September 22nd, 2021
Salceda on wealth taxes: Tax luxury use of land instead of taxing businesses; House tax panel chair wants taxes on golf courses, luxury subdivisions in Metro Manila that “cause traffic” to fund socialized housing
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) proposed taxing ‘inefficient’ use of land such as golf-courses and luxury, exclusive subdivisions in Metro Manila, in response to suggestions by the members of the Makabayan bloc of the House of Representatives that a “wealth tax” on the richest Filipinos be imposed. Salceda made the comment during the defense of the general principles of the 2022 National Budget.
In his responses as a sponsor of the budget’s general principles, as well as the departmental budgets of the Department of Finance and the National Economic and Development Authority, Salceda warned against what he called “the temptation of taxing capital” in comments after the session.
“You have to either rule the world, or you follow the rules. We can’t raise our taxes too high for capital because it’s so easy to move capital offshore. I sympathize with the Makabayan bloc’s case for taxing the rich. They have escaped the reach of the taxman for too long. But taxing businesses is not the way to do it,” Salceda said.
“The best way to tax wealth is to tax the inefficient and dysfunctional use of land in this country. The easiest and fairest way to do that is to tax low-density use of land in very high-density areas. That is the case for golf courses and exclusive subdivisions in Metro Manila, especially those for the super-rich.”
“Imagine, in the world’s densest Metropolis, we have golf courses. They create traffic, are an inefficient use of land and water, and prevent a lot of fair development such as socialized housing from having space in the city,” Salceda said.
“The most comparable city when it comes to population density for NCR is Tokyo. To get to a golf course, you have to go to the outskirts of the city center itself. Here, you even have a golf course at the middle of the Metro, where traffic from the North meets that of the South,” Salceda added.
“Do the working class use golf courses? No. But they suffer from the lack of housing and the traffic that results from these inefficiently-placed developments,” Salceda said.
“The problem with taxing net worth per se is that most of it is held in financial instruments that can be easily transferred offshore at the press of a button. The moment you impose an outright wealth tax, it’s gone. And our business environment and jobs will suffer.”
“If you want to tax wealth, tax wealth that cannot be moved outside the country. That’s land,” Salceda added.
“Let’s earmark provisions towards socialized housing. So that you achieve the policy objectives of the tax on both ends. You punish inequality and inefficiency, and you even out differences in opportunity.”