Through the last few weeks that have suddenly usurped daily life and made us all do the tango, I spent time in wondering what causes the need and the greed of money. What makes you and me try to save something extra for the future, what makes us find ways to hide what we earn, and what prevents us from being dutiful citizens and from paying our taxes.What prevents us from being a good neighbour, from being a good friend to those in need, and from helping those who are not as fortunate as we are.
Time immemorial tells us how leaders have survived on the concept of collection of taxes or dues from the people in the country or region. History has taught us that in the early days taxes were taken between 1/10 to 1/5 of the land produce. When money came into circulation, taxes were developed. Largely history also tells us how the taxes were used to promote the needs of the ruler, the king, the emperor, the religious lords and other such leaders. The rich got richer, the poor got poorer. Yet as the rich has power, they could often control the masses through ruthless leadership. Few instances in History also tell us how people revolted – the French revolution rings a clear bell from our middle school history books.
Lets move to the modern day world. Taxes are synonymous with leadership of countries, barring a few countries which have based their incomes on the natural resources that command a premium. So where do our taxes go? Evidently in the developed nations, the basic needs of education, medical care, security, university education and unemployment are the key factors that people see their money going to. The tertiary services that are also covered by taxes include indirect services such as national protection, research and development, and of course, paying people to manage all these services. So paying taxes should be a good thing!
Lets do the maths! If we pay even Rs. 50,000 a year towards taxes we should get benefits of free education for 2 children worth about Rs 4 lakhs a year, free medical support which could be worth anywhere between Rs. 10,000 to Rs. 10 lakhs, University education worth at least 20 to 30 lakhs, security and unemployment dole if we lose our incomes, and eventually a retirement pension until we die.
But what we do get in reality in a country like India? We the aspiring middle class pay for quality education for our children as we cant bear to send our children to government education facilities which are sub standard, pay for medical expenses to private hospitals because we cant afford to wait in queues or be thrown like cattle into overcrowded public wards with horrific hygene, and pay for inflation which increases the cost of food from anywhere to 100% overnight. If we lose our jobs, we dont get any dole from the government, and for our retirement we have to fund our own resources to make sure we have sufficiently enough to manage when we are jobless for anywhere between 10 to 30 years of the remaining life thats left within us. This is despite the fact that we pay our taxes!
Lets look at other countries then. Most middle class people in countries of Europe, Australia, the UK, Canada and the US get free education until class 12, and subsidized education at university. In many of the European countries university is free. Medical services are covered by insurance in some countries while some countries give free or subsidized (quality) medical facilities. Inflation doesnt exist. What cost $2 10 years ago, is still $ 2 now ! Besides all the factors of financial life, there are yet more factors that improve and exhort the quality of life they live – well maintained nature and open spaces, public parks and public houses, entertainment, etc. People generally are motivated to feel good about their environment, their financial stability, and the support of their government to make life so much better and easier. Yes, there are challenges too. They have to pay their taxes, follow the law!
So why do we Indians then feel the need and the greed for money? why do we often want to dream of the west? The writing is on the wall – we have to fund our lives and our survival despite the so called development in our country, and the ‘ability’ of our governments to claim that we are one of the fastest growing nations. Ironically the government makes sure it feeds its vote banks with just barely enough to ensure their votes, sadly we the tax payers are at the receiving end of the stick. Neither benefits, neither support systems and yet we feed the majority of the government needs by all the taxes that surround us. Why then wont we think of how to save money or prevent paying taxes? why wont the common middle class find ways to keep what they have earned through rightful means, to themselves? When the government gives you nothing in return, the first instinctive reaction is to find ways to support yourself in a world of insecurities.
I dont agree with tax evasion. I started working 20 years ago, and I was so proud to pay my first tax way back then. A paltry Rs 2000 or so, but it was a chunk of my income. Today I continue to pay my taxes, 30% of what I earn goes to the government. I get some rebates for my child’s education and for some paltry savings. But is that enough to plan for my retirement and the future of my family and my children in a country where there is no stability of finances, politics and security?
I can only hope to believe that my grand children in about 40 years may have a better life when our society has transformed, when our government is not saddled with people who have no vision, and are surviving with one foot in the grave, when governments are accountable to us – the people. I can only hope my grand children will see a country where we have no greed because our government ensures quality of life and services for all.
Until then, greed will continue. the need to hide genuinely earned money will continue. Society will continue to rot, and the governments will come and go, and make no changes to the quality of life that surrounds us. Development status of a nation is not something that can be measured by GDP or economic standards of the income of big corporates and 1% of the super rich, but by the quality of life quotient of the 99% of the masses.