from The Daily Tribune Backbencher by Rod P. Kapunan
http://www.tribune.net.ph/commentary/20100130com3.html
All because there is a growing clamor for a reduction of taxes, Sen. Benigno “Noynoy” Aquino is cashing in on that sentiment, in the hope of easing the pain of being tagged as an intellectual loafer. For one, the Jesuits, who have been acting as the shepherds of the country’s elite, are already batting the idea of canonizing Cory Aquino, and they have every reason because it was she who restored to them the privilege of tax exemption while playing the dual role of attacking and collecting donations from the government.
This is why Noynoy, and obviously upon the advice of the hypocrites and the self-righteous, has come out in favor of a tax rate moratorium. Thus, people who are not familiar with the way the system works, easily buy the idea.
But no government can wholly rely on taxes to sustain its operational expenses. It must have its own source of income to sustain the ever-increasing expenses mostly confined to improving the welfare of our people. Even the icon of modern-day capitalism, the United States, would fold up if it just relied on taxes to sustain its domestic expenditures and overseas military aggression.
Noynoy, while trying to deceive the people, is showing his ignorance because the huge revenue that will be lost will result in financial collapse, unless the government does something to generate revenues other than collecting taxes. The current policy of pushing higher taxes based on debt-to-equity ratio has proven to be ruinous to our economy. The neoliberal theory on tax which came to be known as the Laffer’s Curve sets out the idea that the government can raise more revenues by reducing taxes is partly true. The proponents argue that a high tax is a disincentive to business, and only encourages cheating and corruption that in the end it is the government that loses out to the grafters.
That theory of reducing taxes to get more on the belief that the capitalists would be honest enough to voluntarily pay, as Noynoy hopes to happen, did not materialize because their orientation has nothing to do with honesty, but to grab at every opportunity where it would add more profit to their business. Noynoy would like to imbibe the US President Ronald Reagan, but little did he know that when Reagan started reducing taxes, the US budget deficit soared and the only way to save itself from financial collapse was to embark on massive borrowings. Thus, from the $908 billion national debt when he left office, the US national debt ballooned to $3.2 trillion.
The economic trumpeters of Malacañang, such as presidential spokesman Gary Olivar and Albay Gov. Joey Salceda, say that our only way to carry out our developmental projects and to service our debt is to increase taxes. Unfortunately that formula has not gotten us anywhere as we now have a swirling budget deficit of P272.5 billion, with some prognosticating this to hit P318 billion. Neither has the government been able to catch up on our swelling national debt now running to around P4.424 trillion. Many are saying the government is practically engaged in “financial lapping.” We borrow just to pay our previous debt, and pay the interest from our meager earnings.
The funny thing about the suggestion of this simple-minded presidential candidate is while he was in Congress he had not even proposed a bill on how to remedy the serious problem of budget deficit. We assume he would considering that he is also a degree holder in economics. If we may add, the democracy his mother claimed to have restored only pushed us faster to bankruptcy. Today we are not only considered as a basket case in Asia but a land ruled by funnymen. Noynoy can only present as his credential “a promise not to steal,” but cannot vouch that his cohorts from that “black and blue” group will not. He is not even intellectually honest to admit that the economic fiasco we now suffer is the direct result of the massive sale of those income-generating state-owned enterprises (SOE) that began with the administration of Cory Aquino.
The intellectual loafer continues to lambast the Marcos administration without telling the people that the government of his mother spent P1,007,895 trillion in just a span of six years, while the Marcos government spent only P486,273 billion in 20 years with many visible accomplishments that the Aquino government even made money through their disposition. Yet, for everything we blame the shortfalls in tax collection to corruption and laxity in enforcement, without admitting we have already crossed the threshold of the “Laffer’s Curve” our taxes today have become regressive such that one by one our last source of income is being wiped out.
President Marcos was not an ideologue but he foresaw the role of the SOEs as complimentary and not contradictory to the private sector. While the private sector could absorb our excess manpower and provide us the much-needed consumer goods, the SOEs could provide them the basic ingredients for production, services and finance by taking charge in the operation of electricity, water, oil, production of steel, copper, aluminum; petro-chemicals; participating in banking to offer them loans and credits, and even services, etc. at marginal cost and interest. Noynoy need not be told that such policy is not borne out of generosity, but honed to that objective of restoring our competitiveness. Marcos was not an economist like him and Gloria, but certainly he understood the difference between 35 percent earned in taxes from that of 100 percent earned in profit.
