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Why I Don’t Keep My Money With My Government

Posted by Raunak Mahajan on September 4, 2012

Image courtesy: Conor Ogle

A few years back, I started investing in a Government Savings Plan. The deal was that for 15 years, I would have to put a minimum amount into the fund annually, and after the completion of the maturity period I would get the principal amount back along with the accumulated interest. The real incentive was that my investment every year would be tax exempt.

Yesterday, I withdrew the money I had invested so far. I was penalized a small amount, but it didn’t change my decision. I had decided that I was not going to keep my money locked in with my government for a long period. The Government is not only injudicious in its spending, it is also taking me for a ride with its unfair tax policies. Let me elaborate,

1) Our President until 2 months back spent more than US$ 50 Million of taxpayer’s money and sovereign debt on foreign travels. Why is that a problem? Because in India, the president is only a nominal head with no powers at all in decision making. It is a post which is a legacy of the British Raj and contributes mere pittance to the running of our affairs.

2) In 2009, our government allocated Coal mines to randomly selected business entities at prices only fraction of the market price. The Auditing Agency in a recent study reported that by not auctioning the national resources, the government has cost the exchequer of our country close to US$ 33 Billion. The Coal blocks were allotted as per the whims and fancies of those in power.

3) Similarly, in another recent finding of the Auditing Agency, it has been alleged that another national resource, the 2G Mobile telecom spectrum was allotted to the private telecom operators on a first come first served basis instead of an auction. The loss to the country from this unpardonable act was close to US $ 32 Billion.

4) Recently, a group of District level politicians traveled to China on a state sponsored trip. The objective of the trip was to study the best Dairy practices and replicate the same back home. The group returned saying that they learned nothing that was better than what we were already practicing in India. Duh! Who said that China has the best Dairy practices in the world! That trip should have been to New Zealand, Denmark, US or the EU.

5) In India, only close to 3% of the population pays income tax. No, its not a typo. 3% it is and I am one of them. This figure is unpardonable after 65 years of self rule. This figure is low NOT because our laws are slack. It is low because our government mechanism is not efficient and honest enough to get more people to pay income taxes. Since India taxes both income and consumption, it is only these 3% people that get taxed from all directions. In no court of law can that be called fair treatment.

6) I fall in the income tax slab that ends up paying close to 30% as tax. I was taught in school that we must pay taxes for the development of the country, our infrastructure, education, health services, military etc. etc. But I don’t see any of that happening.

a) Most of the National Road Highways are developed as Public Private Partnership (PPP). So I end up paying a heavy toll fee whenever I use a highway. This means I am paying for that infrastructure out of the income I have left after paying income tax!

b) India did not win a single Gold Medal in the recently concluded London Olympics. A country of 1.2 Billion and not a single Gold. Clearly the government in not using my tax money to facilitate sports either.

c) Government hospitals are either non-existent or lie in ruins with the most unhygienic services. Not to mention the grave shortage of competent doctors in them. Not surprisingly, most of us have to visit private hospitals for treatments and spend more money from the money I had left after paying my taxes! So evidently, my tax money is not being utilized in providing me good healthcare either.

7) Apparently a lot of my tax money is going to pay salaries of government employees who’s efficiency and work ethics are a crying shame. The rest of my tax money is spent in giving subsidized food and other incentives to poor people to win their votes and come back to power. And all the while, sovereign debt keeps increasing while my currency keeps declining.

And this is why I do not want a big government. I do not question its intent. Socialism is a benevolent concept, but impractical. It works in small communities but not at a Federal level. Big governments cannot put a mechanism in place which will deliver services effectively. With time they will only accumulate so much debt that you can kiss your country goodbye. Do you think the Greeks own Greece, or that the Italians are the true masters of their country? NO! Leftist policies and attitudes have pawned these countries to others….and there is no getting them back!

