Distributing the tax burden

Distributing the tax burden


Posted 00:27am (Mla time) Jan 30, 2005
By Randy David
Inquirer News Service



Editor's Note: Published on page A13 of the January 30, 2005 issue of the Philippine Daily Inquirer


IN GENERAL, no tax is ever acceptable to a people. This is even more so if the government that collects it is perceived to be useless, illegitimate and corrupt. A good government is one that is able to show the public that the taxes it demands are collected justly-i.e., according to one's earnings and assets-and entirely spent for the common good.

Herein lies the biggest problem of the present government. Most Filipinos believe that taxes in our society are collected more on the basis of expediency rather than on justice. That the government has been relying more on consumption taxes than on property and income taxes. That it has zeroed in more on the fixed-income earners with no breathing space than on those with variable incomes, like freelance professionals and businesses. The public feels that those who bear the brunt of taxation are not the rich who have unlimited ways of hiding their true incomes, but the poor and lower middle classes, like the ordinary government employees, who have single and easily traceable incomes.

On top of this, citizens do not see their taxes being spent to improve social services but only to line the pockets of corrupt bureaucrats and to pay for government debts accumulated by bad leaders.

People may know little of the superiority of the value-added tax (VAT) over the ordinary sales tax or excise tax. But they know that whichever form of tax is collected, it will always be passed on to them as final consumers. Therefore they believe that any increase in the VAT or any expansion in its coverage will always be, in the last analysis, an additional burden that they cannot hope to pass on to anyone but their families.

They want the government to first plug the drain in public funds caused by massive corruption. They want the government to go after the large tax-evaders, to tax the wealthy instead of the poor by focusing on large incomes and lavish consumption, rather than on meager incomes and basic needs.

In view of this, it may make very little sense to warn the Filipino public that they face the consequences of an impending economic collapse if the fiscal deficit is not immediately solved. Many think they have nothing further to lose in the event of an economic crisis. They don't see themselves as meaningful stakeholders in the present system. Not a few may even believe that a crisis is what the country probably needs to bring the national leadership to its senses.

The point is you cannot expect the public to pay for the debts of unaccountable government corporations, which the government has indiscriminately assumed year after year. The government must give a full accounting of these obligations, and assign responsibility, before it should even begin to pay a single centavo of public money to service them. Only then can it begin to allocate the burden of paying these obligations. It can sell the remaining assets of these GOCCs, fire their overpaid executives, and settle their debts once and for all; or it can hold on to them and continue to service their debts. In either case, we all end up paying the costs in the form of higher tariff or higher taxes. I believe we deserve to know at least whom to curse for this state of affairs.

I am certain that, in the final analysis, the present government will choose the path of privatization. This relieves the political leadership of the heavy political cost of imposing new taxes to cover recurring debt service. It may also restore to the national budget the flexibility it needs to address the requirements of a growing population. But what a pity that government-run firms in our country should always be known as inefficient and graft-ridden. In other societies, they do not have that stigma, and they do function well as the public's best defense against the abuses of oligopolies. As important, in the hands of a developmental state with a clear vision, such public firms can become the spearhead of a sustainable and equitable form of development.

I believe that the whole tax debate has focused too much on the need to raise additional revenue immediately to avert a looming crisis, and too little on the need to streamline mechanisms so that existing tax laws are fully implemented and various forms of leakage in the revenue system are plugged. Just to give an example: rental from high-end accommodations is probably one of the most under-reported earnings in this country. One can say the same thing for the incomes of top practitioners in the legal, medical and entertainment fields. So much tax-evasion takes place at the upper levels of our society that it has become almost immoral to take every centavo of income and consumption tax from the majority who do not earn enough, for no better reason than because it is easy.

For the last five years, public school teachers have been demanding an increase in their monthly salaries. Government says it understands their situation but that it has no money to pay the increase they are asking for. I say, if you cannot increase their pay, stop withholding the 10-percent income tax from their salaries until you can give them the level of remuneration they deserve. Why should tax privileges be the prerogative of the independent power producers?

