Contemplating who to vote for in the coming elections? Here's my take on why you should consider Greco Belgica.
The councilor, one of the lesser known among the candidates, engages popular economist and UP professor Winnie Mongsod about the flat tax. On her second question, she emphasizes that a flat tax is against the poor and will lower government revenue according to researches and avoids the fact that Belgica already addressed this in his answer by citing Russia's growth in their tax base as an example. Aside from that, although it is a less popular position, there are also tons of research supporting lower taxes as a means for economic growth.
I don't understand why it is instantly assumed that lowering taxes will mean lower revenue for government and therefore less budget for the so-called pro-poor policies and projects of the government. It is assumed that the rich will pay less (when Belgica already reported how our complex tax code already gives exemptions to cronies and wealthy people).
The fact is, with our already fast-growing economy, a flat-tax will make investors flock to our country. Aside from attracting foreign investors who will create thousands of jobs, local entrepreneurs will also be empowered. The productive sector of the economy will also get to keep their income and invest and spend as they wish which also stimulates the economy naturally. Costs will go down, prices will drop, jobs will be created, and wages will be higher.
In the Index of Economic Freedom, the top countries including Hong Kong and Singapore have a significantly lower tax rate (and don't have many of the unnecessary taxes we have) and they have a very prosperous and peaceful society with significantly less poverty and unemployed. I've actually written about Singapore several times (see Eduardo Saverin Moves to Singapore and The Singapore Argument).
Beginning with Estonia in 1994, a growing number of nations have joined the flat tax club. There are now 17 jurisdictions that have some form of flat tax, and two more nations are about to join the club. As seen in Table 1, most of the new flat tax nations are former Soviet republics or former Soviet bloc nations, perhaps because people who suffered under communism are less susceptible to class-warfare rhetoric about "taxing the rich."
Ron Paul proposed a similar policy during his speech in CPAC:
Almost immediately, everyone will jump in on this bandwagon that lowering taxes will hurt the poor. Without thinking of the economic benefits as a whole, they assume education and healthcare will be hurt. When in fact, market-driven prosperity leads to easier access to education and healthcare. Instead of giving away welfare, we must remember the saying that giving a man fish will feed him for a day. We must give people opportunities to learn how to fish for themselves. A shirt my friend wore before said trade not aid.
Money must be taken away from bureaucrats and be given back to the people. This is a fiscal conservative position. This is sound economic policy. And not to mention that most of our taxes are wasted on corruption and bureaucracy.
It is easy for candidates to speak of increasing budgets for education or healthcare or subsidizing farms or housing or whatnot as of course this will be very attractive for voters. The reason that brave people like Belgica don't become so popular in the polls is because this economic policy he is advocating is not popular among voters. It is forward-thinking. It is like a bitter pill that we need to swallow. Yes, it will be difficult at first but it will be better for the long run.
Having a flat tax is actually far from the horrors of austerity or a bankrupt government portrayed by the populist view. In fact, those who are big on subsidies and government spending are the governments who usually go down (see Deficit Spending of Governments and Me).
It is easy for people to say that Greco Belgica won't win. I think being "unelectable" is a trigger word that should make you consider voting for someone. This concept of magaling nga pero di naman mananalo, sayang lang ang boto (he/she is good but won't win, it's a waste of your vote) propagates the trapo system.
Don't get me wrong, there's so many things I hate about Belgica's platform. In fact, I think his concept of small government is misconstrued as he seemingly wants to wage war on civil liberties. And speaking of war, I think his positions on readily going to war is ridiculous. I probably don't agree with him with anything else except for this flat tax. But this will add a new voice in Senate that will change the tone of discussion. He can add a new flavor to the bland and bitter mix of traditional politicians who will surely win.
And since I know it is impossible for me to urge you in joining me to not vote, I realized I might as well encourage the step in the right direction. Number 4: Belgica. Do it.
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