As the country struggles to surmount the pandemic and lockdown-driven economic crisis, IBON stressed that the Duterte government’s insistence that it lacks funds for a bigger COVID-19 response does not hold water. Substantial revenues can be raised by taxing the country’s super-rich who can well afford to contribute much more to COVID-19 response and other needs, IBON said. This is aside from how the administration can realign funds from bloated infrastructure, military and police, and debt servicing items in the proposed 2022 budget, said the group.
The medical and economic response will become more expensive and people’s suffering greater the longer the government takes to act, IBON said. The government’s militaristic lockdowns and refusal to spend more for ayuda and supporting businesses and producers are behind the collapse in the economy and livelihoods. There are more poor and unemployed Filipinos. Many MSMEs closed down or are only able to operate partially. The health system is as weak as ever as cases climb; testing, tracing, isolation, treatment and vaccination lag; and our medical frontliners remain neglected.
IBON stressed that taxing the super-rich is an effective way to raise much-needed funds for expanding social and economic services while reducing inequality. The group estimates that the richest 1% of the population holds at least 40% of the country’s wealth.
At the very top are around 2,919 Filipino billionaires with some Php8.1 trillion in wealth. They comprise less than 0.003% of the population but hold 16% of the nation’s wealth. Taxing just these billionaires with a wealth tax of 1% on wealth over Php1 billion, 2% over Php2 billion and 3% over Php3 billion can raise some Php467.1 billion in revenue for the government’s social services, welfare and other programs.
The reported net worth of the 50 richest Filipinos increased even amid the pandemic to reach Php3.9 trillion or US$79 billion in 2021. A wealth tax on just them can raise up to Php224 billion in revenues.
Combined with realignments from non-essential infrastructure, defense and other items in the proposed 2022 national budget, this is more than enough to provide Php10,000 in emergency aid to 18.6 million households in distress (Php186 billion), Php101 billion for MSMEs as wage subsidy to support Php100/day wage increase for three months, and Php220 billion for agricultural support. The remainder can be used to hire additional health workers, for more aggressive testing and tracing, and to ensure free vaccination for all, IBON said.
The group added that the finance department rallying to protect the rich with its scare tactics isn’t surprising. The Duterte administration’s economic managers have for too long been more concerned about the wealth of a few than the plight of the many, IBON said. But collecting just a fraction of the huge wealth of the few is a step to redistributing wealth towards the working people who did so much to create it.
Among those who have called for a wealth tax since the pandemic hit are Nobel Prize in economics winner Joseph Stiglitz, the World Economic Forum (WEF), the International Monetary Fund (IMF), and Democratic senators in the United States.
A wealth tax also improves democracy in the country. If we want to change our politics, we also have to change the maldistribution of wealth that gives a handful too much power, concluded IBON.