“While proposals for a wealth tax have been introduced in both houses of our Congress, the group suggests that legislators should undertake bold action towards progressive taxation”
Tax the rich, not the poor.
It’s a bold idea that I first heard from Walden Bello earlier this year, even before he decided to run for vice-president under the banner of the Laban ng Masa coalition.
Last month, we received via email a statement from the Asian People’s Movement on Debt and Development (APMDD) with the same call.
The group believes that as inequality and poverty grow in the Philippines, in Asia, and across the globe, so too does the call for a wealth tax.
They explain the nature of a wealth tax thus: “A wealth tax is a potent tool for equality and justice. A wealth tax is a tax on the market value of assets owned by an individual taxpayer rather than on his/her income.
“Taxable assets may include cash, bank deposits, shares, land, real property, cars, and furniture. By taxing the wealth of high net worth individuals and not just income, governments will be able to raise more domestic revenues for funding essential public services that are needed so urgently today.”
A wealth tax is “one of the most direct ways to stem inequality by reversing the highly regressive tax system that governments across Asia have long depended on to sustain basic public services.
“Regressive taxes such as Value Added Tax (VAT) and excise taxes have long been known to hit those with smaller incomes harder, and have thus helped to widen the gap between poor and rich, women and men, marginalized sectors and influential elites.”
The group asserts that while governments across Asia have relied on a combination of anti-people taxation and austerity measures that have reduced funding for public services every year. When public funds for healthcare, education, green infrastructure, and other basic public goods are needed to sustain the lives and livelihoods of billions, the continuation of regressive taxation and austerity is unacceptable.
Wealth inequality has risen to historic levels around the world within the past decade.
This trend has been encouraged by governments that have pursued neoliberal policies to accelerate growth on the simplistic assumption that the bigger the economic pie, the more people will benefit.
“The failure of this assumption has been made glaringly evident time and time again, most recently in the World Inequality Report 2022, where the richest 1 percent of individuals all across the globe have raked in a whopping 38 percent of the world’s total economic growth since the 1990s. In the same timeframe, the bottom 50 percent have received just 2 percent of economic growth. To call these crumbs is an insult.”
The APMDD believes that the COVID-19 pandemic has further widened the global economic divide.
“If governments across Asia and the world want to build back better from the pandemic, if they want to ensure sustainable development in the coming years, if they want to adapt to climate change, if they want to make good on their promises to their citizens, then they must end their dogged dependence on neoliberal austerity and regressive taxation.”
While proposals for a wealth tax have been introduced in both houses of our Congress, the group suggests that legislators should undertake bold action towards progressive taxation, and heed people’s demands to ensure that revenues collected will be used to fund crucial public services, such as health and education services as well as social protection for the poorest sections of society.
Wealth taxes can be “vital policy instruments for economic and social recovery from COVID-19” and “a test of governments’ political will and capacity to reduce social inequality and realize socio-economic justice.”
There are concrete benefits from the imposition of a wealth tax.
One, it will help governments raise more domestic revenues to fund public services, and make health and education more accessible and available for all, and ease the tax burdens that fall most heavily on marginalized sectors.
Two, it will help curb inequalities by sharply taxing the wealth of the very rich and help curb the continuing amassing of wealth, profits and power in the hands of an elite minority at the expense of the majority.
Three, it will help generate public finances so urgently needed for a just, inclusive, transformative and sustainable people’s recovery.
And four, it will help build stronger, resilient, sustainable economies away from aid and debt-dependence.
By adopting progressive tax policies such as a wealth tax and fixing the fundamental flaws in national and global tax systems that are currently marked by elite biases, national governments and the international community will be in a better position to reduce inequalities and fulfill their sustainable development commitments and human rights obligations.
The institution of a wealth tax is a major part of the broader call for tax and fiscal justice, and the goal to “make taxes work for people and the planet.”
It is only fair and practical for the burden of working households and of small-to-medium enterprises—of those who have suffered the most under the pandemic—be lifted, and that the wealthiest individuals and corporations who have profited immensely during the pandemic and even before then should contribute their fair share to the wellbeing of the whole of society.
All this makes sense, from where we sit, but will the ruling elites in the Philippines and other countries who hold the reins of political and economic power even listen?