tag:blogger.com,1999:blog-18212611.post7930215732689439451..comments2023-06-03T21:23:56.934+08:00Comments on Placeholder: Towards A New Social Contract on Taxes, Wages & Safety Netscvjhttp://www.blogger.com/profile/00327799000000108953noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-18212611.post-31571698675282220672008-10-27T05:50:00.000+08:002008-10-27T05:50:00.000+08:00Nothing Comes for FreeRevamping the social contrac...Nothing Comes for Free<BR/><BR/>Revamping the social contract to increase economic security will not come without a cost. Upper-middle-class earners and the well-off would be required to pay for more of their own benefits by shouldering the costs of the new savings and insurance mandates. Government programs would be scaled back for those who don’t need the help so that resources could be diverted to those who do. The elimination of many current regressive tax breaks could easily generate $200 billion a year. And another $200 billion could be saved by scaling back benefits that go to well-off citizens in programs ranging from agriculture subsidies to Social Security to Medicare.<BR/><BR/>The need to rethink the United States’ social contract provides us with the opportunity to give it a much-needed facelift. A new system consisting of a diversified economic portfolio of wage supports, mandated saving, new insurances targeted at real risk, and a strong safety net will both help to counter negative trends in income inequality and provide a new level of individual economic security. Last century’s social programs were aimed at helping retirees; this century’s should be aimed at increasing the opportunity and security of workers and their families.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-49164955906466875332008-09-08T09:27:00.000+08:002008-09-08T09:27:00.000+08:00hi anonymous,well sounds like you are a good fathe...hi anonymous,<BR/><BR/>well sounds like you are a good father. also good in investing. yes I agree that when the kids are small, the mom should stay home.. <BR/><BR/>thanks for sharing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-68626975080616955792008-09-08T07:21:00.000+08:002008-09-08T07:21:00.000+08:00"I would suggest that your wife will study busines..."I would suggest that your wife will study business and entrepreneurship"<BR/><BR/>80% of businesses fail within the first year. My kids are still young so it's better if she stays at home 'til the kids are old enough to go to school. Then she could go back to working full time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-21795304363368817192008-09-08T07:18:00.000+08:002008-09-08T07:18:00.000+08:00We can save more than you suggested-we're very thr...We can save more than you suggested-we're very thrifty. My pay is basically kept in a foreign bank account linked to an online savings account (like ING) which earns 8% per year at the moment.<BR/><BR/>Don't know much about stocks and other asset investments and don't want to risk it.<BR/><BR/>My strategy is that the foreign currency I put my money in will always have a high exchange rate versus the Peso. When I pull the money out of the foreign bank, I get charged a withholding fee of 12%. I think this is better than putting my foreign currencies in Philippine banks-they may offer about the same interest rates (5 to 7%) but I'm nervous of potential bank runs, the low insurance of PDIC (only 100,000 pesos), the inflation, and the devaluation of the Philippine peso.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-44440877333290419452008-09-08T04:53:00.000+08:002008-09-08T04:53:00.000+08:00correction:i was assuming that educational loan in...correction:<BR/><BR/>i was assuming that educational loan interest is 6%..Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-2596867090697015362008-09-08T04:48:00.000+08:002008-09-08T04:48:00.000+08:00"I would rather that I save and pay for my kids co..."I would rather that I save and pay for my kids college tuition now so that when they graduate they can get a kickstart at saving for a home/family. They won't have to worry about repaying college loans."