Only a thin line separates taxation from exploitation, and our government seems bent on doing everything to erase it.

Should we give up on people power?

Should we give up on people power?


Posted 01:14am (Mla time) Jan 23, 2005
By Randy David
Inquirer News Service



Editor's Note: Published on page A13 of the January 23, 2005 issue of the Philippine Daily Inquirer


IF the participants of Edsa 1 and Edsa 2 were to be asked today if they would join another people power uprising, they would likely say no. They would say that people power promises many things but delivers nothing. That it substitutes the shortcut of a political surgery for the long painstaking task of building a healthy democracy.

I think they would be essentially correct in their analysis, but wrong with their decision. As a non-violent but unconventional mode of changing a dysfunctional government, people power has its virtues. It revitalizes the people's engagement with their society as citizens. It opens for them the chance to free themselves from entrapment by self-perpetuating structures. It arouses in them the universal optimism associated with the arrival of a newborn-the expectation of a better future. People power is a form of consciousness. It is a means to achieve a set of goals, not the project itself.

But the sense of frustration is understandable because powerful instincts do define the spirit of people power -- the readiness to act and to measure the outcome in terms of a morally gratifying national future. One can say the same thing of the great French and American revolutions. In our case, the projected future had three basic goals: democracy, good governance and social justice. These elements mark the principal enemies of people power in our time, namely: dictatorship, corruption and poverty.

The 1987 Constitution laid out the fundamental goals of the people power revolution and provided us the basic legal and institutional instruments with which to realize our desired national future. Almost 20 years have quickly passed, and we should be in a better position to assess the extent and quality of our achievements. Were the two Edsas really just a waste of time? I would hope not. But instead of thinking of people power as a single event, it may be useful to think of it as a continuing process.

We have made significant headway in preventing a future dictator from abusing constitutional powers in order to install an authoritarian regime, but we are far from eliminating those conditions that make the rule of the strongman a seductive alternative. Such conditions precisely point to the unredeemed promises of the two people power uprisings in our country, namely, the eradication of mass poverty and the elimination of corruption. The persistence of poverty and corruption in scandalous proportions persuades many Filipinos today that all talk of institutional reform is meaningless without political will. And political will cannot come from the conventional politicians who benefit from the system; it can only come from visionary leaders who oppose the system.

It would be tragic if we abandoned the spirit of people power today just because the governments that rose to power in its wake produced the opposite of its avowed intentions. That is not unexpected. For as long as people power is not driven by a clear and coherent alternative plan, its aftermath will always be dominated by the masters of the familiar. We saw this in 1986 and in 2001: the old politicos jockeying for strategic roles in the process of reconstruction, advocating the same worn-out formulas and exploiting the new regime's need for instant stabilization.

In this regard, it is worth noting that Edsa 1 carried a greater potential for radical change than Edsa 2 because it was willing to go farther and risk more to dismantle the old society. It threw away the existing Constitution and, for one year, ruled as a revolutionary government. It abolished the Batasang Pambansa, and reorganized the Supreme Court. It removed most of the local government officials and replaced them with its own appointees. It appointed a Constitutional Commission to write a new constitution. The new government had every opportunity to institute a new social order, but became more timid as it began to worry about its own survival. This timidity grew in proportion to its growing dependence on the services of traditional politicians.

Edsa 2 provided yet another opening for change, but this one was closed almost as quickly as it came into view. What started out as a comprehensive battle for good governance was narrowed down into a surgical removal of a corrupt and incompetent president, and his replacement by the vice president. The movement's revolutionary edge was blunted by a Supreme Court decision that represented the whole episode as the voluntary resignation of a president rather than the overthrow of an entire regime. Except for the incumbent president and his Cabinet, everyone else was retained in place, as if corruption was a disease lodged in only one person.

