Lawful Theft: When Taxation Outruns Justification

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 India’s tax system may wear the badge of legality, but beneath the surface lies a design that systematically favors wealth—while treating the middle class and poor as tax machines. What the Constitution legitimizes, logic exposes as exploitation.

 

Favours for the Wealthy: A Systemic Advantage

1. Corporate Tax Cuts, Unlimited Returns

  • Corporate tax rates dipped to 22% in 2019 (15% for new manufacturers), sacrificing over ₹1 lakh crore annually in revenue.
  • Yet corporate profits soared, and growth in real wages and job creation lagged significantly—even post-tax cut.

2. Wealth Tax Abolition

  • Removed in 2015 despite symbolic revenue, —only ₹1,008 crore was collected in FY2013–14.
  • Only a surcharge replaced it—easy to avoid and insufficient to curb asset accumulation.

3. Preferential Capital Gains & Surcharge Relief

  • Tax on capital gains (shares, dividends) remains at 10–15%—much lower than high slab rates for regular income.
  • Recent budgets cut the surcharge for super-rich from 37% to 25%—a massive tax relief for the ultra-wealthy.

4. Bad Loan Write-offs

  • Public banks wrote off over ₹11 lakh crore of NPAs in six years. Much of it tied to high-profile corporates, effectively absolving large players of accountability while taxpayers fund the loss.

 

Who Actually Pays? Dragged into the Debt Wells

Middle Class in the Grinder

  • In FY2022–23, personal income tax collections (₹10.45 lakh crore) surpassed the corporate taxes (₹8.26 lakh crore)—a rare record in India’s fiscal history.
  • Only 1.6% of India’s population pays income tax yet serves as the country’s main source of tax engine.

GST: Regressive with a Punch

  • Despite exemptions on essentials, studies show the poorest 50% pay around 31% of total GST burden, nearly equal to middle 30%, while the top 20% pays 41%—far from progressive.
  • Oxfam earlier claimed bottom 50% bore 64% of GST, while only 3–4% came from top 10%.
  • GST collections have soared—crossing ₹1.87 lakh crore in a month—yet social spending on health and education remains stuck at 2.2%–2.9% of GDP.

Double Taxation for Salaried Workers

  • Salaried individuals are taxed at source (TDS), then again via GST, LP insurance, education fees, even toothpaste.
  • Corporates often escape these burdens through deductions. The system taxes every rupee of middle class—twice.

 

Architecture of Inequality

Legal Structure

              Logical Flaw

Corporate tax cuts to 15–22%

              Personal income tax not reduced equivalently

Abolished wealth & inheritance taxes

              No progressive wealth redistribution

GST—flat indirect tax model

              Sets poor and middle class as tax base

Surcharges for high-income

              Still minimal compared to exemptions

Even direct tax relies heavily on individuals: by 2022–23, personal income tax exceeded corporate tax for the third time since 1991–92.

 


Tactical Rebellion: Demand More Than Compliance

Here is what India can and must do:

  1. Reinstate wealth and inheritance taxes, focusing on 0.04% ultra-rich—potentially raising revenue equal to 2–3% of GDP.
  2. Make GST income-sensitive: Add credits or slabs aligned to earnings so essentials don’t hit poor wallets harder.
  3. Reform capital gains taxation: Align share income percentage closer to salaried rates.
  4. Strengthen tax enforcement: Only 5% of companies are paying 97% of corporate taxes. Close loopholes, expand assessments.
  5. Boost public expensing transparency: Use new tax proceeds to visibly improve health and education services.

 

Closing Thoughts

India’s Constitution promises justice and equality. Even its laws encourage equity. Yet the current tax system tilts heavily toward the privileged—making legality a cloak for injustice.

The rich play the game with loopholes and exemptions. The middle class bears the cost. And the poor gets taxed both ways. Compliance must evolve into Commonwealth—a system where justice and logic align.

If you want to turn this into platform visuals, carousel excerpts, or shareable social posts for Law vs Logic, I’m ready. Together, we can amplify this revolt for tax fairness.

 

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