The leftist income tax

"From each according to his ability, to each according to his needs" is a slogan popularised by Karl Marx in his 1875 Critique of the Gotha Program. Who is supposed to implement this in a socialist society? Naturally this has to be government, otherwise who is to establish ability and who will establish need. If people have to go to court for everything, such a society will spend most of the time in court. It demands special people with impartial ability to judge ability and need, almost a magical quality. Such people don’t exist by the way. 

What kind of slogan suits a capitalistic society? If I have to invent it, it would be “to everyone at the same price”. And who sets the price? That of course is market, demand and supply. Capitalistic society has no need of any government, except the need to ensure security of markets and to ensure that markets are fair. The capitalistic society fails to comprehend public goods.  Without pricing, it can’t understand the value or relative value. The irony is that what capitalism produces is essentially a pubic good, a fair market. Everywhere markets emerge, it creates equality of access through pricing. We can think of pricing as the impartial ability to judge ability and need and that exactly is what socialism requires.  Capitalism in essence is the best implementation of socialism, the one that actually works, fairly. 

What are brands and what is insurance, both products of capitalism? Isn’t branding trying to get from each according to his ability to pay and insurance trying to give each according to his needs? Socialism is a vision of society better implemented through capitalism. A powerful capitalistic government is then a contradiction in terms. Capitalism doesn’t wants anything from government, it is just a necessary evil to ensure security. 

The question that bothers me in the capitalistic society is that of income tax. Income tax comes straight from the socialism text book - “from each according to his ability”. Why do we have income tax brackets and why is it based on a percentage? An equal society should share the cost of running the nation equally. If government is a public good, why should some people pay more? The right tax in the capitalistic society may be called Nation Building Fund. Whatever money is needed by the government beyond its sources of income should be divided equally between all the people of the country. During the financial year 2017-2018 the personal income tax  collected was 4,19,884 Crore.  Number of people who filed income tax in the same period was 6,32,50,002. India has a population of about 1.3 billion with roughly 40% children below 18 years. Number of people in the country that enjoy the benefits of living in a country are around 780 million. The number of people who pay income tax in India is around 5%. On average every tax payer paid around Rs 66 thousand. If all the capable people of India (not children) had to contribute the same amount, per person contribution would come to Rs 5383. It will actually reduce the income tax paid by people in the smallest slab from 10% @ 2.5 lakhs i.e 25 thousand by 80%. Thus every tax payer on average is carrying the burden of 11.3 non tax paying Indians.

Rs 5383 per year Uniform Nation Building Fund sounds very good except when we look at the definition of poverty in India. India has some 20% of the population below poverty line which is roughly around annual income of Rs 10,000.  Rs 5383 is more than 50% of the annual income of everyone who is under poverty line. 

I understand that many people cannot afford to pay a Uniform Nation Building Fund contribution . That is fine. What I don’t understand is that 95% of the Indian population which enjoys leftist  benefit, however meager they are and still use the word leftist as a slur? I hear the references to swabhimaan allover the social media, but doesn’t swabhimaan applies to paying for what you receive from the country? Indians have been protesting and vandalising public property for as long as we have become a country, but suddenly people are asking for recovering damages for destruction caused to public property. That is good start and I love it. We should have started earlier. Irony is that statistically only 5% of the people deserve to be asking for it. Rest 95% had no contribution to building that public property in the first place. Why so much gap between the words and reality? 

I love the management principle that one can only manage what one can measure. It is time we start the Uniform Nation Building Fund and Nation Building Loan Fund. Our income tax contribution should be split between these two funds. Rs 5383 goes to Uniform Nation Building Fund and any excess goes to Nation Building Loan Fund which gives nominal interest on that excess paid tax. If we pay less than Rs 5383, then the balance comes from Nation Building Loan Fund as a loan at the same nominal interest. If we don't pay any income tax, then all of it comes from the Nation Building Loan Fund. Let’s just calculate this for few years (actually, we can do this calculation with the given tax data) and see how are people doing.  May be government can make name tags with percentile scores (0-100) or some platinum, gold, silver, bronze stuff and call them swabhimaan tags. That will be a good way to build the swabhimaan of the country. I am sure many people who are poor by income tax standards will pay Rs 5383 to buy their swabhimaan. If swabhimaan  sells, use it.  Why take away the opportunity of taking pride in their contribution to nation building from people?  Why hide the interdependence of people from each other and make them enemies, if we can make them understand and align towards nation building? 

We don’t need to go to history to look for swabhimaan, we can use swabhimaan to build the country and create swabhimaany Indians.