We now know that corruption is not just the fault of a person; it is, more importantly, the function of a whole system. It is not only an individual trait, but an entire way of life. When Gloria Macapagal-Arroyo stepped into Joseph Estrada's position in January 2001, she, in effect, began to preside over this way of life. Nothing changed because the roles and the script remained.

We may think of people power as a nation's willful attempt at self-organization for a brighter future. Ranged against it are the weight of tradition and the allure of the familiar. The challenge it will always face is how to set up, to borrow a phrase from Jurgen Habermas, its own "Constitution for the victorious peace."

We should never give up on people power. But those who choose to answer its call must work hard to prepare the ground for its own Constitution.

Rationalization

Rationalization


Updated 11:44pm (Mla time) Jan 15, 2005
By Randy David
Inquirer News Service



Editor's Note: Published on page A15 of the January 16, 2005 issue of the Philippine Daily Inquirer


THE WORD has crept in quietly in recent discussions about administrative and fiscal reforms. If taken seriously, it could spell the beginning of political modernity in our country. The vigor with which it is being opposed is an indicator of the staying power of obsolete interests. It shows us that corruption in our society is not a cultural flaw, but a basic ingredient of our political system.

Rationalization simply means altering existing policies and procedures in order to make them more efficient in the attainment of the state's avowed goals. Its most important objective is the elimination of sources of unearned income from the national life. "Rents," as these incomes are sometimes referred to, are of many kinds, but the most prevalent are those that are extracted and dispensed at will by public officials at all levels of the state. The German thinker Max Weber called rents "the economic basis of all aristocracies." In our own time, rents are the social basis of "crony capitalism."

When a friend or ally of a public official is given an accommodation such as a huge loan from a government financial institution, we call that a rent. "Behest loans," as they were once called, did not end with Marcos. Like logging concessions, they continue to be dispensed as part of the spoils of politics. When some favored ally is given exclusive rights to import a certain commodity, that too is rent. When the president orders the government's social security agencies to invest public pension funds in shares of stocks owned by a friend, and then collects commissions, that is rent-seeking.

Money given by gambling lords to authorities so they won't be touched is also rent. When budgetary allocations are released in exchange for favors, that is rent-seeking. When political donors are exempted or given special treatment by revenue laws, rent is also created.

Rent is what we may also call tax breaks or tax incentives that are given to the well-connected, independently of performance, and almost without expiry dates. There are presently more than a hundred existing Philippine laws that grant such duty and tax exemptions to a large assortment of enterprises and individuals. They are very costly in terms of taxes foregone. This is not to say that such special incentives or exemptions are all bad. Indeed, some of them are necessary to encourage investors to develop sectors of the economy that are either very risky or require enormous amounts of capital. The perks are given in exchange for enduring contributions to society's development objectives. But for these incentives not to degenerate into rents, they must be time-bound and linked to performance.

It is ironic, but not unexpected, that the recent legislative deliberations on the bill seeking the rationalization of such special incentives became the occasion for intense lobbying by congressmen on behalf of the particularistic interests they represent. We earlier saw this behavior in the debate on the cigarette and liquor tax. The same kind of lobbying is likely to mark the discussion of the bill seeking to raise the VAT by 2 percent and remove the exemptions from its coverage. Unless the voices of reason prevail-and one doubts this very much given the composition of the congressional majority-these attempts to set things right will eventually succumb to the overwhelming power of rent. The event will thus confirm Thomas McHale's 1959 description of the Philippines as a country where "business is born, and flourishes or fails, not so much in the market place as in the halls of the legislature or in the administrative offices of the government."

"Booty Capitalism," a book published by the Ateneo Press (1998), takes off from this insight. In it, the author, Paul Hutchcroft, identified the basic elements of this phenomenon as it exists in the Philippines: "(1) the high degree of favoritism, as when oligarchs and cronies plunder the state apparatus for particularistic advantage-a feature some have characterized as 'rent-seeking gone wild'; and (2) the capacity of those oligarchs currently holding official position to inflict punishment on their enemies." Hutchcroft provides a useful distinction between bureaucratic capitalism, in which "bureaucratic elite extracts privilege from a weak business class," and booty capitalism, where "a powerful business class extracts privilege from a largely incoherent bureaucracy."