Sadly, above stated facts have raised doubts in my mind about long term fiscal health of my country. I do not want to keep my money locked in with a government that doesn’t know how to manage its finances.

I have better odds at a roulette table.


8 Responses to “Why I Don’t Keep My Money With My Government”

  1. Is it true that your government has NOT adopted the use of computers? I suppose those in power would be afraid that their “shifty business practices” would be exposed. It’s no wonder then that they only tax 3% of its people. I’m sorry to hear that you’re part of this statistic. I’d guess that as soon as someone found out that they might be a target for taxation, they’d just collect their belongings and move…I’m only guessing of course. However with no computerized method to track anything the government does, there cannot possibly be an accurate census of its people, where they live, where they move to, or whether they’re even still alive.

    I also read that when government inspectors came to inspect public schools and hospitals that on average only 25% of teachers and 45% of health care workers were actually found to be onsite (now I didn’t say “working” just that they were “present on the grounds” when the inspectors came). The state of Wisconsin set a precedent for the other states to pass legislation that virtually abolishes teachers’ rights and the unions they belong to. Unfortunately though, the governor also reduced tax levies on corporations in our state that won’t even start to be paid back until after the 2014 election cycle. You might’ve seen this one…?

    In any case, I’m honestly surprised that your government even dispatched these inspectors since apparently the corruption runs so deep that these “public school teachers” earn 5 times the rate that private teachers earn and regardless of whether they show up for work or not. I know in the US, these same workers wouldn’t hold onto their jobs very long. How does your government justify this in the news…or with the people themselves? Well, I guess I can answer that myself—they lie!

    It’s no wonder you are pissed off, my friend. The US Treasury bonds that have been around since World War I are touted as being “fail proof”. In other words, the US Government guarantees a bond’s value forever. Unlike your country though, there’s no exemption for US bond owners; it’s mandatory that they pay taxes on interest earned each year.

    Bottom line—If I were in your shoes, I’m certain I would’ve done the same thing. It must be a little disheartening though that you cannot trust your own government to do the right thing. Oh hell, what am I talking about! 86% of the US population (statistically speaking) disapproves of the job our Congress (specifically the House of Representatives) is doing. You and I differ politically, but I honestly think that our government might become MORE corrupt under Romney than Obama.

    One last word—They should’ve come to Wisconsin. After all, we’re known as the “Dairy Capital of the US”. 😀

    • Raunak said

      and we are the IT capital of the world 🙂 of course they have adopted computers 🙂 but the learning graph is pathetically slow.
      My argument is also in favor of small governments across the world. Socialism works only in very small communities and units, for example you could have a socialist system of running your family or maybe your neighborhood, but it cannot run a country.politicians are not equipped to deliver the utopia it promises.

      • I really have to reign in my sarcastic comments (India is the IT call center to the world). I don’t disagree that socialism will work and would work WELL for small groups of people. But changing the mindsets of those who are selfish or self-indugent might not be so easy. There’d have to be a genuine “kinship” or “fellowship” between those deciding this for themselves. Good post—throught provoking reality check!

  2. I hear you. You make good points. I like bonds, certain bonds. If the dollar crashes though, then I don’t like bonds. I don’t see it happening, but some people speculate that we might go back on the gold standard. I do like roulette, too. But I like things where I have more control. That is just my preference.

    • Raunak said

      thanks for sharing your thoughts 🙂 I feel that with the government I have absolutely no control. A big government functions like a monopoly. Just like monopolies in business are unhealthy for markets, a big federal government is unhealthy for the nation.
      I better stop ranting or they might get my blog removed 🙂

      • That’s funny…lol! I hope that is just a joke.

      • Raunak said

        lately the government here has become pretty intolerant…they have shown no hesitation in censoring opinions…from blocking some twitter accounts to asking google to filter material…this government is in a panic mode and is trying everything possible to curb freedom of speech.

  3. damdems said

    Reblogged this on DamDems and commented:
    Big Government is taking all of us for a ride

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