<BR/><BR/>you sound like my brother and my cousins in the USA.. but that's very difficult to achieve in reality. Very few can save and make real return higher than inflation. If you save it on a regular bank that will provide 5% return, you will actually lose because inflation is now at double digits. Savings must provide a higher return than current inflation. The question would be, where would you invest your money to hedge against inflation? <BR/><BR/>I would suggest that your wife will study business and entrepreneurship .Lots of available opportunities, especially if you target the OFW dependents. they are the one's who can afford your business. I will not rely on savings and leaving that money in the bank. <BR/><BR/>You only need to save 6 months total of all monthly expenses or 1 year total of monthly expenses.. just in case, it will take you six months to 1 year to sail again. One year of total monthly savings is good financial stability , knowing that your job will be stable forever. <BR/><BR/>The rest of your money should go to investment ... open a new business or invest it on stocks..<BR/><BR/>I always believe that children should start learning basic finance by getting a student loan when they go to college. <BR/><BR/>Why would I finance my children's education in cash if I can use my cash and invest it to stocks or business that will provide me a return of 10% or more... <BR/><BR/>educational loan have lower interest rates. <BR/><BR/>By the time my children will graduate, the money i made on other investments will actually pay off the entire loan balance and at the same time, I will make 4%... <BR/><BR/>Just something to think about. If one don't like to risk in opening a business, then buy real estate. do not rent.. the interest payment on your mortgage is tax deductible...<BR/><BR/>thank you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-81377234644426042282008-08-01T20:39:00.000+08:002008-08-01T20:39:00.000+08:00Anonymous (the seaman), please disregard my comput...Anonymous (the seaman), please disregard my computations at August 01, 2008 12:44:00 AM. You have to pay 28,800 (240K x 12%). It turns out my suggestion will not work if the exemptions are retained. (Thanks to the other anonymous who commented at July 29, 2008 10:31:00 AM.)cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-9266609783480903162008-08-01T12:17:00.000+08:002008-08-01T12:17:00.000+08:00Sorry, my reference to 'figure 3' in my first sent...Sorry, my reference to 'figure 3' in my first sentence above (at 4:45:00 AM) should instead be to 'figure 1'.cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-75754896107463622322008-08-01T12:14:00.000+08:002008-08-01T12:14:00.000+08:00Anonymous (at 4:45:00 AM), in figure 3 of my blog ...Anonymous (at 4:45:00 AM), in figure 3 of my blog entry, there is a reason why i put <I>Universal Primary and Secondary Education</I> on the <I>Taxes</I> side and <I>College Loans</I> on the <I>Social Security</I> side. This is because i believe that the primary and secondary education of the nation's young is the obligation of society <I>as a whole</I>, which includes government and family while tertiary education is the obligation of the individual who is being educated.<BR/><BR/>My idea is that, instead of putting the burden of university education on the parents, we should let the student pay for his or her education via the Social Security deductions on their salaries during the initial years of their working life. They are young and able bodied so they should be able to take on such a responsibility. (This is better than spending their initial salaries as single young professionals on Starbucks or gimmicks.) Besides, the realization that they are paying would likely have a focusing effect which would make them be more serious with their studies.<BR/><BR/>Of course, as parents, you can help if you want to or are able to but you are better off saving for your retirement so you won't be a financial burden to your kids later.<BR/><BR/>On the topic of 'means testing', i believe that when it comes to our State Universities, the only kind of test should be rigorous testing of acquired knowledge and intellectual ability. If your kids are not that bright (hypothetically speaking), then i don't think they should get in by virtue of their capability to pay as it would deny <I>a poorer, but brighter kid</I> a shot at a university education. Our Society should strive to become a Meritocracy based on the right set of criteria, and in this case, it means prioritizing intellectual capability over their parents' wealth.cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-52995565108005247792008-08-01T04:57:00.000+08:002008-08-01T04:57:00.000+08:00And I need to pay for my kids braces. That's 25,00...And I need to pay for my kids braces. That's 25,000 a pop. I don't want to disadvantaged my kids by them having Ai Ai De las Alas' smile when they grow up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-19266845356643295602008-08-01T04:45:00.000+08:002008-08-01T04:45:00.000+08:00"On your children's college education, we should f..."On your children's college education, we should follow what Australia does where a student loan can be obtained to be paid for by the child once he/she is already working."