(E-mail: rodkap@yahoo.com.ph)
All because there is a growing clamor for a reduction of taxes, Sen. Benigno “Noynoy” Aquino is cashing in on that sentiment, in the hope of easing the pain of being tagged as an intellectual loafer. For one, the Jesuits, who have been acting as the shepherds of the country’s elite, are already batting the idea of canonizing Cory Aquino, and they have every reason because it was she who restored to them the privilege of tax exemption while playing the dual role of attacking and collecting donations from the government.
This is why Noynoy, and obviously upon the advice of the hypocrites and the self-righteous, has come out in favor of a tax rate moratorium. Thus, people who are not familiar with the way the system works, easily buy the idea.
But no government can wholly rely on taxes to sustain its operational expenses. It must have its own source of income to sustain the ever-increasing expenses mostly confined to improving the welfare of our people. Even the icon of modern-day capitalism, the United States, would fold up if it just relied on taxes to sustain its domestic expenditures and overseas military aggression.
Noynoy, while trying to deceive the people, is showing his ignorance because the huge revenue that will be lost will result in financial collapse, unless the government does something to generate revenues other than collecting taxes. The current policy of pushing higher taxes based on debt-to-equity ratio has proven to be ruinous to our economy. The neoliberal theory on tax which came to be known as the Laffer’s Curve sets out the idea that the government can raise more revenues by reducing taxes is partly true. The proponents argue that a high tax is a disincentive to business, and only encourages cheating and corruption that in the end it is the government that loses out to the grafters.
That theory of reducing taxes to get more on the belief that the capitalists would be honest enough to voluntarily pay, as Noynoy hopes to happen, did not materialize because their orientation has nothing to do with honesty, but to grab at every opportunity where it would add more profit to their business. Noynoy would like to imbibe the US President Ronald Reagan, but little did he know that when Reagan started reducing taxes, the US budget deficit soared and the only way to save itself from financial collapse was to embark on massive borrowings. Thus, from the $908 billion national debt when he left office, the US national debt ballooned to $3.2 trillion.
The economic trumpeters of Malacañang, such as presidential spokesman Gary Olivar and Albay Gov. Joey Salceda, say that our only way to carry out our developmental projects and to service our debt is to increase taxes. Unfortunately that formula has not gotten us anywhere as we now have a swirling budget deficit of P272.5 billion, with some prognosticating this to hit P318 billion. Neither has the government been able to catch up on our swelling national debt now running to around P4.424 trillion. Many are saying the government is practically engaged in “financial lapping.” We borrow just to pay our previous debt, and pay the interest from our meager earnings.
The funny thing about the suggestion of this simple-minded presidential candidate is while he was in Congress he had not even proposed a bill on how to remedy the serious problem of budget deficit. We assume he would considering that he is also a degree holder in economics. If we may add, the democracy his mother claimed to have restored only pushed us faster to bankruptcy. Today we are not only considered as a basket case in Asia but a land ruled by funnymen. Noynoy can only present as his credential “a promise not to steal,” but cannot vouch that his cohorts from that “black and blue” group will not. He is not even intellectually honest to admit that the economic fiasco we now suffer is the direct result of the massive sale of those income-generating state-owned enterprises (SOE) that began with the administration of Cory Aquino.
The intellectual loafer continues to lambast the Marcos administration without telling the people that the government of his mother spent P1,007,895 trillion in just a span of six years, while the Marcos government spent only P486,273 billion in 20 years with many visible accomplishments that the Aquino government even made money through their disposition. Yet, for everything we blame the shortfalls in tax collection to corruption and laxity in enforcement, without admitting we have already crossed the threshold of the “Laffer’s Curve” our taxes today have become regressive such that one by one our last source of income is being wiped out.
President Marcos was not an ideologue but he foresaw the role of the SOEs as complimentary and not contradictory to the private sector. While the private sector could absorb our excess manpower and provide us the much-needed consumer goods, the SOEs could provide them the basic ingredients for production, services and finance by taking charge in the operation of electricity, water, oil, production of steel, copper, aluminum; petro-chemicals; participating in banking to offer them loans and credits, and even services, etc. at marginal cost and interest. Noynoy need not be told that such policy is not borne out of generosity, but honed to that objective of restoring our competitiveness. Marcos was not an economist like him and Gloria, but certainly he understood the difference between 35 percent earned in taxes from that of 100 percent earned in profit.
(E-mail: rodkap@yahoo.com.ph)
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