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Business

Wealth tax to aid in labor force recovery

Louise Maureen Simeon - The Philippine Star

MANILA, Philippines — The proposal to impose taxes on the extremely wealthy percentage of the population could help the country’s labor force recover as the working class continues to bear the brunt of losses every time the government decides to curb mobility.

Socialist labor group Bukluran ng Manggagawang Pilipino (BMP) has called on lawmakers anew to revisit their proposal for a two-pronged wealth tax to fund a state-driven recovery program.

The pandemic has been impacting the labor market, with job losses last year reaching a record high. And while the latest unemployment rate has plateaued at 7.7 percent, more Filipinos are still looking for extra income as job quality declines.

And with the third round of lockdown, the government has estimated that 600,000 workers would be further affected.

BMP chairman Leody de Guzman argued that the government’s market-driven national recovery plan relies on strengthening businesses to provide employment to people rather than the state proactively creating jobs.

“This approach is guided by the same austerity and trickle-down economics that has been rebutted by concrete realities. It relies on the fairy tale that employers are in the business to provide jobs,” De Guzman said.

“Capitalists don’t go into business just to provide jobs, they do it to earn profit,” he said.

To address the current labor woes, BMP is pushing for a workers recovery based on a state program of employment guarantee, subsidies to small and micro enterprises, a new system for universal basic income, and aggressive investment in public health infrastructure.

As to what will fund all these, BMP believes a wealth tax can be the answer.

Of the two-pronged proposal, BMP said the first can be a one-time corrective wealth levy on the top 50 families as of 2019 at 25 percent of their 2019 net worth, which alone can yield up to P1 trillion.

The second type is a continuing annual levy on large financial accounts, which would amount to billions of pesos.

“Why not get it from the billionaires who got even richer during this pandemic? A wealth tax on them to fund a just and sufficient national recovery program is a viable alternative to hundreds of billions of dollars in unsustainable loans and regressive taxation which only burden the primary wealth producers of the world, our workers,” De Guzman said.

“A one-time levy can be considered as an emergency measure that lets the richest oligarchs in the country share in the burden of reviving an economy destroyed by the pandemic,” he said.

The labor group maintained that such wealth taxes would hardly make a dent on the billionaires.

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