(Editor’s note: In the news are proposals from both houses of Congress to adjust income tax rates and brackets. Under current tax laws, those earning P500,000 and above annually are taxed the maximum amount of 32 percent. That is why a middle manager is in the same tax bracket as the company president he works for.
In the bill filed by House ways and means committee chair Rep. Miro Quimbo, the Marikina congressman wants only those earning more than P1 million annually to be taxed 32 percent. The income tax rates for the other brackets will be adjusted accordingly.
Normally this would be good news for those in the lower income bracket. But in a letter addressed to Rep. Quimbo, a manager working for a Philippine company believes this new bill still falls short in making the tax rates in the Philippines fair and equitable.)
After working for more than 20 years in my profession, I am finally earning a salary of around a million a year! Wow! Big time!
Or am I?
How can I be if the government takes away 32% of that, or P320,000 to be exact. That leaves me with P680,000.
Even if I don't spend a single peso of that on our monthly household budget, that cannot buy me a "middle class" car, like a Civic or a Corolla, which costs over a million now. That can probably buy a Cherry, but that would be lower middle class.
But, alas, there's this thing called family and the reality that they should come first before any middle-class status symbol.
My three sons all go to school now, and this year, we are paying P75,000, P65,000 and P100,000 (my eldest did not make it to UP so he is now enrolled in UST at 50k per sem. That would have been P60,000 savings if we round up UP tuition to 20k per sem). That leaves me with P440,000.
So, I have P440,000 to divide by 12 (let's leave the 13th month to Christmas expenditures and gifts for now) which gives me roughly around P36,600 for the monthly budget. Our apartment rent is P13,000. That leaves me with P23,600.
You might be wondering at this point why a "millionaire" like me is doing living in a rented apartment. Well, buying a house nowadays involves giving your share by way of an equity, say as low as ten percent. Ten percent of a P2-million house (if I can find one in the city) is P200,000. I don't and can't have that money because of what follows...
I could further break down how I spend the remaining money I have but believe me when I say P23,000 is not enough for utilities, grocery, transportation and the kids' allowances alone. I don't even know how I fork out P55 for lunch everyday for two weeks until the next payday comes.
The P320,000 the government took from me can greatly subsidize the gap. But of course, I want to give my share as a citizen so let's say I'd leave 20% to the government and ask back only P12,000 per month.
Now P12,000, if for instance we say that the P36,600 I originally had with me was enough for the whole monthly budget (which I established is not), can do a lot for me. It still cannot buy me a middle-class car, because that's just P144,000 for the whole year, but it can make a lot of difference in my "standard of living."
For instance, I could hire a "karpintero" for P500 a day, spend a few thousand on construction material and paints, to have our dangling ceiling repaired and our peeling wall repainted, both of which have been looking like that for quite a number of months now.
Or, I can replace our more than 10-year-old refrigerator, which has been jacking up our electric bill because it is no longer energy efficient due to leaks.
I also have my eye on a new sofa, because our more-than-a-decade-old sofa is smelling quite like a 2-peso bill that has done its rounds in the public market and back. Plus, it's sagging like a bean bag which was not its original intention.
Maybe, I can even spend part of it on a family vacation say to Baguio or Batangas, or any place that would incur cost of air transportation. That would leave out Palawan and Cebu, et cetera, where we could have more fun in the Philippines, of course.
Filipinos are good spenders, after all, and if you give them that extra money, they would probably spend it right back for "luxuries" like the ones I just mentioned. Truly big time! Truly middle classy!
Or I can probably save all that money and in 2 years I would have saved the 10% needed for equity on a new house!
Suffice it to say P12,000 would go a long way in making an old fogey like me smile and look back at my career of and say it was not actually that bad. But more than that, I would probably be helping pump prime the economy; and if you multiply "me" by the millions of Filipinos (70% of the workforce, if I heard you right on the radio) who pay their taxes automatically by deduction from their salaries, that is more than what any Disbursement Acceleration Program can do.
Alas, even if your bill passes, and that's still like shooting for the moon, I would still be considered a "millionaire" together with the Ayalas and the Sys, not discounting the fact that their income is exponentially far larger.
If your bill passes and I am clustered together with the Ayalas and the Sys, I would still be labeled a millionaire, albeit not with the standard of living one would expect a millionaire to have.
My only consolation right now is that you, Mr. Congressman and former schoolmate, have a lower salary than me, and that makes me more "big time" than you! But that's because you chose the way of public service and I chose the private sector.
This is a true story. Attached are photos from my rented apartment.
Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.