<BR/><BR/>Great (sarcasm intended). So what you're telling me is, in principle, I should teach my children to rely on debt to fund their education.<BR/><BR/>I would rather that I save and pay for my kids college tuition now so that when they graduate they can get a kickstart at saving for a home/family. They won't have to worry about repaying college loans.<BR/><BR/>What will happen if every Filipino college aged person would want a college education? Can the government afford to pay for 10 million college kids for free?<BR/><BR/>What's worse is that this government funded college loan would probably subjected to means testing. Given your irrational emphasis that I'm on a high-income level, my kids won't probably be qualified for loans, as they're <I>too</I> rich.<BR/><BR/>To trim down the numbers of potential college kids, the government will also probably do an academic means test. That means those who don't have an NSAT score of 90 and above will probably be excluded from this program. What if my children were not that bright? Should that preclude from a college education?<BR/><BR/>Government funded college loans is just another way of government stealing from the income of one hardworking man from one generation and allocating it to the children of another generation. Granting loaned college education en masse at the present will also be funded by government debt, which means more constraint on our deficit and debt position. <B>Where will the government get the money to pay for this program given that you've already cut the government revenue by cutting taxes? More foreign debt?</B>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-73220552383208845182008-08-01T00:44:00.000+08:002008-08-01T00:44:00.000+08:00Anonymous, i need to correct the above tax computa...Anonymous, i need to correct the above tax computation in view of <A HREF="http://www.manilastandardtoday.com/?page=tax_Exemption" REL="nofollow">the new exemptions based on RA 9504</A>:<BR/><BR/>Gross Income: 240,000<BR/>Less Exemptions (as per existing law):<BR/>Married - 50,000<BR/>Children -50,000<BR/>(i'm assuming you have 2 kids @25K per child)<BR/><BR/>Taxable Income: 140,000<BR/>Income Tax Payable (@12%) 16,800<BR/>Add back Food Stamp 7,300 <BR/><BR/>Net Annual Disbursement: 9,500<BR/><BR/>Your effective tax rate is therefore 4%.<BR/>(9,500/240,000)cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-34985561602211966992008-07-31T19:13:00.000+08:002008-07-31T19:13:00.000+08:00Anonymous (at 2:51:00 PM), i know that you find it...Anonymous (at 2:51:00 PM), i know that you find it hard to believe, but the figures don't lie. At 240K per year, your wife and kids are among the more fortunate ones. BTW, thanks for providing information on the breakdown of your expenses, that's very useful.<BR/><BR/>Regarding the amount of tax to be paid, it's not 7300 per year. That's the food subsidy that your wife can receive, if she chooses to. <BR/><BR/>Your tax payment is computed as follows:<BR/><BR/>Gross Income: 240,000<BR/>Less Exemptions (as per existing law):<BR/>Married - 32,000<BR/>Children -16,000<BR/>(i'm assuming you have 2 kids @8K per child)<BR/><BR/>Taxable Income: 192,000<BR/>Income Tax Payable (@12%) 23,040<BR/>Add back Food Stamp 7,300 <BR/><BR/>Net Annual Disbursement: 15,740<BR/><BR/>Your effective tax rate is therefore 6.6%.<BR/>(15,700/240,000)<BR/><BR/>On your children's college education, we should follow what Australia does where a student loan can be obtained to be paid for by the child once he/she is already working. Perhaps this can be done by allowing educational loans against SSS contributions. <BR/><BR/>I also believe that the portion of OFW remittance that is contributed to the SSS should be income tax exempt.cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-79597875375752686702008-07-31T14:51:00.000+08:002008-07-31T14:51:00.000+08:00"family receives 240K per year...that would make y..."family receives 240K per year...that would make your family better-off (in terms of income) than seventy-percent of the Philippine population."