Friday , May 25, 2018

Velez: TRAIN may save your health but not your pockets

A FRIEND asked me a favor. “Can you write about why Coke is expensive now?”

Seriously? I asked. Yes. The Coke Litro she drinks everyday now costs 35 pesos after the announcement that the new tax reform is implemented now.

“But why my Coke? It’s the thing that makes me happy from a hard day’s work.”

And it is not just Coke that is affected by the price hike as a result of the Tax Reform Acceleration Initiatives (TRAIN). The other happy stuff for PInoys, from yosi, unli-soda in S&R, beer, even the tinapa and bangus in the market have seen their prices doubled. Not even the trade secretary’s inspection could check the million stores all over the country for jacking up the prices.

I offered my friend an optimistic view. Maybe it’s time to switch to healthy living this 2018.

Healthy living, my friend imagines a diet of veggies and organic stuff. That is expensive, she said.

Yeah, I said, try getting hospitalized for diabetes or high blood or getting dialysis for kidney failure, now which is really cheaper.

This tax reform raises questions and debates about whether it is anti-poor or pro-poor. But one thing we have to ask is whether the effects of TRAIN such as inflation would help us think of a better diet.

It raises a question on why healthy foods are prohibitive or highly priced. And why are junk foods cheap and easily accessible? I see school children run to the nearest 7-Eleven for a Soda and a bag of chips. No one among the youth is even eating corn or binignit or anything green.

That raises other questions, yes, our take home pay may be higher with tax exemptions. But with excise taxes on gasoline and its effect on basic commodities, is there still enough for a take-home pay to spend for food and other needs?

In his critique on TRAIN, economics professor Harvey Niere of MSU-Marawi puts it in practical terms: the poor spends 90% of their meager income (that’s about 300 to 390 pesos a day in Mindanao) on basic commodities such as food and commuting to work or school, compared to the rich who get double digit monthly salaries and spend only 30% of this on these things.

Niere is right on point that TRAIN violates the Fairness Principle, in which those who have higher income should contribute more of their income through taxes, which could be done by progressive or direct taxation, and thus bring equity in the imbalance of income distribution.

However, we have indirect taxation through TRAIN, which also comes in the form of paying excise taxes of 2.50 pesos in fuel this year and 4.50 in 2019. The excise tax affects prices of commodities and production and so how much savings is left for manong driver, aling baker and workers? Safety nets only come to the tune of 200 pesos cash transfer a month for 10 million families. Saan aabot ang 200 pesos mo in a month?

To think of it, the poor are burdened many times over – by taxes and low wages and high prices of commodities. Why are we made again to suffer, while the oligarchs continue to earn much? IBON Foundation says there is a potential P409 billion not being collected in corporate income tax, and the total combined wealth of 40 oligarchs is around P 3.7 billion. That amount is enough to help build schools and hospitals.

For a government that says change, the only change we see is disappearing from our pockets. So much for Build, Build, Build through TRAIN. My friend can’t take Coke with her for this ride.