Does the taxation economy screw the salaried employee ?. I've been thinking a lot about it recently. Government of India has a very profitable income tax department in which I fall in the highest tax bracket (ie people who are paid more than 160 USD per month) - which means that my cumulative tax burden comes to around 33% of my total income.
Let us compare that with a business man shall we ?. He is incorporated and has his own private company. He has a big house which is given to him by the company , a company car and take regular business trips abroad (to Switzerland , France or Maldives depending on the season). All in all, his company declares a profit of 8-10% and pays tax ONLY for that profit.
On the other hand, an employee of the same firm - pays tax on his entire income (the basic deduction is considered as the "normal expenses") and not on the profit. Essentially I'm getting screwed in no small fashion.
Economics is a strange thing - these people buy stuff to avoid paying taxes and I pay taxes - at least they get some bang for their buck (while I don't). All I get is a big Form 16 to fill in.
I wonder what I can do about it ... Nothing, I guess.