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Tax and Social Contracts of India

Assignment : Understanding a culture is not as easy as characterizing it based on common behaviors. In fact, a culture can be defined in a multitude of ways. One way is by examining how the people interact with their governing body. The goal of this assignment is to choose one culture and explore its “social contracts”.
Please write a three to four page essay, (cover page and work cited page not included) answering the following questions:
• Describe the chosen culture in terms of its social, political and economic structure.
• Explain how this cultures development has been effected by its “social contract” over time.

Tax and Social Contracts of India

The Direct Tax Code proposes to cut through the maze of tax laws, starting on a new slate towards overall objectives of growth and equity. The core idea is to expand the tax base to increase the tax to GDP ratio, even while keeping per capita tax liability low. The tax base should rise as compliance costs, exemptions, and resulting arbitrage-induced inefficiencies fall. Clear simple writing should reduce ambiguity and litigation.
A sharp shifting up of tax slabs is the carrot provided to swallow the stick of vanishing exemptions. The Code which will be applied as of 2011, has been put out for comments. It has a chance if discussions succeed in hammering a new social contract. Low rates and minimum exemptions would work if everyone pays, and the State also delivers.
But old habits die hard. The public debate is often about each group justifying its exemptions and arguing for their continuation. With the latter, revenue will collapse as applicable tax rates fall. In the old India, different groups demanded and received special treatment. The question is; can each group give up its special treatment in return for an efficient system free of

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