Is Personal Income Tax justified?

Coming from a Chartered Accountant this may seem unusual, but since the last union budget, I’ve started questioning why individuals are required to pay Personal Income Tax (PIT). Isn’t it, in essence, a penalty for hard work and a punishment for success? Instead of being rewarded for their contributions to the economy, those who earn more are hit with higher tax rates, which can feel punitive. Meanwhile, those who contribute less—whether due to unemployment, illegal activities, or other reasons—aren’t penalized in the same way. As a result, PIT can seem like a tool that discourages productivity and success rather than fostering it.

Historically, PIT was introduced as a temporary measure during emergencies, such as wars, when the kings/rulers urgently needed substantial funds. The original intention was never for PIT to become a permanent fixture, but rather to address specific, short-term needs. Over time, however, PIT has evolved into a regular source of revenue for democratically elected governments, far beyond its initial purpose. The practice of paying income tax has become so ingrained that most people don’t question its fairness or necessity—they simply accept it as the norm and governments consider PIT as their right. What happened to the freedom to choose how to use one’s hard-earned income? The government decides that a certain percentage of my income must go to them, and orders someone else to deduct that amount without my consent. This is, in its purest form, an institutionalized extortion.

Most common argument in favor of PIT is that it funds the infrastructure and services that enable individuals to earn a living, such as roads, education, healthcare, and security—all essential for a functioning society and economy. However, it’s important to consider that these services are available to everyone, not just taxpayers. This raises the question of whether it’s fair to tax individuals based on their income when the benefits of those taxes are shared broadly, including by those who may not contribute as much financially. Governments also have access to the country’s natural and other resources and can generate significant revenue through there efficient utilization and consumption-based taxes. The idea that paying income tax contributes to the greater good might actually be misleading.

I believe it's time for the government to make the tax system more democratic and give back the ownership of hard-earned income to those who earned it. People should have the right to decide how they want to use their earnings. This is likely the kind of freedom that our democratic society needs today.