Tax Reform?

Mar is open to tax reform:

“Are we open to reducing income taxes, the answer is always yes. It always is yes because we don’t look at that money as government money. This is the people’s money.”

Mar has a track record of lowering taxes. Below are newspaper clippings from the Manila Times in 2008:

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As a senator, he was the principal author of the law exempting minimum wage earners from income tax. In his words:

I’m the only guy that actually passed a law to cut taxes. When you elected me as senator in 2004, the law that enables minimum wage earners not to pay tax now, was sponsored and written by yours truly. All these others [Presidentiables] are ‘wish ko lang.’

In 2009, when oil reached more than $80 a barrel, I was the foremost proponent of slashing VAT on oil.

For the record, there is no question that I am for lowering taxes. I am a liberal not just in name but in ideology; meaning, I believe in maximizing freedoms — lower taxes equate to more economic freedom. Whoever earns the money should be the first one to benefit from it.

However, Mar is not open to discussing tax reform in the middle of an election season since this requires a very sober, non-populist discussion.

So if the question is, are we open to it? Yes, but that’s what I think is the difference between serious people who are in government and those who have no responsibility, and simply say, yeah let’s do this, let’s do that. I think it’s incumbent upon the government to study very, very closely [as] any reduction in income tax will lead to reduction in service. [4Ps, roads, schools, airports, military upgrade, etc.]

Any reduction in income tax will lead to reassessment of the investment grade ranking of the country. If that investment grade ranking is in peril, then the interest cost of the government changes, increases. And since all of your interest costs are pegged to the T-bill rate or the T-note rate of government, that affects interest costs, capital expenditure costs of the entire economy, of the entire business sector.

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