Tag Archives: Tax Cuts

News

India lowers income taxes and increases deductions for savings

Leave a comment

The story is here from the Times of India, sent to me by Shalini.

Changes to tax rates

Here are the current tax rates:

Now 10 per cent is levied on incomes of Rs 1.6-3 lakh, 20 per cent on Rs 3-5 lakh and 30 per cent above Rs 5 lakh.

Here are the new rates:

The government on Wednesday initiated radical tax reforms through a draft code that aims at moderating income tax rates, abolishing Securities Transaction Tax and increasing deduction for savings up to Rs three lakh. The new Direct Taxes Code has suggested a significant expansion of personal income-tax slabs, with levels of relief going up with incomes.

Releasing the Direct Taxes Code that will ultimately replace the over four-decades old Income Tax Act and bring all other direct taxes like wealth tax under its purview, Finance Minister Pranab Mukherjee today said if reasonable level of discussion happens on the code, a bill could be placed in the winter session of Parliament.

The Code said that the 10 per cent tax rate should apply to an annual income of Rs 1.6-10 lakh per annum and the 20 per cent rate to Rs 10-25 lakh.

The maximum rate of 30 per cent, it added, should apply to income above Rs 25 lakh per annum.

The new rates, it said, “are expected to yield the existing level of revenues with the revised comprehensive tax base proposed in this code”.

Indian tax brackets

Here are my calculations… are they wrong?

First bracket (10%): 1.6 to 10 lakh = 10 x 100,000 rupees = 1,000,000 rupees = up to 20,000 USD.

Second bracket (20%): 10 to  25 lakh = 10 x 100,000 rupees = 1,000,000 rupees = up to 50,000 USD.

Third bracket (30%): over 25 lakh = 10 x 100,000 rupees = 1,000,000 rupees = over 50,000 USD.

Changes to encourage more saving

Not only are they slashing income tax rates but they are increasing the deductions for savings.

I can’t believe this. India is doing everything RIGHT and we are doing everything WRONG. Even Canada is signing free trade deals, while Inspector Clouseau is trying to make us into North Korea. India is buying arms, we’re cutting the F-22 and missile defense.

News

Angela Merkel opposes spending, China stimulates solar energy production

Leave a comment

Story here, from the always-on-target Investors Business Daily. If you prefer a podcast, then here is your podcast.

Angela Merkel is the Chancellor of Germany. She also has a Ph.D in Physics.

First a little background:

British Prime Minister Gordon Brown’s idea for a “global stimulus plan” has met with resolute opposition from Germany’s leader, Angela Merkel. Good to see that common sense isn’t dead, at least in Europe.

Brown, who’ll be hosting the leaders of the G-20 nations later this week as they seek a way out of the global financial crisis, has pushed what he calls a “global New Deal” of up to $2 trillion in added spending.

But he’s had trouble selling his idea to others — to put it mildly. Czech Prime Minister and EU President Mirek Topolanek called it “a way to hell.” Even Bank of England Governor Mervyn King trashed the idea.

And then Merkel jumps on the pile:

Now comes Merkel, who, as head of the world’s third-largest economy, has probably killed Brown’s big idea.

“I will not let anyone tell me that we must spend more money,” she said over the weekend. “We must look at the causes of this crisis. It happened because we were living beyond our means. . . . We cannot repeat this mistake.”

We need to listen to Merkel, because she knows what she is talking about. She has a perspective we don’t because of Germany’s tragic history in the 20th century.

After World War I, Germany tried to spend its way out of a recession brought on in large part by the onerous war reparations.

As Weimar Germany printed money, inflation soared (in 1918, $1 bought 4.2 German marks but by 1923, $1 fetched 4.2 trillion marks) and unemployment surged.

If you want a real stimulus, try being like the communist Chinese. I blogged about their sales tax cuts on automobiles before, and about how worried they are about our deficit spending, (along with everyone else in the G20). But look what I found over on Ace of Spades HQ.

They cite an article from semiconductor.net, and here is an excerpt:

…The Chinese government alerted all silicon, ingot, wafer, cell, and panel manufactures that it intends to announced a very aggressive Solar subsidy that is equivalent to $3 USD per installed watt, in cash, as an incentive to aid the Chinese population to install solar. Currently in China non UL, non CE, and non TUV panels can be purchased for under $2 per watt…

…With the combination of lower panel prices, renewed Federal and State incentives, utility rebates, the finance freeze thawing out, and oil prices moving up, Solar is once again looking awfully attractive. When you take into consideration the increased value of your home upon a solar installation and the tremendous credits and rebates available, you can literally install solar for 20 cents on the dollar….

Why did we elect a socialist ACORN lawyer from the party that got us into to this mess in the first place?

News

The Republican alternative budget

Leave a comment

Tired of trillion dollar deficits as far as the eye can see? Worried that Obama is going to bankrupt the country? Angry about the planned reduction of charitable giving by 9 billion dollars? Or tax hikes on energy companies that will raise consumer energy prices? Are you doubtful that any amount of tax hikes on the productive sector can pay for all this spending?

Well, I spotted this post outlining the Republican alternative to Obama’s budget over at Investors Business Daily. (H/T Club for Growth)

This is definitely worth reading! The first part reiterates how tax cuts have stimulated the economy and job creation in the past under Ronald Reagan and George W. Bush. The article then list all the details of the GOP budget proposal which would get us similar results.

Instead of socialized medicine, the GOP would lower prices by increasing consumer choice and competition among medical plan suppliers. And they would also introduce a simplified tax system that would reward hard work and productivity:

…[The GOP budget] would establish “a simple and fair tax code with a marginal tax rate for income up to $100,000 of 10%, and 25% for any income thereafter, with a generous standard deduction and personal exemption.”

Prefer the current system? The GOP plan lets you stay in it. The capital gains tax would be cut and the Alternative Minimum Tax would be fixed to prevent huge surprise tax hikes each year.

…businesses with fewer than 500 employees would get a deduction of 20% of their income, so “these engines of growth will continue to fuel our economic recovery and companies can compete with their foreign counterparts, while keeping jobs here at home.”

On energy policy, the plan would open the Outer Continental Shelf to oil and gas drilling and use part of the federal share of revenues for alternative fuel programs. The Arctic Coastal Plain would be opened for exploration and development. Obstacles to new nuclear power plants would be removed.

Read the whole wonderful thing! And don’t forget: they have a podcast of this article read by the professionals at OutloudOpinion.com. Subscribe here!