5 Alternatives to Income Tax

• 18 June 2016 | 1468 Views | By Mint2Save

Irrespective of the professions, most of us are bound to pay income tax. Earn mere Rs. 10,000/month or whopping Rs. 2,00,000. Frankly, no body likes being taxed. First of all amount is not nominal, and the frequency of scams, bad services, bribery confirm all the time that our money is not being utilised properly.  Rebellious and revolutionary, the idea of escaping income tax or finding its alternative is always exciting.

You would wonder that there are some nations, which don’t have income taxes, but do harbour on other taxes such as on fuel consumptions, property purchasing etc.

Here is a small list, where we list alternatives which can replace income tax and introduce better choice making mechanism among people so that they can save more.

1. Taxes on Luxury: Luxury is not for the common man. Five Star Diners, travelling in business class, staying in extravagant resorts and hotels, using high end electronics are just a few luxury options that are being increasingly used these days. More of a status symbol and nothing more, luxury can be a good source of tax income. Levying extra tax on these luxurious items would not impact the rich to any extent, but would be breather for those whose income tax gets replaced by it.

2. Energy Consumption: Before starting on this, lets define energy here. Fuel consumption and electricity consumption is a fine indicator of your standard of living. Driving classy sedans and SUVs would tend to consume more fuel and only those who can afford these biggies can afford them. While these vehicles are already taxed on their ex-showroom price, pitching in a tax model based on their fuel consumption would be an interesting idea.

Similarly, an increased surcharge for higher electricity consumption can be explored too. A common example of having the finest gadgets and using them quite frequently is what triggers electricity bill to escalate. Attaching a certain amount of tax on higher electricity charges can be an interesting idea.

3. Property Buying: Capital Gain Tax is charged on all property based transactions. Since, the seller has to pay these taxes, the amount is usually adjusted (in a non documented manner) between the seller and the buyer.  However, there is no demarcation when high end property is purchased. This means the ones buying a beachside villa and those purchasing a flat have to go through the same taxation cycle. There is no difference. When one’s purchasing power is high, they should be taxed higher for acquiring properties in prime areas.

4. Gambling Tax: Gambling is a sin sport. Still from horse racing to casinos, tons of money is being made and lost. Thanks to gambling. While a lot of nations have banned gambling, it is main source of revenue for a lot of nations too. Money earned via gambling should be globally taxed, specially when the winner is has a different nationality.

5. Liquor, smoke etc: Alcohol and nicotine are not just limited to the rich, a huge percentage of the middle class consume a lot of these two. These intoxicants, though widely discouraged via posters and advertisements, can be used in a more discrete manner when specifically taxed. Putting in a common tax on these, which, added by luxury tax on high end ones, can prove to be a spend check as well as a good income source for the government.

The five points mentioned above are provolone tin one form or other, but are not used in their complete potential. Replacing income tax can be tough job and it doesn’t make a country a tax haven. It just gives the residents to choose better, save better and plan their expenses from an early stage.