Rahul Mehta Gandhinagar LsCandidate

Consider a tax which is 0% on bottom 99% and falls mainly on top 1% . Is this tax necessarily good for bottom 99%? Pls give your views
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(NOTHING to do with GST - a separate question on taxation issue)
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imo, this need NOT be imo good for bottom 99% !!!
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This is a REAL irony in whole issue of taxation imo. And imo all recallists should be most aware of this issue.
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Consider India. As of today, adult population is about 87 crore. .
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We take adult population as 100 crore just for round number.
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Consider a tax-law-clause which creates a tax which is 0% on bottom 99 crore and falls ONLY apex 1 crore. There are REAL life scenarios where such tax can damage the bottom 99% !!.
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But within that 1 crore, say the persons who are bottom 1 lakh have to face x% of their income as tax while the the person in top 1 lakh have to pay x/10% of their income as tax.
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Or "worse", say within that 1 crore, the persons who are bottom 1 lakh have to face y% of their wealth as tax while the the person in top 1 lakh have to pay y/10% of their wealth as tax.
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This tax may look good, but will damage the bottom 99%. WHY?
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Because this will reduce the rate at which surplus wealth that will accumulate with bottom 1 lakh wrt rate of top 1 lakh. So how does THAT damage bottom 99%?
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So the ability of bottom 1 lakh in top 1 crore to form an independent company, that will compete with company of top 1 lakh will reduce !!! So how does THAT damage bottom 99%?
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Because overall productivity in economy of whole nation and wages of bottom 99% increase only when new companies. And by new companies, I mean REAL new companies where company owners are putting their own capital (not capital from some venture funding elitemen - these startups are satellites of large company owners only). And if bottom 1 lakh in top 1 crore have less savings due to higher tax rate, then their ability to start a new company decreases
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Thats why, imo, one should make sure that a tax law is NOT regressive anywhere along the income curve and not regressive anywhere along wealth curve. So even if a tax looks progressive from (0 to 99) range, if it is regressive within (99 to 100) range, that tax law will decrease the rate at which wages of bottom 99% increase and rate at which productivity of whole economy increases.
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Some real life example is long term capital gain tax on land. Say land was purchased in 2010 for say Rs 1 crore and sold after 3 years say sold in 2017 for Rs 2 crore, then tax rate is 20% on income i.e. Rs 20 lakhs will apply. But if land was purchased or obtained before 1991, then the price of 1991 will be taken as base price !!! Now apex 1 lakh of India has huge land that it had obtained decades ago. Due to this clause, they all would get huge benefits. Where as bottom 1 lakh in top 1 crore will have less land that was bought by them before 1991. And so they wont get any benefit of "take 1991 base price if land was bought before 1991" clause !!
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So whole capital gains tax on land mainly falls on apex elitemen, the super-apex will face LESSER tax than bottom of apex.
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So solution? solution is to have a tax rate which falls EQUALLY on all. A so called progressive tax rate, when dissected is more regressive. Thats why, wealth tax turns out as the LEAST defective tax system - even lesser than income tax.
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My point from whole article is --- recallists should NOT ignore a tax clause by saying "oh !! this falls only on top x% of population". Because that x% can create new companies that can raise wages of bottom (100-x). So tax law which looks good in first round need not be good when all effects are taken in consideration. . .