The House Of Puroy Enterprises

The math seems good… the theory that is. But would Juan dela Cruz really benefit from a higher tax rate?

Increasing the VAT from 12 percent to 15 percent and decreasing the corporate tax from 30 percent to 25 percent, while giving fixed wage earners 3% tax credit from their income is what former budget secretary Benjamin Diokno calls as “rewarding hard work and penalizing too much consumption.”

Let’s see, let’s say I worked hard and I earn - overtime pay, salaries, commissions, etc. I will benefit from the tax credit. But I would avoid the 15 percent VAT, which will definitely be passed on by traders to consumers, if I don’t consume… err, I don’t buy.

Diokno, together with his fellow economists from the University of the Philippines Schoold of Economics Dante Canlas and Felipe made the proposal for higher tax rates and warned that revenue shortfalls and slowing economic growth could re-ignite fiscal woes that could force the next government to cut spending for infrastructure projects and social services.

We can all flood the simple mind of Juan dela Cruz with economic rhetoric and other technical stuffs. But at the end of the day, he only sees corrupt government officials pocketing every penny they can lay their hands on, with only so little amount, if ever there are any being trickled down to him.

Math is good… if only they could be “honestly” applied in real life.