Tax Cut 16: Conserving Fishery Resources by Taxing Demersal Fish Catch?

In late April this year, I have a short discourse with two fellow UPSE alumni in our discussion ygroups regarding fishery conservation. A friend who works at the Bureau of Fisheries and Aquatic Resources (BFAR) wrote,

There are however some cases where government needs to come in such as  in cases of environmental protection. Where there are no controls put in place, people tend to harvest natural resources without thinking about the future, environment, and the like. 

 This is the case in fisheries where we need to put in place time and spatial closures to ensure that the fish stock as provided an opportunity to spawn and regenerate succeeding young ones, where we put in capacity limits to ensure that we do not over harvest and gear restrictions so that we do not catch non-target species. In order to do that, we put in a police force, so to speak, to ensure compliance. Hence, we need a monitoring, control and surveillance systems to ensure compliance. 

 That costs money but what price do you put on the loss of species, especially those that we usually harvest for food.  In this case, markets are altered due to government regulations. Without it, we might end up in a situation where the sardines were lost in the case of one North American country in their Pacific coast.

I replied that the main reason why many fish varieties in the ocean remain in abundant supply is because of market solution to higher market demand for more fish, via aquaculture and fish farming. Lots and lots of tilapia farms, bangus farms, shellfish farms, crabs, lobster, shrimps, prawn farms, even lapu-lapu farms, has supplied humanity, the Filipinos in particular, with more fish. So the pressure to catch more fish in the open sea is not that high.

I read a news where BFAR wants to declare a "close season" for several months for galunggong catch, to allow the popular galunggong to expand further. That of course, is one solution but its full implementation will be low. Will BFAR send hundreds of inspectors to check the fish catch of each fishing boat coming from the sea? That's highly unlikely. So what will happen is that many may comply but a few will still catch galunggong non-stop.

One solution is to allow more fish farming of various species; galunggong, maya-maya, lapu-lapu,  etc. This will greatly expand fish supply of certain species without the fishermen going far out in the sea. I read that the Israelis have modern tech in fish farming, they can grow various species even in desert-like conditions.

Then my perennial friendly co-debater in the UPSE alumni ygroups, Mike Alunan, suggested the following.

We are  only  starting to  develop  aquaculture  and mariculture  fishing  systems,  which  include  sea  ranching, sea farming,  floating  cage fish production,  etc.
But  you  may  possibly  tax  demersal  fish  like  lapu-lapu, as it  penalizes  the wealthier  consumers,  who  can  afford anyway...

tax  specific  fish  catch  as  they  are  unloaded  on fishports  or  at  fish markets.  There   are  basically  two types  of  fish:  1)  “Demersal  fish,”  like  “Lapu-Lapu” which  are  more  expensive and  caught  near shores  mostly  by  small  fishermen;   2)  “Pelagic  Fish”  or  those  “schools  of  fish” like  galung-gong  that  are  caught by  deep-sea fish operators. 

 In short,  the  fish  eaten  by  the  poor  like  galunggong  are caught  by  the  richer  fish operators,  while  the more  expensive fish  like  “Lapu-lapu”  are  caught  normally  by small  fishermen,  whose  numbers  and operations  in  near shore  fish sanctuaries  are putting  pressures  on fishery  resources. It  is  more  likely  that  the small to  medium  fishermen  are  the  ones  involved in  illegal fishing methods  like  dynamite  fishing  that  damage  coral  reefs  and  fish sanctuaries. 

 Taxes  may  not  be  slapped  on  galunggong so  as to keep down  prices  of  cheaper  fish bought and  consumed  by  the   poor. But  you  may  possibly  tax  demersal  fish  like  lapu-lapu, as it  penalizes  the wealthier  consumers,  who  can  afford  anyway.  If  it increases  prices  of  lapu-lapu further,  it  is  alright  as  the  poor  is  not  affected  anyway  as  they  do not  really  buy  this  type  of  fish. But  for  the  wealthier  consumers, they  may  not  care  much  about  the  price  as  they  are  even  willing  to pay  premium  prices  and dine  at  high-end  fine-dining  restaurants.

Fishery  Resource  Exploitation  Excise  (FREE)  tax,  which  will  be   a  fee  which means  it  is  not   really   free  ironically.  Being  a  tax,  Nonoy  may  likely  oppose  this  again. 

 This taxation  system  on fishery  resources will in the  end  be  a  “market-oriented” fiscal policy to regulate this  resource  through a  pricing  system  that  is  induced  by  a  proposed  taxation  system,  that  is  also  intended  to generate  the  necessary  fund  to bankroll  credit  for  ice  cold  storage facilities,  dryers  and  other  processing  equipment  for fishing  communities.

I replied to Mike arguing that those aquaculture and mariculture are free market solutions to previous market failures of insufficient supply of certain fish species (tilapia, bangus, shrimps, prawns, grouper/lapu lapu, sea cucumber, crabs, sea lobster, etc.). Government regulation here should be limited to enforcing private property rights, say between conflicting claims of land ownership among people or for some environmental concerns. Certain market problems or market failures have market solutions, sooner or later.