<BR/><BR/>Yeah if I'm better off, then GMA is popular.<BR/><BR/>Those food stamps of twenty pesos X 365 days = P7,300 X 10 years = P73,000.<BR/><BR/>P73,000 in ten years. I could just spend that money on my kids college tuition.<BR/><BR/>CVJ, this is how my wife and I budget our income, down to the last pesos. As you can see, P73,000 is not enough to cover the college tuition of my kids when you factor in inflation.<BR/>Of course, you have to factor in rent and food and the cost of books.<BR/><BR/>On a monthly basis, we currently pay P7000 pesos on rent, P3000 on utilities and water, P5000 on food, P1000 on tuition, there's about P4000 left for clothes, medical, and other contingency spending.<BR/><BR/>We need every peso we can save. And I'd rather that I save that on my kids future.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-41605061060075992132008-07-31T14:37:00.000+08:002008-07-31T14:37:00.000+08:00Twenty pesos? HAHAHAHA. Anung mabibili ku don? 5 p...Twenty pesos? HAHAHAHA. Anung mabibili ku don? 5 pandesal?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-14142247716086492292008-07-31T14:29:00.000+08:002008-07-31T14:29:00.000+08:00You have a fundamental flaw in your principle, and...You have a fundamental flaw in your principle, and that is that we have abundant resources to feed the poor.<BR/><BR/>No we don't. If you haven't noticed, our food production/land available for farming is reaching Malthusian levels viz-a-viz our population level. Which is why the lands of Vietnam, Pakistan and Thailand are providing for our additional rice needs.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-89005687585346079772008-07-31T13:38:00.000+08:002008-07-31T13:38:00.000+08:00Anonymous (at 10:41:00 AM), rest assured i haven't...Anonymous (at 10:41:00 AM), rest assured i haven't forgotten your concern. I'll address the issue in a future blog post.<BR/><BR/>Anonymous (at 10:50:00 AM), as i propose it, the food stamp allocations are available to everyone (even your wife). Your wife can tell your parasitic relatives to just avail of the food stamps so they won't have to starve to death. Under the New Social Contract, the rest is up to them. That's the point behind principle B.1 above.<BR/><BR/>As a Filipino, i would like to remind you that over and above your duty to your family, you also have a duty to your country (and countrymen). At your income level, you happen to be among the more better off. Tayo tayo lang ang puwedeng magtulungan.cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-62803078795901958752008-07-31T10:50:00.000+08:002008-07-31T10:50:00.000+08:00"anonymous: where do you get the money to spend fo..."anonymous: where do you get the money to spend for breakfast/lunch/dinner (and movies and cigarettes)?"<BR/><BR/>We get free board and lodge at the ship. I quit smoking and drinking and don't spend on myself. All of my money is budgeted for my two kids by my wife.<BR/><BR/>"i believe that convincing the rest of the Filipinos (i.e. the other seventy percent) to do their part requires that those who are relatively better-off to set an example"<BR/><BR/>I don't see how the government taxing my money will make the desperately poor and unemployed get jobs.<BR/><BR/>You're acting as if the job market is demand driven. It's not. It's supply driven. So whether or not my wife gives a few hundred pesos to my pitiful, parasitic relatives they will still not be able to have jobs simply because there aren't any. And what you want to do is to further institutionalize parasitism by making the government the ones to determine which poor people to feed?<BR/><BR/>Excuse me, but I'd rather that my wife decide who to feed by spending our money on deserving relatives.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-55844164024658486892008-07-31T10:41:00.000+08:002008-07-31T10:41:00.000+08:00This budget is an epic fail because it doesn't add...This budget is an epic fail because it doesn't address our debt repayments. In fact, it totally ignores the reality of debt and makes assumptions as if the Philippines has no debt.<BR/><BR/>CVJ, are you one of the debt free coalition radicals?<BR/><BR/>You've totally ignored the salient points in Tuesday, July 29, 2008 10:30:00 AM and Tuesday, July 29, 2008 10:31:00 AM.