Financial Daily from THE HINDU group of publications
Sunday, Nov 24, 2002
Financial Daily from THE HINDU group of publications Sunday, Nov 24, 2002 |
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Variety
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Income Tax Columns - Say Cheek How they put in more money D. Murali
WE all know how Jaswant was so eager not long ago to put more money in men's hip pockets and ladies' handbags. And how Kelkar has swished a blade in both places, though there are a few who staunchly believe that Kelly has done just what his boss wanted. Well, how do they go about in the US when it comes to putting more money in common man's pockets? One such effort is by a top-men group called The Business Roundtable (TBR). It is a lobbying outfit made of CEOs who represents companies with $3.7 trillion in annual revenues, that's roughly Rs 1,77,60,000 crore. Its latest demand is a $300-billion tax-cut next year to push more cash into workers' pockets. The amount would approximately translate into Rs 14,40,000 crore, less than 10 per cent of the annual revenues, but more than six times the total tax revenue that Yashwant Sinha budgeted for 2002-03 at Rs 235,800 crore. That is, take all the money that trickles into the Finance Minister's hands, add five more parts to it, and divide it among a population of 288 million, which is about one-fourth of India's. For easier comparisons, a school lesson activity puts it this way: The US has 8 rice cakes/2 people, that is, 4 rice cakes per person, while India has 8 rice cakes/22 people, that is, about 1/3 rice cake per person. "We thought it had to be large, we thought it had to be quick, we thought it had to be pretty broad-based in stimulating demand," says John T. Dillon, the Chairman of TBR They say the proposal is six times as large as the $51-billion stimulus package George Bush had in mind for helping economic revival. And twice the US Government's Budget deficit for the fiscal year, and almost 3 per cent of the US economy, estimated at $10 trillion. Much of the tax benefit TBR seeks revolves around writing off as much as 75 per cent of equipment purchase cost to the Profit & Loss account. Other demands include removal of `alternative minimum tax' on companies; making corporate dividends tax-free for individuals; and exempting the first $10,000 in salaries from Social Security taxes. As our own politicians, Bush faces the challenge of brewing a bill that makes everybody happy. There, they would be unhappy if there were only 3 rice cakes per head, instead of the current 4, though we should be happily dividing one cake among three. Ah, if only, instead of Kelly, Dillon were in Dilly.
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