But his proposal to slap a tax on demersal fish like lapu lapu that are consumed more by the wealthy peoople is terribly wrong. For the following reasons.

One, extending this politics of envy, government should also tax blue marlin,  tanguige, prawns (at P600+ per kilo), lobster, crabs, many other expensive marine products.

Two, more taxes means more bribery and more corruption. Either the fish farmers or fish restaurants will bribe the BFAR or LGUs or police or Coast Guard or BIR people who will assess and/or collect  the tax.

Three, if we assume that all these government personnel have suddenly become saints and will not accept bribes, then government -- through all those agencies mentioned -- will hire more personnel, to assess and collect the tax, or oversee the frontline tax collectors to control corruption. Which means to expand the bureaucracy further to the nth level.

Four, lapu lapu, crabs, etc. that are raised via fish farming should be taxed as well. Because if they don't, then lapu lapu caught from the open sea will only be temporarily transferred say for one day, in those lapu lapu cages, and be harvested the next day at zero tax. This further raises the cost of harvesting these fishery products and wastes labor, even if taxes were not collected.

And five, the politics of envy is wrong. Being rich and wealthy is demonized as evil; hence, they should pay more tax, they should be "penalized" more, they are bloodsucking evil anyway. People should be contented being poor or lower middle class. They will not be penalized, they will even get more subsidies, endless and no timetable subsidies.

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See also:
Tax Cut 12: Removing Taxes on Foreign Airlines, April 02, 2012
Tax Cut 13: Remove the Excise Tax on Oil Products, July 04, 2012 
Tax Cut 14: APTU Meeting in Bangkok, March 1-2, January 22, 2013 
Tax Cut 15: Some Resistance to Reducing Personal Income Tax, May 04, 2013

Pol Ideology 40: On Social Darwinism

Late last month, I have a debate with a friend and fellow UPSE alumni, Mike Alunan, about markets and regulation. Among his arguments, below.

“Survival  of  the fittest” thinking  is inhuman? Human beings  are  not  like  animals  as  they have  the  capacity  to  surpass the  limits  of  nature by doing  more  than  simply  adapting  to  nature  as most animals  do---but they have the capacity  to  even conquer  nature  through  their  creativity  that leads  to  science  and technology. 

 And if we believe that  Darwin’s  dictum  of  “survival  of  the  fittest”  also  applies  to  human  beings,  then  we  have reduced  ourselves  to  the  level  of  the  beasts, which  only  survive  for  the  present  and even  devour their off-springs only  to survive for  the  day.  Darwinism  is  a  kind  of  free  market  competition  for  survival  among  beasts  fighting in  the  wild  jungles. 

Social Darwinism basically  justifies  also  the  free  market  competition  of  man vs. man  as  a perceived  normal order of things that  escalates, at  times,   into  their  worst situations like  wars, similar  to  the  Peloponnesian  Wars  among  the  ancient Greeks  that led  to  the  downfall  of  Athens and the  Greek  civilization….

I told him that his arguments are terribly wrong, in both economics and natural science aspects. The Darwinian definition of "survival of the fittest" does not mean only the ability to eat and eat to survive. It is also the ability to evade predators and "murderers" in the natural world. That is how animals "chose" their skin colors and textures to look like their natural environment so that they cannot easily be detected by their would-be food or would-be murderers. So chameleon, monitor lizards, butterflies, birds, etc. have skin or feather colors that look somehow similar to their natural environment.

In the economics aspect, there is nothing, zero, nada, in free market philosophy that people should harm other people -- eat them, butcher them, stab them, etc. just to survive and prosper. Free market and free individuals simply mean that people are free to do what they like. They can over-work or underwork, over-sleep or under-sleep, over-sit and over-eat or go on a hunger strike, over-drink and over-smoke or avoid these temptations, over-sex, what have you. So long as people harm no one. Be as fat as a pig, no problem. Be as rich as Henry Sy or Zuckerberg, no problem. Be as drunkard as Erap, no problem. People are free to be industrious or lazy, to be responsible or irresponsible, to be efficient or lousy. That is free market and free individuals. 

When government comes it, it usually distorts this freedom of individuals. Thus, even those who wish to meet their creator early by over-eating or over-drinking and over-smoking and become sickly later, are prevented by government from doing so. Government over-taxes you and me, those who take care of their body more responsibly and work hard, so that government will have more money so it can subsidize the healthcare and prolong the life of these people, on top of hiring too many government personnel to do endless subsidies. This is not cool, it is simply irrational.

His words that "Social Darwinism basically justifies  the free market competition of man vs. man... that  escalates, at  times, into  their  worst situations  like  wars..."  is of course, wrong.