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-12432011600952010472008-07-30T23:01:00.000+08:002008-07-30T23:01:00.000+08:00anonymous: where do you get the money to spend fo...anonymous: where do you get the money to spend for breakfast/lunch/dinner (and movies and cigarettes)?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-77582446840969456032008-07-30T19:06:00.000+08:002008-07-30T19:06:00.000+08:00Thanks for providing the info Anonymous. At 20K r...Thanks for providing the info Anonymous. At 20K remittance per month, that would mean that your family receives 240K per year. Given the latest <A HREF="http://www.census.gov.ph/data/sectordata/2006/ie0604.htm" REL="nofollow">Family Income and Expenditure Survey (FIES)</A>, that would make your family better-off (in terms of income) than seventy-percent of the Philippine population. This is not to trivialize your difficulties, but i believe that convincing the rest of the Filipinos (i.e. the other seventy percent) to do their part requires that those who are relatively better-off to set an example.cvjhttps://www.blogger.com/profile/00327799000000108953noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-54263551414452290282008-07-30T16:23:00.000+08:002008-07-30T16:23:00.000+08:00"Hi Anonymous, if you don't mind me asking, how mu..."Hi Anonymous, if you don't mind me asking, how much of the 20,000 you earn as a seaman do you remit back to the Philippines?"<BR/><BR/>All of it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-11831156256051147052008-07-29T20:14:00.000+08:002008-07-29T20:14:00.000+08:00"We have our disagreements, but we are one nation ..."We have our disagreements, but we are one nation with one faith. As your President, I care too much for this nation to let anyone stand in the way of the people’s well-being. I will let no one threaten our nation’s survival. "GMA SONA 2008<BR/><BR/>The DRAMA has begun!!!<BR/><BR/>Expect shortly this political game scenario on how Gloria Arroyo will extend her term beyond 2010 in spite of constitutional restrictions.<BR/><BR/>This will just be a repeat of the 2003 events when Gloria reneged on her 2002 Rizal day promise to the nation not to run in the 2004 elections.EQhttps://www.blogger.com/profile/05987064762287708556noreply@blogger.comtag:blogger.com,1999:blog-18212611.post-63802099473496954572008-07-29T10:31:00.000+08:002008-07-29T10:31:00.000+08:00You're 12 percent across the board flat tax wouldn...You're 12 percent across the board flat tax wouldn't be enough to cover our debt burden. A huge chunk of our budget is used by Congress to buy dollars from the CBP. The reason we buy dollars from our own central bank is that we can't pay our debt in pesos. Thus, when that 70% of that 600 billions pesos yearly budget is allocated to debt, the congress has already factored in the interest payment and capital reduction on that debt.<BR/><BR/>The most important thing is that we don't default (the reasons for which I've laid out on the previous post).<BR/><BR/>The progressive tax rates have also been calculated with the view that it won't be high enough that the rich (oligarchs) will move to other countries but not low enough that we won't meet our debt obligation.<BR/><BR/>The 12% figure you pulled out of your ass too low that we won't be able to make our debt obligation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18212611.post-81100571621021827462008-07-29T10:30:00.000+08:002008-07-29T10:30:00.000+08:00I think any tax reform fantasy should take into ac...I think any tax reform fantasy should take into account the big picture.<BR/><BR/>The big picture is that our government finances are built to maintain our credit rating on Moodys and Standard and Poor. If we default on our debt who's gonna lend us money to buy dollars that are needed to import rice and oil, two commodities that we can't produce enough of and we don't have respectively.<BR/><BR/>And if you discourage OFW's to remit their dollars, that would mean the government has to take out tranches from IMF to maintain our 2-months supply of dollars.<BR/><BR/>With the price of oil and rice at record levels, this means we need more dollars to import these commodities. Currently, OFW's are keeping our dollars balance of payment on the positive. Any plan to "discourage" dollar remittances is financial suicide and would further aggravate our debt position.Anonymousnoreply@blogger.com