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Tax the wealthy to correct some faults of free market–Salceda (SABONGONLINEGAME)

Tax the wealthy to correct some faults of free market–Salceda
Author Jovee Marie de la Cruz
Date MAY 03 2021
CITING the threat of a “K-shaped” economic recovery, the chairman of the House Committee on Ways and Means is pushing for the inclusion of a universal basic income (UBI) in the proposed House Bill 8628 or the “Bayanihan 3.” House Committee on Ways and Means Chairman Joey Sarte Salceda said doing so may prevent a “K-shaped recovery, where the educated middle class and above recover while the under-skilled and underemployed suffer a decline in their socioeconomic status.” The lawmaker explained that UBI is a measure to correct some of the faults of the free market, including “over-accumulation of wealth.” “We need those measures in this country,” Salceda added. “Of course, to fund this in the long run, we should rationalize existing taxes on the wealthy.” The senior lawmaker said the most obvious tax on the wealth is the real property tax. “We should update land valuations and pass Package 3 of tax reform, or the Real Property Valuation and Assessment Reform,” he added. Salceda is proposing that government imposes higher rates on low-density housing for the rich in Metro Manila. “If you are living in a high-density condo as a worker in, say Ortigas, you should be paying a lower tax per square meter than someone who lives nearby in Corinthian Gardens. They are causing traffic by gating whole sections of the city and hoarding land for high-density housing,” he added. “They should pay a price for it.” Salceda said government “can even lower taxes on lower-cost housing if we can make the rich pay more.” THE concept of a UBI is gaining support in Congress as the third Bayanihan package was recently approved jointly by the House Committee on Economic Affairs and the House Committee on Social Services. The proposed package contains a P1,000 relief grant, in two tranches, for every Filipino. According to Salceda, his committee is set to tackle the Bayanihan 3 on May 3. “Covid-19 was a jobs killer. It killed many small businesses. While Filipinos resorted to micro-entrepreneurship, mostly via online selling and the informal sector, these are not sustainable income flows,” Salceda said. “Meanwhile, the wealthiest segments of the population were able to buy assets on the cheap. As the economy recovers, they will only get richer.” The lawmaker added that government should explore using the UBI component of HB 8628 more “if Bayanihan 3 succeeds in lifting people out of dire misery due to Covid-19.” SALCEDA explained that the current draft of the Bayanihan 3 includes P108 billion (for the UBI of P1,000 per head), with another P108 billion in standby funds; P12 billion in direct funding for assistance for individuals in crisis situations (AICS) of the Department of Social Welfare and Development and P3 billion for Medical Assistance for Indigent Patients (Maip). It also allocates funding for capacity-building assistance for badly affected businesses in critical economic sectors and aid for farmers. Other funding is allocated for the following: wage subsidies for workers in small businesses; grants to displaced workers; internet access allowances for students and teachers; Covid-19 treatment and vaccines; and, rehabilitation of communities distressed by recent typhoons and floods. Salceda said these were already included in his proposal to the national government as early as March last year. He’s already released an extensive paper on the subject. “If your household has more mouths to feed, you should have more relief,” he explained. “The cap per household under the Social Amelioration Program was skewed against poorer households that tended to have more household members.” Salceda believes HB 8628 would be approved on plenary as Congress resumes session. “In the meantime, we will be talking with the Secretary of Finance.” EARLIER, Salceda proposed increasing dividend remittances by government-owned and government-controlled corporations and withdrawing equity from overcapitalized government firms to partly fund the relief package. He added that the Senate is likely to approve taxes on Philippine Offshore Gaming Operators and on e- . Salceda, principal author of the Real Property Valuation and Assessment Reform (RPVAR) bill, which is Package 3 of the comprehensive tax reform program, has renewed calls for the Senate to urgently pass the reform, citing its potential benefits to property investments and to government infrastructure programs. “Only the superrich can afford to live in palatial homes in the densest metropolis in the world. That is unjust, especially when housing prices for the middle class are becoming unaffordable,” Salceda said. “Covid-19 is not the time for shy incrementalism in policy. We need big structural changes. If that means we explore new ideas, we should.”

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