The word "booty" emphasizes both the plunderous ways of Philippine capitalism and the violence that usually marks the scramble for booty. The principal protagonists in this struggle are the family-based oligarchies that have an economic base outside the state but need the resources of the state to accumulate wealth. They are the main sources of political contributions during elections, and in many ways, politicians and public officials are nothing more than their paid agents. As a captive institution, the booty capitalist state can play neither a regulatory nor a developmental role.

Under these conditions, Philippine politics is reduced to a cyclical struggle between the oligarchical "ins" and the oligarchical "outs," with the masses and the middle classes serving as their cannon fodder. Rationalization is the state's desperate attempt to distance itself from the oligarchy, an idea whose time has come, but, without a constituency, is bound to fail.

Leadership and the common good

Leadership and the common good


Updated 10:14pm (Mla time) Jan 08, 2005
By Randy David
Inquirer News Service



Editor's Note: Published on page A13 of the January 9, 2005 issue of the Philippine Daily Inquirer


THERE are many ways of classifying leaders. One way I find particularly useful to our current situation in the Philippines is based on a scheme developed by the American sociologist Amitai Etzioni. He differentiates leaders by the type of power they use and the kind of compliance they elicit from those they govern.

He says that leaders who rely mostly on coercive power to achieve their goals tend to develop alienative or resentful compliance among their followers. Leaders who primarily depend on remunerative power encourage calculative compliance. They do not get more than what they pay for. In contrast, leaders who deploy moral power are rewarded by normative compliance. A style of leadership breeds its own type of followers. The most enduring type of power, Etzioni says, is the moral one.

These are insights we can use to understand the leadership problems of our society.

The government of President Gloria Macapagal-Arroyo is not a coercive regime, but neither does it thrive on the moral commitment of its citizens. President Arroyo herself is neither authoritarian nor charismatic. Her style is that of a politician par excellence: she pays her way to power. As a result, the kind of compliance she gets from those she deals with tends to be calculative -- meaning, people stay with her only for as long as she is useful to them. They neither fear nor respect her. Her periodic resort to threatening talk, like her public display of religious piety, persuades no one. It only breeds antipathy and distrust.

In his book, "The New Golden Rule" (1996), Etzioni writes: "Clearly, no society can entirely rely on a single source of motivation to help sustain compliance with the dictates of the social order. Thus, totalitarian societies rely to some extent on incentives and attempts at persuasion; and libertarian societies rely to some extent on force. Similarly, communitarian societies cannot and do not rely only on normative means. They still pay their civil servants, command police forces, and so on. However, they rely on normative means much more extensively, and their members are much more committed to maintaining order and much less likely to seek to undermine it than members of other societies. In short, the order of good societies relies significantly more on the moral voice than do other types of society."

For the last couple of years, the anti-gun social activist Nandy Pacheco has had the same insight into the nature of power. He saw the brittleness of the changes instituted under coercion, and the superficiality of the discipline bred and enforced by martial law. Filipinos could not wait to return to the old ways as soon as the regime was dismantled. Edsa People Power 1 could have been the start of a new moral order, but its communitarian message was pre-empted by the reactivation of the obsolete culture of dependence and patronage. Edsa People Power 2 gave us another chance at national renewal; the moral voice against corruption and profligacy in government resounded loud and clear. But again, the energy could not be sustained. Today the country is back to where it was just before martial law.

It's not anger or hope that fills the air, however. It's exhaustion and indifference. Less and less Filipinos care to do anything to alter the course of things; they just want to escape. The Arroyo government survives not because of the active support of the citizens, but simply because the alternative is unthinkable. People think the next upheaval may not be as tame as the two Edsa People Power uprisings.

