Random Spiel, It's the Middle Class that Pays More

They can hound money from the middle class because this class doesn't usually have the legal and accounting resources to reduce taxes unlike the rich. It's all fair game until you realize it was never fair. If the rich can have the means to hide their taxable wealth, the middle class and aspiring middle class doesn't because they have no wealth to hide but they still end up paying more relative to what they make.

Aspiring middle class and middle class have more budget allocated to essential goods and services which have value added tax (VAT) on them. That piece of toilet paper has VAT in it and pretty much almost anything has VAT in it. These people spend money on essential goods and services because they need it to live and majority of their budget is for this. On the other hand, the rich have more room to squander their money on luxury goods. If the aspiring middle class is given more income, they will likely allocate it to paying off debts, save, or purchase small luxuries. If the middle class is given more income, they do all the stuff the aspiring middle class does and buy assets.

In the ideal world, aspiring middle class would have not opted to spend anything on luxuries and priorities ridding themselves of debt and save the extra money. But what really happens is people would prioritize small luxuries under this class because human irrationality is at work and people need to feel moments that they are living and not surviving in the moment. To say that people living in this class are lazy and irrational screams ignorance because the reasons are multifactorial and there are systems in place to keep people struggling to make ends meet. If anyone is family with the term Poverty Trap, you may find that there are mechanisms in place that prevent upward mobility, and these mechanisms also haunt the middle class especially the health trap where one is just one hospital admission away to become an aspiring middle class or living below poverty line.

The Philippines suffers from a deficit in fiscal budget that it's spends more than what it gains from tax collection. I don't think the reason that the middle class and below are not taxed enough holds a candle when it's the majority of the population that are the most taxed relative to what they earn. There have been exceptions from the Tax Reform for Acceleration and Inclusion [TRAIN] Law that exempts people with less than 250,000 PHP annual income from being taxed but this only puts the burden more on the high income earners to fund government projects. I consider the setup fair considering there's no point in kicking the lower middle class further if they already have VAT to pay for their share. What sucks about this system is that on paper it's supposed to be equal but the rich can be more equal. The rich don't spend as much of their budget in essential goods and service relative to what they make, instead they allocate that money to buying more assets and luxury.

If you tax 1% from someone that has a net worth of 10 billion, you'll get 10,000,000. And they'll still have more than enough to live by for the next 365 days. It may not even be 10 million because accountants would find a way to reduce it further. Now compare it to someone that earns 500,000 a year with a 35% tax (for simplicity's sake because this is the highest value for personal income tax in PH), they take home 325,000. How much of that amount goes to mortgage, essential goods and services, insurance, and unanticipated expenses, savings throughout the year while still trying to afford luxuries that remind people they work to live and not to survive? I based this in proportion to what one makes.

I'm not promoting hate for the wealthy here, but I'm advocating a means to address the growing inequality in society. How can there be a mechanism take money off the poor and the government to give it to the rich while there are no mechanisms to do the opposite of that? if the pandemic has made everyone suffer economically, then how come the top richest names in the Philippines grew in wealth while the rest are still struggling to recover? You can flash me the GDP numbers and I'll have another shitpost in mind why I can't be assed to care about it as much as I initially thought it should. When governments were subsidizing people's salaries because they could'nt work, people were using their salaries to pay for the essential goods, services, rent, and debt owed to the rich. I think the slogan right now is for people to work really hard so that the government gets their fiscal budget on the positive side through taxes and then pay off what they owe the rich.

Thank you for your time.