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    A Branding Triumph - TRAIN Article

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    lindsey fabella
    The passage analyzes the Tax Reform Acceleration and Inclusion Act (TRAIN) passed in 2018. It argues that while the TRAIN lowered personal income tax rates, benefitting the middle class, it did little for the poor and minimum wage earners who were already tax exempt. Additionally, the TRAIN increased excise taxes on fuel and sweetened beverages to offset lower tax revenue. This will likely increase prices on many goods and transportation costs, negating savings from lower income taxes. While touted as pro-poor, the TRAIN may disproportionately burden the low-income. The author views the TRAIN's passage as a political branding triumph for Duterte that downplayed its regressive elements.

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    A Branding Triumph - TRAIN Article

    Uploaded by

    lindsey fabella
    15 views2 pages
    The passage analyzes the Tax Reform Acceleration and Inclusion Act (TRAIN) passed in 2018. It argues that while the TRAIN lowered personal income tax rates, benefitting the middle class, it did little for the poor and minimum wage earners who were already tax exempt. Additionally, the TRAIN increased excise taxes on fuel and sweetened beverages to offset lower tax revenue. This will likely increase prices on many goods and transportation costs, negating savings from lower income taxes. While touted as pro-poor, the TRAIN may disproportionately burden the low-income. The author views the TRAIN's passage as a political branding triumph for Duterte that downplayed its regressive elements.

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    Branding Triumph

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    A Branding Triumph_TRAIN Article

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    The passage analyzes the Tax Reform Acceleration and Inclusion Act (TRAIN) passed in 2018. It argues that while the TRAIN lowered personal income tax rates, benefitting the middle class, it did little for the poor and minimum wage earners who were already tax exempt. Additionally, the TRAIN increased excise taxes on fuel and sweetened beverages to offset lower tax revenue. This will likely increase prices on many goods and transportation costs, negating savings from lower income taxes. While touted as pro-poor, the TRAIN may disproportionately burden the low-income. The author views the TRAIN's passage as a political branding triumph for Duterte that downplayed its regressive elements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    15 views2 pages

    A Branding Triumph - TRAIN Article

    Uploaded by

    lindsey fabella
    The passage analyzes the Tax Reform Acceleration and Inclusion Act (TRAIN) passed in 2018. It argues that while the TRAIN lowered personal income tax rates, benefitting the middle class, it did little for the poor and minimum wage earners who were already tax exempt. Additionally, the TRAIN increased excise taxes on fuel and sweetened beverages to offset lower tax revenue. This will likely increase prices on many goods and transportation costs, negating savings from lower income taxes. While touted as pro-poor, the TRAIN may disproportionately burden the low-income. The author views the TRAIN's passage as a political branding triumph for Duterte that downplayed its regressive elements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    A Branding Triumph: Views on the Duterte Admistration’s Tax Reform Acceleration and Inclusion Act

    Mark G. Fabella

    The passage of the Tax Reform Acceleration and Inclusion Act (TRAIN) last December 2018 is a
    triumph of political branding for the Duterte administration, to say the least.

    Tax reform was one of President Rodrigo Duterte’s key campaign promises when he ran for the
    office of the country’s chief executive. Back in 2016, the president harped on the apparent inequality of
    taxation burden among the different social classes in the country with the lower and middle classes
    consistently drawing the shorter straw against wealthy individuals and even wealthier juridical entities.
    (Geducos, 2018) Pledging to ease the burden of those who earn less and shift the load of funding
    government project’s to those who earn more, the administration through the Department of Finance
    drafted the various TRAIN packages. Package 1 of the TRAIN, in particular, deals directly with the taxation
    of income for individuals. The administration designed Package 1 of the TRAIN in such a way that it will
    appear that lower and middle income earners will be able to take home a higher net pay. The triumph of
    political branding for the administration, however, lies in the fact that they were able to downplay the
    negative impact of the lowering of personal income tax rates.

    After examining the provisions of Package 1 of the TRAIN, some economic experts became wary
    that “the government is using the lowering of income tax rated as a “smoke screen” for the actual effect
    of the Train Law to the majority of the population.” (Ballaran, 2018) A closer look at the various provisions
    of the aforementioned law will reveal that under the TRAIN law, lower personal income tax rates and a
    higher tax exemption threshold of Pho250,000.00 were designed to benefit the middle class. However,
    these devices do not benefit the poor and minimum wage earners since their income was exempt from
    taxes even before tax reform Package 1 was passed. Thus, the lowering of personal income tax rates do
    not benefit these segments of the population in any form or way whatsoever.

    On the other hand, the administration does not seem to be emphasizing the fact that in order to
    offset government losses in revenue that will arise from the lowering of personal income tax rates,
    provisions increasing excise tax on petroleum products and imposing tax on sweetened beverages have
    also been added to Package 1 of the TRAIN. These provisions were inserted to mitigate the impact of the
    lower tax collection from individuals. As some experts have noted, taxpayers are also expected to feel
    the negative impact of the TRAIN law because of the looming surge in commodity prices due to the
    increase of excise taxes under the TRAIN in which case people will have to endure some sacrifices in order
    to continue to make ends meet. (Alcain, 2018) Essentially, since the increase in excise taxes on petroleum
    products will be significant, almost all commodities that rely on oil in its manufacturing, processing, and
    transporting stages will be beset by price increases. Moreover, the actual cost of transportation itself may
    swell in the coming months due to additional excise tax impositions. This will be particularly burdensome
    for lower and middle income earners since the tax reform has also removed the personal and additional
    exemptions that taxpayers used to be able to enjoy to ease the impact of paying income taxes. Thus,
    whatever increase in the net take home pay that will be enjoyed by lower and middle income taxpayers
    will only be shifted to paying for increased prices of commodities and transportation. Even more
    unfortunate is the plight of minimum wage earners who did not enjoy any change in their income tax
    responsibilities since they have been exempt from paying income taxes even before the TRAIN was signed
    into law. However, they now have to share the same plight of those who have to shell out more in order
    to avail of commodities and transportation. How this conundrum is not at the center stage of our current
    political issues is really a product of the administration’s machinations to shift taxpayers’ attention to the
    other seemingly beneficial provisions of the law.

    The passage of the Tax Reform Acceleration and Inclusion Act (TRAIN) last December 2018 is a
    triumph of political branding for the Duterte administration, to say the least.

    References:

    Geducos, A. (2018, January 7). Palace: 4 of 5 promises of Duterte fulfilled. Retrieved from
    https://news.mb.com.ph/2018/01/07/palace-4-of-5-promises-of-duterte-fulfilled/.

    Ballaran, J. (2018, January 6). Economic expert warns Train can deliver negative effects to economy.
    Retrieved from: https://www.philstar.com/business/2017/12/22/1770885/winners-and-losers-
    how-train-law-affects-rich-poor-filipinos

    Alcain, A. (2017, December 22). Winners and losers: How the TRAIN law affects rich, poor Filipinos.
    Retrieved from: https://www.philstar.com/business/2017/12/22/1770885/winners-and-losers-
    how-train-law-affects-rich-poor-filipinos

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