Pacheco himself says he would not be inveigled into joining another Edsa People Power uprising. Not because he is tired, but because he thinks such political upheavals in our national life have been made to substitute for the steady and painstaking work for a better society. The only way the country can avoid the violent cleansing that seems to loom ahead, he says, is by restoring the ethical dimension to our public life. And this cannot be done overnight.

Pacheco's preferred mode of intervention is the formation of a national political party founded on the ideology of the common good. He calls it "Ang Kapatiran" or the Alliance for the Common Good. Here are Kapatiran's 10 ethical principles: Belief in God, Respect for life and human dignity, Strengthening of the family, Community participation, Basic rights and responsibilities, Preferential option for the poor and the vulnerable, Dignity of work and rights of workers, Care for nature as God's creation, Peace and active nonviolence, Solidarity and commitment to the common good.

Kapatiran's primer begins thus: "People need to be informed that the absence of responsible and accountable political parties with specific policy objectives, issues and concerns that promote the common good has been a major contributory factor to the problems that we now face." How true! Our political life today is the way it is because it has failed to tap the single resource in which our society is rich-solidarity. The "moral voice of the community" of which Etzioni speaks is strong in our tradition. The kind of citizenship it forms is more enduring because it draws on existing value commitments. The commitment it elicits is superior because "it is voluntary, rather than bought or forced."

Up to now, our notion of political democracy has been modeled after the market, where loyalties are bought like commodities. Etzioni, the scholar, and Pacheco, the social activist, are telling us that it is time to re-affirm democracy as a value commitment to pursue the common good.

Wika

Wika


By Randy David
inq7.net



ON THE OCCASION of the Language Month, which is August, I received three invitations to speak on the politics of language. Because of other commitments I was unable to accept any of them. However, what I would have said at these symposia I have tried to synthesize in today's column which is written in Filipino. My thesis is that a nation's own language or languages grow in proportion to its consciousness of nationhood. They fade when the people's aspirations shift to modernity and participation in the larger world. Their decline is also an index of the marginalization of the masses in the nation's life.

Ang pag-unlad ng wika at ang pag-usbong ng kamalayan ay magkakabit. Pareho ang kanilang ugat-ang pangangailangang makipag-usap. Maliit na bahagi lang ng mga nangyayari sa atin sa araw-araw ang pumapasok sa ating kamalayan, ani Nietzsche, ang pilosopong pinagkunan ko ng mga kaisipang ito. Kung gaano katindi ang pangangailangang makipag-usap, ganoon din kalakas ang udyok na pagnilayan ang ating iniisip, dinarama, at ikinikilos. Ito ang bukal ng kamalayan. At kung gaano kapuno ang ating kamalayan, ganoon din kabigat ang hinihingi sa wikang ating ginagamit.

Habang lumalawak at lumalalim ang kamalayan, yumayaman din ang wikang ginagamit. Kung mababaw ang kamulatan, sapagkat hindi naging malakas at madalas ang udyok na makipag-usap, mananatili ring payak ang ginagamit na wika.

Tila ganito nga ang kapalarang sinapit ng ating mga katutubong wika. Naudlot ang pagsulong ng mga ito sapagkat sa kasalukuyang panahon hindi na ito ang ginagamit na daluyan ng pambansang huntahan. Noong panahon ng mga Kastila, ginamit ng mga prayle ang mga wikang ito bilang tagapaghatid ng mensahe ng kabanalan at pagka-masunurin. Kahit paano'y naisulat ito. Sumigla at lumakas ang ating mga katutubong wika nang magkamalay ang mga Pilipino at sinimulang gamitin ang mga ito bilang instrumento ng pagtutol at paghihimagsik, pagkakaisa at paglaya.

Natigil ang pag-unlad ng mga katutubong wika nang sakupin tayo ng mga Amerikano. Isinantabi nila ang ating mga wika at pinalaganap ang wikang Ingles sa mga paaralan. Naiwan ang ating mga katutubong wika sa bibig ng ating mga ninuno, ngunit ang henerasyon ng mga nangagsipag-aral na kabataan ay unti-unting nahiwalay sa pamayanan. Natutong mangusap at magsulat ang ating mga intelektwal sa isang wikang hindi nauunawaan ng mas malawak na pamayanan.

