Okay, I don't claim that this could be the right answer but this is just a hunch -- I'm just putting some common sense observations with basic economics to come up with this hypothesis. Why do these groups hate the new tax laws? The new law focuses on lowering income taxes. According to these economically illiterate bozos -- the poor will suffer under the TRAIN law. But let's consider the changes that can be seen in this new tax table...
Let's do a comparison of the old tax law vs. the new tax law for the income tax of PHP 250,000.00. In the old tax system, you really had to pay the following:
PHP 22,500 + (0.25)(PHP 250,000 - PHP 140,000) = PHP 50,000
However, under the new law, you get to be tax exempt if your annual income is PHP 250,000.00 and below and below. More taxes are applied on stuff like gasoline (though this may require further study), vehicles (to avoid too much traffic), sugar and cosmetic surgeries. This has my mind boggling why complain about the prices of certain goods increasing? At the same time, certain taxes will teach you to budget your money while taxes on certain items will authorize some of the poor to sell at a higher price while they can be tax exempt as long as their income is PHP 250,000 and below.
Under the TRAIN tax law, you end up paying taxes ONE WAY OR ANOTHER
This chart by IBON Foundation (credits go to PNoy Ako Blog and maybe, we should also include #TindigPilipinas as an activist group too) may reveal the whole reason why they are angry with the TRAIN Law in spite of the benefits. I mean, why get mad at TRAIN if you're a person whose income is PHP 250,000 and below that you're basically TAX EXEMPT. In other words -- most of your taxes will be in the form of excise taxes.
The whole "tax exempt" status isn't completely tax exempt either as there's still the excise tax. Do you hypocritically want a Coke Float after the rally? You buy one Coke Float and you end up paying for the excise tax which goes into the government's treasury. That means whenever Renato Reyes Jr. hypocritically gets a Coke Float then he ends up becoming an indirect taxpayer. I guess they were happy during the time when they didn't pay for any taxes and the only person who paid tax was the one who sold the Coke Float. Now, the non-taxpaying activists have become taxpayers whenever they hypocritically get a Coke Float in the form of an excise tax.
So how are the "tax exempt" people still helping the Philippines? Well, even if they don't directly pay taxes through whatever BIR forms are signed such as the monthly income, quarterly tax and withholding tax -- they are still contributing whenever they actually buy something under the excise tax. For example, a person who's "tax exempt" may not file his papers but he or she ends up paying taxes whenever he or she buys sugar (ex. for making camote fries), gets a sweet doughnut and the like. I guess those activists still want to have the privilege of rallying, getting money, not getting taxed and hypocritically buying Coke Floats without an excise tax at the end of the day.
There's much less room for rich shaming under the TRAIN law -- which also means the decline of welfare state policies
Here's the argument that Filipino activists do love to use a lot as they play the victim card. It's that the rich must be punished for simply being rich (even if the rich got rich through legitimate means) and the poor are blameless (never mind squatters themselves also contribute to environmental degradation aside from unethical businesses) because they are "always the victim". Those are two very lopsided views that Get Real Philippines warned about -- one is where you don't help the poor at all and the other is where the poor have their sense of entitlement. In short, it's all about the problem of rich-shaming.
Back then, big businesses were always taxed much bigger whenever they earned much money. Here's the big differences before and after:
For an income of PHP 400,00.00:
Old tax system = PHP 50,000.00 + (PHP 400,000.00 - PHP 250,000.00)(0.30) = PHP 95,000.00
New tax system = (PHP 400,000 - PHP 250,000)(0.20) = PHP 30,000.00
Added income after taxes of PHP 65,000.00 in the new tax system
For an income of PHP 800,000:
Old tax system = PHP 125,000.00 + (PHP 300,000 x 0.32) = PHP 221,000.00
New tax system = PHP 30,000.00 + (PHP 400,000 x 0.25) = PHP 130,000.00
Added net income after taxes of PHP 91,000.00 in the new tax system
For an income of PHP 2,000,000:
Old tax system = PHP 125,000 + (0.32 x PHP 1,500,000.00) = PHP 605,000.00
New tax system = PHP 130,000 + (0.32 x 1,200,000.00) = PHP 514,000.00
Added net income after taxes of PHP 91,000.00 in the new tax system
For an income of PHP 8,000,00.00:
Old tax system = PHP 125,000 +(0.32 x PHP 7,500,000.00) = PHP 2,525,000.00
New tax system = PHP 490,000 + (0.32 x PHP 6,000,000.00) = PHP 2,410,000.00
Added net income after taxes of PHP 115,000.00 in the new tax system
So why are they angry that the rich are paying lower taxes? A possible suspicion lies that it would also mean the end of the ridiculous 4Ps program where the poor just wait for their allowances rather than really work for their money. If the rich are made to pay more then there's more money for 4Ps. The money may increase from PHP 3,000.00 per family to PHP 3,000,000.00 (just my exaggeration) per family under 4Ps sooner or later.
There would be less money for 4Ps type programs under the TRAIN law. Can you imagine for every rich person who has an extra PHP 115,000.00 net income means PHP 115,000.00 lost to the budget of the 4Ps program? I guess those Filipino activists and Yellow Socialists will miss the days when the rich will have to pull their bandwagon. Instead, everyone has to take turns in pulling the bandwagon for people who need to be in it such as the sick and the elderly.
Other factors that could also lead to them hating the TRAIN Law
It amazes me how stupid Filipino activists would actually blame TRAIN for the increasing prices. For one, do they even consider the reality of SUPPLY and DEMAND? Prices increase when supply is high and demand is low. Prices decrease when supply is high and demand is low. Also, should we mention that the main problem of rising gasoline prices is a world market problem? Prices of gasoline were lower under Noynoy Aquino because the world market had more supply than it is under Prseident Rodrigo R. Duterte. Don't tell me TRAIN law is also affecting the world market when President Duterte's policies are limited to the Philippines?
We could consider the factors that could have led to peso devaluation against the U.S. dollar. It's not always in the hands of the Philippine president. Also, a stronger peso may not always spell a good economy either. Do you know some of the best economies in the world have currencies way weaker than the Philippine peso? Take a good look at South Korea and Japan where their money is weaker than the Philippine peso. Try having your Philippine peso converted into yen and won and you'll realize that both money is much weaker. But guess what? Both economies are actually stronger than the Philippines because of good economic policies such as economic liberalization.
Not to mention, I want to believe that these people are opposing TRAIN because having lower tax rates may encourage more Foreign Direct Investors to arrive. More FDIs means the activist groups will lose their relevance and power. That means there will be fewer people who can rally for their cause because there are more jobs available for them. That also could be another possible reason why they hate the TRAIN Law.
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