His rationale, the government collects Rs 2 lakh crore through income tax collections. This amount, however, is half of the one auction of 2G spectrum through which Indian government collected Rs 4 lakh crore. Individuals and households are the biggest savers today. If income tax is abolished, the middle class would deposit money in the bank which can be invested in manufacturing and in turn for profits.
The loss in revenue through scrapping income tax can be compensated through investment in manufacturing and infrastructure which in turn would generate revenue for the government in the form of indirect tax.
Also, the black money kept in various overseas banks is estimated at 60 times of the money collected through income tax which is paid only by the middle class people as agricultural income is not taxed in India.
On Agriculture futures
Swamy further illumined that part of the reason food prices are going up today is because large players buy cheap during the harvesting season and sell at profits in the lean season. Farmers are left without profits. Hence, futures trading in agricultural commodities should be abolished.