Let voters judge Mar on his tax-cut stand
During the Meet the Inquirer Multimedia Forum held last Nov. 25, Mar Roxas took pride in saying: “I am the only candidate with a track record of one who had actually done something to lower income taxes…” (“Mar nixes income tax cuts: Not now, in political heat,” Front Page, 11/26/15). He was referring to his having authored Republic Act No. 9504, exempting minimum wage earners from paying income tax.
Roxas also said all tax measures should be subject to review. He was perfectly right there! Indeed, had he only devoted a bit more time reviewing RA 9504 prior to its enactment, he would have surely discovered the law’s banes (alongside its boons) to minimum wage earners.
The current statutory minimum wage in the National Capital Region, for example, is P466 per day. Under a six-day workweek, P466 sums up to an annual gross income of P145,392 (P466 per day x 6 days per week x 52 weeks per year). Deductible therefrom are such tax exemptions as P50,000 for an unmarried individual and, for a married one, P50,000 plus P25,000 for each dependent child up to a maximum of four.
The present tax table puts the unmarried taxpayer under the tax bracket of P70,001-P140,000. The corresponding tax is P8,500 plus 20 percent of the excess over P70,000, which totals P13,578 total. Cheers to Roxas, the unmarried minimum wage earner has been exempt from that.
Meanwhile, for a married taxpayer with one or more dependents, the tax due ranges from almost nothing to absolutely nil. Fine! Apparently, Roxas realized as early as then that the tax table was no longer abreast with the times; and so, rather than adjust them directly to conform to inflation, he raised the exemptions to their present levels. Same effect, more or less; fine again! Except that one commonsensical question curiously comes to fore: If the minimum wage earner is the lowest-salaried taxpayer in our midst and times, shouldn’t he, for tax purposes, more equitably fall under the lowest income tax bracket in the tax table? I mean, definitely not in the middle—in fact, on the fourth level upwards in seven brackets! That, as I see it, is more or less what the tax-cut bill seeks to cure.
The monumental irony of RA 9504 does not end there. Assume that the unmarried taxpayer in our example has been given a measly P10-hike in daily wage by his employer, i.e., voluntarily or outside the “wage orders” periodically granted by the government. Technically, he ceases to be a minimum wage earner and is thus no longer tax-exempt because his pay is now more than P466 daily, in turn resulting in a P3,120-increase in his annual gross income (that is, P10 x 6 days per week x 52 weeks per year) or from P145,392 to P148,512. The latter amount, minus his P50,000 exemption, brings up his tax to P14,202—from which, repeat, he is no longer exempt! Can you imagine that? For earning an extra P3,120, he must suddenly shell out more than four times that much in income tax! More or less the same sad fate certainly awaits the married taxpayer with dependents for a slight increase in his daily wage sans the blessings of a government wage order. Alack, if this doesn’t kind of border on sheer stupidity, I do not know what does.
As things are, we can all agree that the proposed tax-cut measure has been studied relatively more objectively by its proponents. That Roxas still nixes it and keeps saying “not now!” clearly mirrors not so much his sincerity in saying the new legislation yet needs to be reviewed as his unconditional subservience to everything President Aquino wants. If so, then let the voters, nearly all of them income taxpayers, judge him along that light.
—RUDY L. CORONEL, rudycoronel [email protected]
