STRENGTHS

HIGH TAX REVENUES

Money provided by taxation has been used by states and their functional equivalents
throughout history to carry out many functions. Some of these include expenditures on
economic infrastructure (roads, public transportation, sanitation, legal systems, public
safety, education, health care systems), military, scientific research, culture and the arts,
public works, distribution, data collection and dissemination, public insurance, and the
operation of government itself.

WEAKNESS
1. INADEQUATE INCOMES
The total outcome of all of the effects listed below is a large tax burden. And only
workers feel the brunt of this burden, because only workers create wealth. When all of
these effects are combined, the tax burden on the average worker is currently about 73
percent of income. So people can't live on their incomes.
2. LOW WAGES
Multiple governments levy so many taxes on businesses that "taxes" is the highest budget
items on the ledger sheets of most businesses. These taxes take away some of the money
otherwise used to pay wages. So employers can't pay good wages.
3. HIGH PRICES
Multiple governments levy so many taxes on businesses that "taxes" is the highest budget
items on the ledger sheets of most businesses. Businesses have to raise prices to get
money to pay these taxes. So product prices go up. This leads to inflation.
4. SHODDY PRODUCTS
Multiple governments levy so many taxes on businesses that "taxes" is the highest budget
items on the ledger sheets of most businesses. These taxes take away money otherwise
used to improve quality. Instead, businesses must cut corners to make the products and
pay the high taxes. Many recalls are the results of businesses cutting too many corners, to
save money so they can pay the high taxes.
5. PRODUCT UNAVAILABILITY AND DISCONTINUATION
Because high taxes cost businesses more, they can't provide as many products as they
used to be able to. Property taxes make it expensive to stock products with lower
quantities demanded. And manufacturers can't afford to produce the low-demand
products and also pay their taxes. The result is that people with allergies to the
mainstream products can't buy any products they can use.
6. LOST JOBS
Many businesses go bankrupt, because they can't afford to operate after government takes
its cut. Other businesses flee the country, to escape the high taxes. And still other
businesses must cut their payrolls to stay within their incomes. The result in each case is
the loss of jobs those businesses provided in the economy.
7. FORECLOSURES, EVICTIONS, AND HOMELESSNESS
 Because taxes are so high, people who originally entered into mortgages or rental
contracts with the ability to pay them now no longer have the money to pay the monthly
payments. Landlords also can't pay their taxes and their mortgages, causing the loss of
the rental units. And if the taxes are not paid instead, government quickly seizes the
property and sells it at auction at a sheriff sale. Thus, high taxes cause foreclosures and
evictions.
With the foreclosure or eviction comes homelessness, because these victims of
government greed can no longer afford to pay rent or mortgage payments. So high taxes
cause homelessness.
8. POVERTY AND HIGH CRIME
Because more people can't afford to live on their incomes, the poverty rate goes up. This
causes an additional drain on the budgets of government social programs. This means that
each poor person can't get enough to live on.
Many poor people, unable to find jobs because government overtaxed the economy, turn
to crime to get the money needed to support their families. This causes the crime rate to
go up. And since many of those crimes are robberies, the violent crime rate goes up too.
9. CHRONIC RECESSION
The high taxation takes so much away from the economy that it enters a permanent form
of recession. If government tries to boost the economy with increased government
spending, the result is stagflation (simultaneous high inflation and unemployment)
instead of prosperity. The only cure for stagflation is to cut both taxes and government
spending. But this takes time to happen, keeping the effects of over taxation in place for a
time after the over taxation ends.
10. LOW FOREIGN DIRECT INVESTMENT
Level of taxation is very important. If taxes are high in a country, firm will not invest
because a large proportion of their profits will be confiscated by the state so this is a very
strong disincentive to invest. Also, to corporations, corporate taxes are a cost so they will
pass it on to consumers through higher prices which lead to a general rise in price levels
so lower corporate taxes will make a country more attractive for investment.

OPPORTUNITIES
1. INCREASE PARTNERSHIP WITH PRIVATE SECTORS
Partnership Programme harnesses the expertise, know-how and resources of the private
sector to tackle important global industrial development issues.
A growing number of industry leaders are recognizing that aligning business strategies,
operations and supply chains with sustainable development outcomes is not only a social
responsibility, but also increasingly a business imperative. Adopting more socially inclusive and
environmentally sustainable business operations helps to mitigate risk, develop new markets, and
cultivate sustainable relationships with suppliers, customers and investors.

2. TO LOWER CORPORATE TAX RATES.

 Despite the long-standing principle that taxes are the lifeblood of the government,
Congress has taken steps to revisit and evaluate our corporate tax rates. Concurrently with the
kickoff of the WEF on May 21, the Philippine Senate Ways and Means Committee auspiciously
held a hearing on Senate Bill No. 2163 (the proposed Act Reducing the Corporate Income Tax
Rate, Amending Sections 27 and 28 of the National Internal Revenue Code of 1997, as
Amended, and for Other Purposes). The bill was explained to be part of a twin measure to reduce
the countrys income tax rates for individuals and corporations in preparation for the ASEAN
integration.
Under the bill, a gradual decrease in corporate income tax rates is proposed to be
implemented over a span of three years with a reduction of 1% in 2015, 2% in 2016 and 2% by
2017, by which time a corporate income tax rate of 25% would be in place.

THREATS
NATIONAL BUDGET DEFICIT
REDUCE NATIONAL SAVING

A budget deficit occurs when an government spends more money than it takes in.
An increase in the budget deficit reduces national saving unless it is fully offset by an
increase in private saving. If national saving falls, national investment and future national
income must fall as well, all else equal. Therefore, to the extent that budget deficits
reduce national saving, they reduce future national income. This reduction occurs even if
there is no increase in domestic interest rates.