Ingles ang naging wika ng edukasyon, kapangyarihan, at modernong pamumuhay. Katutubong wika naman ang naging wika ng kamangmangan at ng makalumang pamumuhay. Nag-iiba lamang ang ganitong kalakaran kapag dumarating ang panahon ng pagtutol. Mula sa Katipunan hanggang sa Hukbalahap, mula sa Kabataang Makabayan hanggang sa NPA, sa lahat ng lansangan ng protesta, sumisigla ang mga katutubong wika bunga ng mayamang ugnayan ng mga katutubong intelektwal at masa.

Sapagkat mga kabataan ang nanguna sa muling pagsibol na ito ng wikang katutubo, pinakamalalim ang epekto nito sa kultura, laluna sa mga awitin at programa sa radio at telebisyon. Hanggang ngayon, patuloy nating inaani ang mga bunga ng pagyabong ng wika noong mga dekada ng protesta. Subalit sa ibang larangan, mapapansin na wari'y lubog na naman ang katutubong wika. Ang Ingles, ang wikang tinutulan ng henerasyon ng dekada setenta, ay ganap nang nakabawi, at ngayo'y lubos na namamayagpag sa halos lahat ng larangan ng kabuhayan at pamahalaan.

Kapag ang wikang katutubo ay nagagamit lamang kaugnay ng maliliit at walang halagang bagay, at ang wikang dayuhan ang nakakasanayang gamitin sa mas mataas na uri ng talastasan -- ang wikang katutubo'y nabubusabos habang ang dayuhang wika'y namumukod. Sa kalaunan, ang karamihan ay mag-iisip na sadyang nasa katutubong wika ang kakulangan. Kung walang nagpupunyaging isalin sa katutubong wika ang mahahalagang literatura at produktong intelektwal ng mga dayuhang kultura, iisipin ng marami na may likas na kakapusan ang ating sariling wika, at walang ibang lunas kundi pagsikaping pag-aralan ang wikang dayuhan.

Walang wikang umuunlad kung hindi ito naisusulat at nababasa. Walang wikang umuunlad kung ito'y hindi sinasanay na maglulan ng mga produkto ng kamalayan at iba't-ibang kaisipang hango sa maraming kultura. Kailangang makipag-usap ang ating katutubong wika sa mga wika ng ibang bansa, sa halip na isantabi ito, sa maling pag-aakalang hindi na ito angkop sa bagong panahon.

Ito'y bahagi pa rin ng paglaya, anang Palestinong manunulat na si Edward Said, bahagi pa rin ng pagnananais na muling maangkin ang nahiwalay na kaluluwa. Ang paghahabol sa katotohanan, ani Said, ang paghahanap ng kasaysayang mas angkop kaysa inaalay ng mananakop, ng bagong talaan ng mga bayani, mga alamat at relihiyon-itong lahat ang binibigyang-daan ng isang pambansang pananaw na muling umaangkin sa tinubuang lupa. Kaakibat ng mga ganitong makabansang pagpapahiwatig ang mahiwaga at kisapmatang pagsulong ng katutubong wika.

Huli na marahil para mangarap tayo ng isang pambansang pamunuang magtatampok sa katutubong wika bilang sagisag ng pagsasarili. Subalit hindi pa huli upang gumising tayo't magkusa-sa bawat maliit na larangang ating kinikilusan-na ipalutang sa himpapawid ang himig ng ating pambansang wika, nang walang pag-aatubili, pag-aalinlangan o pangingimi.

Hindi marahil sa isang language policy matatagpuan ang kinabukasan ng ating mga katutubong wika, kundi sa ating araw-araw na pagsasanay tungo sa isang demokratiko at nagsasariling bansa.

