High rates of income tax as a top election issue

In the coming elections in May 2016, this  government is going to be judged by the Filipino electorate on the basis of many issues, among which are the economic growth which is not inclusive, the ineptitude of government in relation to the transport issues (worst airports, horrendous traffic, too many maritime disasters) related to air, maritime and land transport), the globally-condemned "tanim-bala" and "laglag bala" problems, the ceaseless migration diaspora and the five million unemployed and ten million underemployed workers, and many unresolved crimes exacerbated by the worsening drug problems. But the worst issue of them all is the unreasonably high tax rates and the regressive taxation system in this country.

Senate President Franklin Drilon and the House Speaker Feliciano Belmonte Jr. together with many legislators coming from both the ruling party and the opposition have urged the president to support the multi-sectoral initiatives to lower the tax rates which as everybody knows is the highest among the ASEAN member-nations. But the president has remained impervious and unmoved like the rock of Gibraltar, and has stood on his own firm decision not to agree to any such initiative. He has his own reasons but the people especially the wage-earners, the salaried, whose income are taxed at source by way of withholding, are already suffering. The president does not have empathy for the suffering masses. He is an haciendero, an ilustrado like Roxas.

The Philippine tax rates are higher than those of Singapore, Malaysia, Indonesia, Thailand, Vietnam, Cambodia, Myanmar, Laos PDR, and Brunei Darussalam. The problem with Philippine taxation is that the middle class is the sector that is over-burdened. The elite comprising the multi-billionaires, like the taipans that own giant malls, banks, conglomerates of industrial firms and trading firms, the shipping and airline tycoons, the land transportation magnates, the sugar barons and the mining moguls are all protected by brilliant tax law firms and creative certified public accountants who have a lot of tax avoidance schemes. The rich, the powerful, the influential have a lot of strategies to avoid taxes. The middle class have no tax shields at all.

The members of the lower class in the Philippine economic strata do not pay taxes at all. Those who are homeless, jobless and hopeless are perpetual recipients of tax money and public funds, in the form of, among others, the Pantawid ng Pamilyang Pilipino Program (a perfect strategy to perpetuate mendicancy and dependence which encourages indolence). These people do not generate revenues for themselves because the government has failed to create the atmosphere for foreign direct investments that could create jobs. The 12 million OFWs help the economy with annual remittances of no less than 24 billion US dollars. But they do not pay income taxes. Only the middle class people who earn wages here do. They are the overtaxed, underpaid and overworked class, who are exploited by the elite but are the ones subsidizing the masses.

That means that the tax burdens in this country are all placed on the shoulders of the middle class, which includes those whose livelihoods emanate solely from salaries and wages. These include the civil servants who serve faithfully and honestly in the bureaucracy, the workers in the private sectors who can hardly make their both ends meet. These include those who have no houses of their own but are renting apartments and small houses. These also comprise those who are suffering  from  the  horrendous  traffic, from the rising criminality and the worsening drug problems. These include the overworked, underpaid and overtaxed middle class Filipinos. The next president should really address this issue with utmost urgency. The current president seems not to understand the pains of the middle class. Well, he will see come May of 2016.

By then, the voters should choose the best bets based on many burning issues. But the greatest issue, to our mind, is the current confiscatory, regressive and unfair tax systems. A government that refuses even to reexamine the current tax system, an administration that refuses to listen to the pulse of the nation and closes its eyes to the sufferings of the overburdened, underserved and much neglected middle class, to us, is one that does not deserve to win the next year's polls. A nation with a discontented, angry and spiteful middle class is a social volcano that awaits a triggering mechanism to erupt. But instead of violent means, the best revolution is through the democratic process of elections. Next year's polls then shall be decided based on the tax issue. Over and above all problems, the tax issue is what matters most.