Proposed Effective Wealth tax and streamlining of taxes by ending VAT, GST etc
Land cannot be easily hidden as compared to cash etc. So, Effective Wealth tax is more efficient to collect and gives more tax collection than income tax or other forms of tax. Wealth tax reduces land hoarding and decreases value of land, increases growth and reduces unemployment. How ?
Consider a person who has bought 10 flats for hoarding. Say each flat is worth Rs 20 lakhs. As per wealth tax law, he may be able to skip out 1 or 2 flats, but on the rest, he will have to pay 1% of Rs 1.60 cr as tax every year or pay.
The effective wealth tax stops hoarding of the land and thus brings down the land prices. Since land is main component required to start any business, due to the lower land prices, lower cost of land lowers the cost of land for entrepreneurs leading to flourishing of new businesses and thus number of business increase, and so does employment. In Other Words, Effective Wealth tax does not discourage.
Effective Wealth tax does not harm those who are not hoarding land and property and are utilising the property by using it for industry, business etc. since there will exemptions for income tax paid and salaries given to employees.
Besides effective wealth tax, it is also proposed to end GST, VAT etc. GST, VAT etc. kills small businesses and also encourages tax evasion.