ALL big wars, no, zero, nada exception, are instigated and initiated by governments, or armed/rebel elements wanting to overthrow an existing government so that they will be the new government. Free market means freedom to exchange, voluntary exchange. I sell you tomatoes and onions, you do not like my products' quality, or you may like them but you do not like my price, you walk away and look for another seller of tomatoes and onions. I did not nor will I ever put a gun on your head so that you buy my tomatoes whether you like it or not. Zero war, zero coercion, nothing.

In government, I give you the lousiest policeman or a stupid teacher or a terribly corrupt but shrewd Mayor, you have to pay for them, by hook or by hook. There is threat of prison and political harassment, so that you pay various taxes, fees, fines and mandatory contributions,  whether you like it or not, to pay for these thick army of politicians and bureaucrats. Expand this coercion to a national and international scale, and you have wars, bombings, destruction. The more armed government wants to impose its will and biases on other people or governments.

Mike also complained that "The problem with Nonoy’s free market extremism is that he labels  everyone not agreeing with his brand of free market and minimalist government as statists and socialists. Isn’t labelling and stereo-typing by itself a form of statism, being devoid of dynamism." 

This is wrong. There are other proposals or advocacy that are more extremist than mine. Like the anarchists -- they want zero, nada, authority and government. Even the protection of private property rights should not be given to government. I am a "minarchist" and respects that there is role for government. I believe in big government -- only in promulgating the rule of law and protecting people's right to peaceful life. Thus, armed and organized criminals and robbers, armed rapists and murderers, armed and organized land grabbers and carnappers, should be met by a bigger armed government plus a credible justice system.

I label "statists and socialists" those who are explicit in begging for "more state intervention please, more forced collectivism please." People want to forcibly collectivize education, healthcare, housing, pension, etc. -- by collectivizing also your own income, your own savings and investments. The role for personal and parental responsibility is blurred and negated if not corrupted, by more government responsibility. And this results in often lazy thinking. Edukasyon sa mahirap at di mahirap (ala UP), gobyerno. Medicines sa mahirap at di mahirap, gobyerno. Tractors sa mahirap at di mahirap, gobyerno. Condoms and pills sa mahirap, gobyerno. Do not ask why some people are poor, do not dig for laziness and personal irresponsibility, just close your eyes, for any problem of the poor, there is only one solution -- gobyerno. This is lousy and lazy thinking. And people complain when they are called as statists and socialists.

There was no follow up from Mike after that.

To follow was our debate on his proposal to impose a fishery taxation...

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See also:
Pol. Ideology 36: On Capitalism, Akbayan, Drugs Legalization and Toqueville, October 10, 2012
Pol. Ideology 37: Collectivism, Conservatism and Liberalism, October 12, 2012 
Pol. Ideology 38: Branding Via Clans, Not Philosophy, April 05, 2013 
Pol. Ideology 39: Thatcherism, April 10, 2013

Population Control 7: I am Supporting the RH bill

Yes, I am supporting the government-sponsored population control measure aka the Reproductive Health (RH) bill. PROVIDED that government will also cut or discontinue some of its existing but ineffective social programs.

As of July 2011, there were an estimated 37.11 million employed Filipinos. We assume that all of them are taxpayers, directly or indirectly. This year, interest payment alone (principal amortization not included) of the national government will be P357 billion. This means that each employed person in this country would fork out something like P9,622 of taxes for interest payment alone this year. Then they have to fork out more taxes to sustain the millions of bureaucracies from the local to national government agencies, up to the multilateral and foreign aid bodies like the UN, WB and ADB who all live off on tax money.

I read that with or without the RH bill, the DOH has already alloted some P7 billion for reproductive health-related spending. People are liabilities, the government and the RH bill supporters say, so their number should be reduced by giving couples various "options and choices" to plan their household size. Never mind the taxpayers including those who have no kids, they have no choice whether to support or opt out of these new spending.

Meanwhile, a friend in facebook posted something like this after Pacquiao's split decision victory over Marquez two weeks ago:

Manny Pacquiao, you now believe in "MAJORITY DECISION." Perhaps you know now the statement from the Social Weather Stations (SWS) survey this year, "that 73% of Filipinos want to get information on all legal methods of family planning (FP) from the government and that 68% wants the government to fund all means of family planning." That's majority decision.

And I replied to him, :And if you ask also the people, 'Do you want subsidized or free healthcare and housing, subsidized or free train ride and jeepney fare, subsidized or free cell phones and electricity, subsidized or free farm tractor and fishing boats, etc., government will fully fund those subsidies?', I think 90-100% of them will say Yes. Majority decision too."

Below are some data from Dr. Jop Yap of PIDS. This is part of his paper delivered during the Philippine Economic Society (PES) conference a few weeks ago. I thanked Jop for sharing with me his data.

See the low working age / dependents ratio in Singapore, Thailand, China and Korea? This should be directly or indirectly related to their past population control policies. Soon, their oldies will be needing robots and migrant workers to take care of them as the number of their young population is small in relation to the oldies.