One strong statement a president can make is to declare there will be no increase in taxes. United States President George H. W. Bush did it in 1988 with his iconic line, “Read my lips: no new taxes.”
Bush won based on that promise but he later had to break it as he eventually increased taxes. Other politicians such as United Kingdom Prime Minister Boris Johnson used the “Read my lips” line to win in 2019 and political wannabes know that such a promise will bring in the votes.
Here’s Bush’s full statement in 1988: “And I’m the one who will not raise taxes. My opponent now says he’ll raise them as a last resort, or a third resort. But when a politician talks like that, you know that’s one resort he’ll be checking into. My opponent won’t rule out raising taxes. But I will. And Congress will push me to raise taxes and I’ll say no. And they’ll push, and I’ll say no, and they’ll push again, and I’ll say to them, Read my lips: no new taxes.”
That will not be the case in the Philippines as President-elect Ferdinand Marcos Jr. is likely to raise taxes. Although Marcos never said during the campaign that he will not raise taxes, now as president-elect he said he will study the Department of Finance (DOF) recommendation to impose an additional burden on taxpayers.
The DOF had said that if tax rates were not increased, the country will be unable to cover the budget deficit while spending more on healthcare, pandemic response, education, and infrastructure.
Finance Secretary Carlos G. Dominguez III had said the government needs to raise P249 billion every year in revenues or the country resorts to more borrowings. The Philippine debt is now at a record P12.68 trillion. Marcos said he will be “careful” in assessing any new tax imposition. His incoming Finance secretary, Benjamin Diokno, also said there should be an improvement in tax administration and collection instead of tax increases.
Before the incoming administration decides on any tax action, it will have to explain why raising revenue by imposing an added burden on taxpayers is the only option. It will have to show what alternatives were considered, what actions were made to increase collection, especially of tax payments already ordered by the court, and what it is doing to stop corruption.
Marcos’s unpaid estate tax estimated at P203 billion was a question raised during the campaign period and it continues to haunt him, especially with his incoming administration’s plan to increase taxes. He will have to continue to answer this.
Filipinos who need to be clarified on the tax issue may come up with a version, from their point of view this time, of the “Read my lips” line followed by a demand for an explanation why there is no other option but to raise taxes and on whatever happened to the court-ordered estate tax payment.