The Arroyo regime's nightmare

The Arroyo regime's nightmare


Updated 04:24am (Mla time) Dec 12, 2004
By Randy David
Inquirer News Service



Editor's Note: Published on page A15 of the December 11, 2004 issue of the Philippine Daily Inquirer


NEVER before has this conflict become as obvious as it has today -- the clash between the interests of the government's creditors and the interests of its own citizens. The 2005 proposed national budget says it all. Of the P907.8 billion total budget for next year, the biggest chunk of P301.7 billion (33 percent) will go to interest payments. That is more than the P289.2 billion total salary bill for the country's 1.4 million government personnel.

Principal amortization of the national debt is another matter. For 2005, the amount needed is P445 billion, or almost half of the budget. Mercifully, it's not part of the budget because the needed funds will be borrowed; otherwise total debt payments would take up 82 percent of the nation's budget. Of the remaining amount, P176.8 billion will go to local government units, P67.8 billion is set aside for maintenance and other operating expenses, and the princely sum of P72.1 billion is allotted to capital outlay.

This is the budget; where the money will come from is not yet certain at this point. Not one new tax measure aimed at raising additional revenue has been signed into law. Next year looms as another deficit year, and additional borrowings are inevitable. Our hope is that the interest on new borrowings will not be much higher than what is charged our more stable neighbors. This is the reason for the frantic efforts to persuade credit rating firms-like Moody's Investor Service, Fitch Ratings, and Standard & Poor's-not to downgrade the nation's credit standing.

To assure the creditors that the government would be able to pay all its obligations, President Macapagal-Arroyo affirmed the seriousness of the fiscal crisis in August and forthwith announced new tax measures. But to reassure the citizens that the burden will not be all that heavy, she declared in November that the crisis has passed. This is the desperate balancing act of a financially strapped government that is struggling to survive politically.

The conflict would not have arisen if the government had not been so dependent on borrowings. Moreover, it would not have become serious if people believe that the proceeds from all past debts had been properly used. The issue on both counts is the competence and integrity of the nation's leaders.

Independent economists have said that the country cannot expect to grow itself out of this debt hole. The hole has to be plugged first of all. We either pay up or we ask for debt relief. A request for debt relief is a confession of failure that signals danger all around. The only other option is to increase our ability to pay our debts. We have to stop the suicidal habit of borrowing just to finance interest payments. This means cutting costs and raising revenues, both of which are bound to hit the ordinary citizen in the form of reduced social services, higher utility costs, and higher taxes. How a regime that is still trying to legitimize its rule will allocate this pain is going to be a political nightmare.

Even as the government is trying to avoid the ripening of the fiscal crisis into an economic crisis, it is also worried that the clash of constituencies could develop into a full-blown class conflict. At this point, there is no way blood can be further squeezed from an impoverished population that is already reeling from the effects of joblessness, high prices, and natural calamities. The poor are not exactly in awe of the President or of the regime she represents. The middle classes have little flexibility left. They are also the most resentful of the costs of bad government.

It is not surprising that President Arroyo is unable to persuade her allies in Congress to pass the new tax measures and give up their pork barrel. They are answerable to their own constituencies as well as to their political patrons. But not a few are also convinced that the answer to the budget deficit is better tax collection rather than the imposition of new taxes. Rep. Herminio G. Teves, senior vice-chair of the House Committee on Ways and Means, has been a sensible voice in this debate.

There is a huge gap, he says, between potential tax collection and actual taxes paid. The figures Teves cites are astounding. The National Statistics Office shows a Philippine population of about 13 million families. Four million of these live below the poverty line, five million have no taxable income, and only four million have taxable income from which roughly P180 billion in taxes can be collected. The Bureau of Internal Revenue records paint a different picture. Instead of four million families with taxable income, less than 700,000 families actually paid their income tax in 2003. Of the P76.7 billion yield in income taxes, 87.8 percent was paid by workers and employees through automatically withheld taxes!

