Normally I try to provide facts and express my opinion on a particular topic but this blog is going to be a different experience for me since I just want to highlight on a particular topic and leave up to the reader to reflect on it. I was prompted to come up with this topic based on my shopping experience since I realized loopholes is there anywhere and everywhere.
Fish and its math:
People prefer Fish fry vs Fish kulambu and
this creates imbalance as far as how rate is calculated. Let’s assume one kg of
fish with head is 500 INR and without Head is 600 INR (Demand is more); Now a
trader who is influential and cash savvy may place wholesale order for 100
kilos of fish without head and end up getting fancy price of 400 rs/kg due to
its volume of business. This guy visits different market and sells fish without
head still for 500/kg thereby crashing local market. Well there is nothing
wrong since the guy is being smart, but the problem is trade does not happen in
a fair manner and creates internal conflicts amongst vendors and therefore
Unions are formed where rules are formulated. Now comes the bigger problem –
Union creates politics and rules are exploited in the name of Loopholes.
Unemployment Calculation in US
Unemployment rate is a key economic
indicator and a closely followed one in USA as it helps to understand health of
the economy for one of the biggest democracies in the world. But the way it is
calculated leaves everyone puzzled. In simple terms unemployment rate is
nothing but dividing the number of unemployed persons by the number of persons
in the labor force and multiplying that figure by 100; Problem comes in how we
define “Unemployed” and “Labor force” – good percentage of people who are part
of Employment discrimination are not part of labor force (termed as
‘Discouraged’ workers) and also people who have been searching for employment
in the last 12 months but not in the last 4 weeks are not part of the labor
force (termed as ‘Marginally attached workers’); Excluding these two sections
from the labor force gives an underestimated Unemployment rate. By this way
they keep the panic down amongst public , save money on providing unemployment
benefits etc., But you may think this is more of a flaw and not Loophole ? Read
the final paragraph
Business entertainment tax in Canada
Basically
business entertainment tax in Canada allows businesses to deduct upto 50% on
the costs of entertainment. Some of the examples that fall under this category
are Costs of ticket for theatre/concert/athletic event, costs of private boxes at
sports facilities, cost of cruises, cost of admission to fashion shows, costs
of entertaining guests at clubs and the most difficult part is how do we police
such activities hence it is one of the most abused tax loopholes in the country.
Tax exemption for Agricultural Income in India
This seems to be a great initiative to
promote agricultural sector but then why do we see many farmers getting into
suicide every year and pretty much every region in India. It clearly shows
farmers are not the beneficiary of this tax loophole but it is the wealthy
politicians who make maximum use of this one. So this is how it works –
Politicians fixes a Benami person, buys a huge land under Benami’s name,
thereby converts black into white, all the black money from unknown sources is
shown as income from agriculture and hence gets tax exempted. Do you think this
is more of a flaw and not loophole ? Read next paragraph
Now that I have given few examples I think
these are not flaws but ‘Loopholes’ that exists in the system deliberately by
that way people can take advantage. Both ruling party and opposition party take
advantage of these provisions and these are not kept in the dark instead it is
thrown wide open to public to make use of these loopholes thereby allowing
people to exploit the rules to their advantage. Loopholes exists in every
region across the globe and pretty much every aspect of living like Healthcare,
Insurance, Income tax, Agriculture, Immigration, Free trade agreements etc.,
