The way India handles that is by having a progressive income tax that is collected at the federal level and sales taxes at both the federal and local level (CGS

The way India handles that is by having a progressive income tax that is collected at the federal level and sales taxes at both the federal and local level (CGST and SGST). Apart from federal funding of states, they also get all the SGST taxes and are free to set their rates for fuel, road taxes etc. Having multiple levels of income tax is always painful. Also, the government provides free java/excel based tax filing systems with a certain level of sanity checking. Apart from this there are several fremium sites like cleartax to help file taxes but they don't get to lobby. (yes, corruption is inherent and tax evasion is rampant, but at least filing taxes aren't as painful as US tax filing seems to be)