April 30th, 2021
Salceda pushes for universal basic income (UBI) in Bayanihan 3; House tax chief says COVID-19 crisis ‘time for big structural changes,’ wealth taxes on the superrich
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that the concept of a universal basic income (UBI) is gaining following in Congress as the third Bayanihan package was approved jointly by the Committees on Economic Affairs and Social Services, subject to the comments of the Appropriations and Ways and Means Committees.
Salceda, who is 2nd vice chair of the Appropriations panel, says that Bayanihan 3 is an opportunity to experiment with UBI, as a “K-shaped recovery” threatens to happen once economic activity normalizes.
“COVID-19 was a jobs killer. It killed many small businesses. While Filipinos resorted to microentrepreneurship, mostly via online selling and the informal sector, these are not sustainable income flows. Meanwhile, the wealthiest segments of the population were able to buy assets on the cheap. As the economy recovers, they will only get richer,” Salceda said.
“If Bayanihan 3 succeeds in lifting people out of dire misery due to COVID, we should explore using its UBI component more,” Salceda added.
The proposed package contains a P1,000 relief grant for every Filipino, in two tranches.
“As early as March 2020, this was already my proposal to the government. You will remember that I released an extensive paper on the subject. If your household has more mouths to feed, you should have more relief. The cap per household under the Social Amelioration Program was skewed against poorer households that tended to have more household members,” Salceda explained.
“I think we will be able to approve this on plenary as soon as session resumes. In the meantime, we will be talking with the Secretary of Finance,” Salceda said.
Earlier, Salceda proposed increasing dividend remittances by government owned corporations and withdrawing equity from overcapitalized government firms to partly fund the relief package.
Salceda also says that the Senate is likely to approve taxes on POGOs and on e-sabong.
Tax the wealth for more UBI
“Of course, to fund this in the long run, we should rationalize existing taxes on the wealthy,” Salceda said.
“The concept of UBI is that it is a measure to correct some of the faults of the free market, including overaccumulation of wealth. We need those measures in this country,” Salceda added.
“The most obvious tax on the wealth is the real property tax. We should update land valuations and pass Package 3 of tax reform, or the Real Property Valuation and Assessment Reform. I am also proposing that we impose higher rates on low-density housing for the rich in Metro Manila.”
“If you are living in a high-density condo as a worker in, say Ortigas, you should be paying a lower tax per square meter than someone who lives nearby in Corinthian Gardens. They are causing traffic by gating whole sections of the city and hoarding land for high-density housing. They should pay a price for it. We can even lower taxes on lower-cost housing if we can make the rich pay more,” Salceda added.
“Only the superrich can afford to live in palatial homes in the densest metropolis in the world. That is unjust, especially when housing prices for the middle class are becoming unaffordable,” Salceda said.
“COVID-19 is not the time for shy incrementalism in policy. We need big structural changes. If that means we explore new ideas, we should,” Salceda concluded.