Here's a continuation of my debate with some statists in one of my discussion yahoogroups.
The main issue in government finance now, is the huge public debt, the endless budget deficit. Again, here are the figures, interest payment alone of the national govenment:
2005-2009, P287 B/year on average
2010, P278 B (projected)
2011, P357 B (projected)
What to do with those ever-expanding, ever-rising, debts, of living beyond one's means?
Why is the most convenient solution for many technocrats and analysists is "more taxes", or "raise existing taxes"?
Why not cut spending? Cut subsidies, cut bureaucracies, cut pork barrel, cut the number of govt employees and bureaucrats?
The most recent racket, funded by WB and ADB loans, is conditional cash transfer (CCT) for the poor. There were healthcare for the poor, housing for the poor, education for the poor, credit for the poor, agrarian reform for the poor, food subsidy for the poor, everything for the poor.
If almost all of them are failures because poverty still persists if not expanding, what makes the government technocrats and WB-ADB bureaucrats think they will succeed with CCT?
Why not simply promulgate the rule of law. Healthcare for the poor should really benefit the poor. Education for the poor should really benefit the poor, and so on.
If all of them are failures, why another program and racket for the poor?
I think this CCT will just be another racket and program for large-scale waste if not robbery. And what's next, DCCT, double conditional cash transfer? And then, TCCT, triple conditional cash transfer?
If there are lots of programs, subsidies and cash transfers if one is poor, some poor people would prefer to remain poor. If their income will rise, the various subsidies and cash transfers will stop as those programs and cash transfers are budgeted for many years, not one-time program.
And the budget deficit will keep expanding. And the public debt will keep rising. Up to about P4.4 (or 5?) trillion as of middle of this year. Easy to reach P5-6 trillion next year.
There is zero limit to more spending, more subsidies. There is zero limit to fiscal and personal irresponsibility.
And some institutions like the WB and ADB think, "No problem, you should save the poor, save the economy, save the planet, so have more debts with us!" That's why we have new debts with them like the CCT loans.
On the excise tax on gasoline, I am not in favor of raising it. In fact, that tax on gasoline products should be abolished. Excise taxes are slapped on so-called "public bads" like tobacco and alcoholic products. is gasoline a "public bad" and unnecesssary product? People who say so should ride bicycles and walk/commute more often.
If the DOF will raise the excise tax on alcohol and tobacco products, that I can support. People who don't want to pay more tax to the govt should quit smoking and drinking, or significantly cut their smoking and drinking, no big deal.
About the "over-worked" staff of DOF and its attached agencies like BIR and BOC, I think the problem is that they administer too many taxes. HK and Singapore have only 4 to 5 diff business taxes per year. Why does the Philippines have 47 different business taxes and fees per year?
HK and Singapore also charge only about 16 percent income tax rate (personal and corporate) vs the Philippines' 32 and 30 percent, respectively. In fact, supposedly capitalist Philippines has more businesses taxes than socialist China and socialist Vietnam. There are more socialists in Philippine legislature and exec branches?
Congress is a bunch of bleeding heart do-gooders and trying-hard socialists, spending other people's money, not theirs. And they do so because there is a big supply of people and voters who think that govt should provide this, subsidize that, tax there, regulate over there, etc. For these people, the solution to problems is more taxes and fees, like more taxes on hot money or portfolio investment.