Given the financial crunch that most governments are going through, there is one thing that seems to be an easy route - imposing higher taxes on the richer people. Earn more pay more taxes. This has been hotly debated across the world and India is no exception. From the times of Robin Hood, squeezing the rich and passing on the benefits to the poor has had an emotional appeal - partly because they have it and so they can pay and partly because they are always a minority, so politicians can save their back by not adversely affecting the poor, usually their vote banks. However, there have been numerous studies that has shown that there are better alternatives than taxing the rich. Higher taxes for the richer is usually counter productive in the long run as it encourages tax evasion and is a disincentive to work. Also, usually it is ineffective since the rich can plan their taxes effectively and can often save taxes. As of 31s March 2011, the number of effective tax payers in India
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