shifts. A few years later, he shall study further, perhaps do an MBA. Right now, he is content with learning the ropes and aspires to be a team leader in his organization, next year.
E&Y series on price people pay for govt
The background: A tiny overcrowded apartment block, a sprawling new housing complex with a few penthouse flats thrown in for good measure are all located cheek-by-jowl, in one of the bylanes of suburban Mumbai.
Like any other typical household in Mumbai, the residents of this bylane, tend to crash before the TV set each night while having dinner, exhausted by their efforts in earning their daily bread (butter and jam), not to mention their daily commute, whether it be by the local train, a motorbike or a car. With the budget around the corner, the dinner conversation tends to revolve around what it will bring and where it will pinch the most.
It is typical for each of us to wonder what the budget will bring, but have we paid a thought to the taxes, both direct and indirect (including cascading effect of uncreditable indirect taxes), that we are currently paying?
For this purpose, we decided to pick a family from the apartment block and housing complex and didn't forget to include the pent house owner. For sake of anonymity let us fall back on good old Bollywood and call these individuals Amar Akbar Anthony.
The Tax Foundation, a US-based nonpartisan educational organization, celebrates the Tax Freedom Day annually. The Tax Freedom Day seeks to answer the question: "What price is the nation paying for government?" As their website explains: An official government figure for total tax collections is divided by the nation's (USAs) total income.
In 2010, in the US, taxes amounted to 26.89%of the American's income, which represents the stretch of 99 days from January 1 to April 9 of the year. Thus, last year, Americans celebrated the Tax Freedom Day on April 9. Americans worked well over thre! e months of the year, from January 1 to April 9, before they earned enough to clear this years tax obligations at the federal, state and local levels.
We decided to be different and decipher how much of taxes Amar, Akbar and Anthony have paid to the government during the financial year 2010-11 (of course, the income tax return will be filed by July-end) and whats left for them? True, taxes are the price we pay for civilization, as has been well put by American jurist Oliver Wendell Holmes Jr. But at the end of the day, it doesnt harm us to ask: Whats in it for me?
The curtains part: On to their story...
Scene 1: Amar hands over 8.67% of his income to govt
Gross total income: Rs 3,01,500
Total tax outgo: Rs 26,154
Amar is your typical next door youngster. Holding his first job in Mumbai, he often misses his mother's home cooked food. But well, the freedom, including the ability to smoke freely perhaps more than makes up for it. Living in Mumbai has taught him a thing or two, including the dignity that a job brings, so what if it is a call centre job with its graveyard time shifts. A few years later, he shall study further, perhaps do an MBA. Right now, he is content with learning the ropes and aspires to be a team leader in his organization, next year.
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