A tax reform program embodies the greatest economic ideals of government, or something very near to that. In a country that is Exhibit A of great wealth and great poverty, the great wealth in the hands of a few families and the great poverty crippling those at the bottom quintile of the bottom 90 percent, a tax reform program should ideally aim for redistribution. “Soak the Rich” should be its operative phrase.
A president with a bold and radical agenda, which Mr. Duterte claims to have, must aim for a tax reform program that is aligned to that great ideal: radical enough and redistributionist enough to chip in into the tight stranglehold of the few families on income and wealth. To help build an egalitarian society.
Alas, the tax reform draft law that has unanimously passed the House of Representatives (HoR) and is now being deliberated by the Senate is just your standard-issue “reform program.” In the name of balancing everything, it spreads the tax cuts across the board, with the tax breaks to the ordinary wage earners as the supposed main plank.
But a serious, math-based scoring of the impact would say this. The corporate tax cut proposed, a five percent reduction in the corporate taxes, is the heart and soul of the supposed reform. And if you look at the income base, cutting the taxes for the corporate giants may be at the back, front and center of the “reform.” To think that the corporations have the leeway to pay below the mandated corporate tax rate.
A levy on fuel (P6 on diesel) is an assault on the depressed wages of the workingman. It will be even inflationary. Whatever cuts would apply on the personal income tax of the ordinary worker would surely be eaten up by the cruel impact of the diesel levy.
Nothing will change with ordinary lives after the tax reform package shall have been passed by the two chambers of Congress. If something gives, it would be to burden the lives of ordinary wage earners, which the tax reform swears to help.
The firm commitment of Mr. Duterte to end, once and for all, the labor scam called “endo” or end of contract, was thwarted by the sheer lobby power of the employers’ group. In the department order that supposedly addresses “endo,” there were some lame provisions that dealt with the manpower placement agencies, not the employers themselves. “Endo” remains an institution and it is now on firmer footing.
With no fresh batches of workers to politicalize and organize, the trade union groups are now certain to languish in stasis. No fresh blood, no additional union dues for education and organizational work, no second rising for the labor unions. As one with very little ambition in life, the only associations I joined have been journalist guilds and peasant groups. From a personal realm, the failure to end “endo” and give the trade unions a fresh base to organize and train on unionism was a big let-down.
The Filipino workingman is still waiting for the fulfilment of Mr. Duterte’s promise to strengthen manufacturing and resurrect the dead but vital industries – steel, textile, rubber and chemicals. The birth of a real industrial foundry will lead to the rebuilding of the factories and see industrial smoke billow out of the abandoned factories in Valenzuela City. This will lead to many other things, a second springtime for the blue-collar jobs eviscerated by the advent of the service economy.
One year into his term, and about to deliver his SONA, no vague rough draft has been written to fulfil the promise of an industrial rebirth and reboot. The ancient steel plant built by the Jacintos in Iligan is grossly inadequate though Mindanao is an apt setting for a giant and modern steel plant. Mr. Duterte fully knows that light assembly work is not manufacturing in the true sense of the word and what takes place at the free port zones is just stringing up pre-made parts, not real industrial production.
The all-out violence in Marawi City and the terror of having to deal with ISIS affiliates in the country have been consuming much of Mr. Duterte’s time and energy. It is a winnable war, sure, as the limited mass base will force the ISIS affiliates to run out of holding areas in due time. But the war has drained resources that could have been expended for nation-building and the cost of rebuilding the ruins of Marawi would be another strain on the resources of government.
The sheer recklessness of Islamic fundamentalists dreaming of establishing a caliphate will consume much of Mr. Duterte’s attention long after the last of the Maute holdouts has been wiped out. It is some bad seed that, unattended, could mature into a full-blown epidemic overnight. It could spread into Muslim colonies across the country, transforming otherwise business-oriented Muslim enclaves into mini-Molenbeeks.
A laser-like focus on terrorism, which is a must given the Marawi City context, will diminish what could have been a radical effort at reforms and the remaking of the nation, so it could break out of its usual stasis and orthodoxy.
The great hopes of mid-2016, the great expectations of bold and radical reforms, are now flickering embers. We can only hope that Mr. Duterte will not fully miss his opportunity to get his original programs back on track and build great things as he promised.