Back in 1967, the then Indian finance minister Morarji Desai had the brilliant idea of raising taxes well beyond their existing level; the maximum marginal tax rate was raised as high as 97.75 percent.
Desai, who was better known for drinking his own urine, reasoned that people would pay up and that India’s budgetary problems would be more manageable.
Instead, the reverse happened. India has always had a problem with undeclared wealth, a kind of parallel economy which is called black money. The amount of black money increased by leaps and bounds after Desai’s ridiculous laws were promulgated.
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