TFDS are important because it shows the direction in which a country's tax regime is moving. The later the tfd is in a year, the heavier the average tax burden. The world over, over time, tfds have been slipping down, as governments have taxed more and more to meet growing expenditure.
The maiden effort to put together a tfd for India has been made by Delhi's Centre for Civil Society (CCS). In 2000, it was as early as on March 14! Tax burden per person (man, woman and child) is only 20 per cent, almost half of that in the US and UK.
Can we then say that our tax burden is one of the lightest? Not really. That's because, one, only 2 per cent of Indians pay tax. Two, the small amount of tax paid in relation to the gdp and the government's non-tax revenue helps to reduce the number of days an Indian spends working off the burden.
Said Parth J. Shah, president, ccs: "Oliver Wendell Holmes says taxation is the price we pay for civilisation. I feel taxation is the price we pay for the lack of civilisation. Taxation represents political society, while self-responsibility suggests civil society. Every time we pass another law or regulation, every time we raise taxes, we are admitting the failure of individuals to govern themselves."
Shah feels that our reality is better reflected in the government expenditure burden on the taxpayer, over one-third of which is met from printing money or borrowing. In 2000, governments collected Rs 3,217 in taxes from each Indian but spent Rs 5,965. But a debt overhang leads to inflation, which is like a tax since the government raises spending not by taking money from the people (as tax or loan) but by lowering their purchasing power. Says Shah: "The government sucks out the yolk from the egg but keeps the shell intact."
To pay off the expenditure burden in 2000, an Indian worked 137 days or till May 16. May 16 would then be called Freedom From Government Day.