Paying taxes Honestly?

Most people I know pay taxes and also file tax returns. However to say that they file taxes honestly is a little difficult to say.

As a social psychologist if you do analyze why people do not pay taxes, the following seem to be the reasons:
a. Does not seem reasonable: Why should I pay taxes which take away so much of my income when I am not sure that there is some direct benefit to me? In an environment when people are breaking out of joint families, it is difficult to ask a person in Gujarat to pay for some development that may / may not happen in Bihar.
b. Many people are cheating: There is not enough evidence that others are paying honestly, so why should I pay. May be right or wrong, but this seems to be a psychological reason.
c. Leaders are cheating: No clue whether this is true or false in India, but in the US of A, every person who was appointed to the White House paid back taxes. In fact Charles Rangel, head of the President’s main tax-writing committee, admitted to many mistakes and errors that forced him to resign. How can the common man be expected to fill out the form (after deciphering which form, which edition, etc.) taxes correctly when the Secretary of the Treasury and Chairman of the Direct Taxes Committee cannot?
d. It is too complicated: Filing tax returns means going to a CA and paying huge fees. There is a whole industry out there which has to be fed to ‘explain’ an Act which is supposed to impact everybody above the poverty line. This is ridiculous that Finance Minister after Finance Minister promises to simplify taxation provisions, but ends up complicating it much more. Sad, but true.
e. Consequences of getting caught: Are there any consequences of getting caught? In most cases where businessmen get caught, the cost of coming out of the tax net is less than the cost of paying all the taxes :). Most of it goes to the guy who can catch and almost nothing to the government. But since nobody is complaining, I guess it works.
f. No advantages of paying tax: If I buy a railway pass I get to travel by train, if I buy a toll pass I get to use the toll bridge, what advantages do I get for paying Income taxes? Well nil. In an economy where all actions are done with some expectations, paying taxes is too complicated!
g. When I walk into a MBA class on ‘ethics’ and ask them which bills do we pay on time. All of them say ‘Phone bill’ and ‘Electricity bill’ . On asking ‘Why’ they say “if we do not pay, it will get cut off”. Clearly we pay if we need FURTHER USAGE of the same resource. So if a person is leaving town and going away for good, he/she does not mind leaving the grocer, doctor, milkman, paperman,….high and dry? Well not all of us will do this, but the taxman is not really an ‘ethical’ priority.
more to go..but later perhaps.
By:
DharniGroup.com