The situation in the corporate sector is worse. A total of 451,309 corporations are registered with the Securities and Exchange Commission, but only 113,145 firms have filed their corporate income tax, and of these only 10,833 actually paid taxes. The total yield from the corporations is only P100.8 billion.

Teves admonishes the well-off to pay their tax obligations in full. He argues for full transparency in tax payments so that the public may know if the lifestyle a person keeps is consistent with the taxes he pays. It all comes back to good governance and responsible citizenship. New taxes are a shortcut solution to what is basically a systemic problem. They promise not more revenue but only more evasion.

Fifteen reminders

Fifteen reminders


Updated 08:27am (Mla time) Jan 02, 2005
By Randy David
Inquirer News Service



Editor's Note: Published on page A13 of the January 2, 2005 issue of the Philippine Daily Inquirer


WHEN one approaches retirement, the desire to communicate life's lessons to one's children tends to grow in proportion to their own increasing wish to be left alone to design their own lives. I suppose it is as it should be, for the problems our children will face are not necessarily going to be the same as the ones we faced and tried to solve in our time. We cannot preach to them; we can only whisper reminders to them.

Sometime ago, while feeling thoughtful and sentimental, I compiled a list of reminders that I would like my children to keep as they make their way through life. I intended them as a sequel to an earlier piece I wrote on virtues for a new world. (PDI, 9/10/00) They are things I wish someone had whispered to me when I was young. Here, on the advent of a new year, I would like to share them, for whatever they are worth, with the many young people who read this column.

I have gleaned many of these from my own experiences as well as from a lifelong engagement with philosophy and sociology. None of them is original; I am sure others have expressed them before in more eloquent ways.

In the light of the tragic events that have marked the closing days of the past year-the large-scale deaths caused by the recent killer tsunamis that swept Asia, and the landslides that hit Quezon, Aurora and Nueva Ecija-these reflections may seem inward-looking and uncaring, but it is only because they are focused on a different type of concerns. The quest for private perfection need not clash with the demands of social solidarity.

They may also seem unrepentantly secular insofar as they make no reference to the supernatural, but I like to think they are not at odds with the spiritual. Here they are:

1. Though our lives may be limited by circumstances not chosen by us, we nevertheless make choices all the time. Doing nothing, letting events dictate our lives, is also a choice. Be mindful of the choices you make. Do not abandon your actions; answer for them.

2. It is necessary to look after our selves. Try to look good always so you don't add to the world's gloominess. But do not forget that you also have a duty to live well with others. Give cheer, offer solidarity. Never be the cause of another person's humiliation.

3. Take care of your body, listen to its needs. It works in powerful ways, but it is not infinite in its capacities.

4. We each have our goals, big and small. Our goals are a mirror of our values. Always be conscious of what your goals are, and what it takes to achieve them. Do not hesitate to review and revise them by going back to the context that gave rise to them.

5. Living is essentially problem-solving. The solutions that work are often formulated from new ways of looking and describing. Observe how others look at life. Read and expand your moral vocabulary. Re-describe your life.

6. To understand a thing, science says, is to measure it against a standard. It is also to comprehend the context from which it sprang, and to know its uses. But remember: not everything is worth knowing.

7. Everyone has values. We acquire these in the course of our lives. Make sure your values serve you well; treat them as your "personal defense and necessity." Once you've settled on your values, live by them relentlessly.

8. The main purpose of living is to turn yourself into a beautiful and strong human being, a worthy link in the chain of generations. Each one of us is given a chance to be an artist: our selves are our first raw material.

9. Too often we become the slave of habit. Take time to pause and be silent, so that you can hear the voice of the inner self that may be struggling to free itself from mindless and debilitating routine.

10. There is no sure-fire formula for achieving anything. Armed with knowledge, you may also draw strength from having a lot of hope.

11. Live without resentment and guilt.

12. Love unconditionally and without expectation.

13. Be mindful of the world around you, and learn from Nature.

14. See clearly and act with grace.

15. Face each day with cheer.

Happy New Year!