If House ways and means committee chair Rep. Joey Salceda would have his way, a new tax would be slapped on luxury watches, cars priced above ₱5-million, private planes, residential property above ₱100-million per unit, liquor costing above ₱20,000 per bottle, and leather goods above ₱50,000 per unit.
Also being considered for taxation are exclusive club memberships, jacuzzis, furs, all regatta equipment and antiques.
Salceda calls this the Louis Vuitton Tax and he explains that “basically, the aim is to find some way to tax the rich consistent with the constitutional principle of progressivity in taxation.”
If it becomes a law, the new tax would raise at least ₱12.4 billion at least from non-productive, non-essential and ostentatious displays of wealth.
Economist Sonny Africa of Ibon Foundation welcomed the idea only insofar as it reintroduced at the highest levels of Congress the idea of progressive taxation.
But for Africa, Salceda’s Louis Vuitton Tax is “far inferior to a billionaire wealth tax and is a disingenuous attempt to distract from the urgency and necessity of taxing the wealth of the country’s few billionaires.”
Ibon recommends a billionaire wealth tax to raise more than ₱468.8-billion annually from the country’s 2,945 billionaires who collectively have ₱8.2-trillion in wealth.
“This is a tax on not even one-third of one-thousandth of a percent (0.0026 percent) of the country’s population and will still leave them with ₱7.7-trillion,” said Ibon.
Global organizations have called for billionaire wealth taxes not solely to help governments raise revenues. Such a tax would address the gross income and wealth inequality, and provide much needed relief to people whose daily or lifelong efforts made the creation of such wealth possible.
This is something that’s important to our daily lives, especially the working families and even the lower middle class.
It would mean that resources could be made available for providing affordable housing and free health services to workers and their families. These essentials are not within the reach of the workers who are perpetually “endo” and are paid below the minimum wage, especially when these essentials are largely-privatized (read: for profit).
According to Ibon, revenues from the billionaire wealth tax could go to underfunded but essential public services such as education, health, housing, and social protection, including emergency cash assistance.
“It can also give support to micro, small and medium enterprises, which spur inclusive economic development,” Ibon adds.
Oxfam International is campaigning for billionaire wealth taxes across the globe: “While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires — a roaring ‘20s boom for the world’s richest.”
“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships — just the superyachts,” said Oxfam.
I’m not sure if Congressman Salceda was in Davos, but something happened there.
A group of 205 millionaires and billionaires called on world leaders and business titans to introduce billionaire wealth taxes.
In a letter titled “the cost of extreme wealth,” a group calling themselves “the patriotic millionaires” said: “The history of the last five decades is a story of wealth flowing nowhere but upwards. In the last few years, this trend has greatly accelerated …The solution is plain for all to see. You, our global representatives, have to tax us, the ultra rich, and you have to start now.”
“Tax the ultra rich and do it now. It’s simple, common-sense economics. It is an investment in our common good and a better future that we all deserve, and as millionaires we want to make that investment,” said the millionaires.
Over 200 First World millionaires signed the letter.
Now, if only we have Filipino billionaires who are as patriotic like them, and have Salceda heed their brilliant economic advice, maybe we could solve our own problems.