Monday, December 10, 2012

A Simple Tax Computation to Expose How Slavish Idiot We Are


Philippines - Let me show you how taxation is a form of slavery.

Assuming you earn P8000.00 semi-monthly with 2 dependents. Married or Single with dependents are already categorized as the same. For simplicity, let's not include overtime pay and deductions. BIR withholding tax bracket says that for the above specs, you are in the bracket of not less than PhP7,083.00 and not over than P10,000.00, with initial tax of P354.17 + [20% x (8,000-7,083.00). The computation of your tax would be: 
Tax semi-monthly = P354.17 + 183.40 = P537.57

From above computation of semi-monthly tax, your annual tax is:
Annual tax = 537.57 x 2 x 12 = P12,901.68.;

While your annual gross income is:
Annual Gross Income = 8000 x 2 x 12 = P192,000.00.

Assuming you work 22 days per month (or 264 days per year), with P16,000 monthly salary, your rate per day is: Rate per day = P727.27.

Here it gets intriguing. Your total tax of the year, P12,901.68, is equivalent to how many days of your work? To get the sense out of it, divide your annual tax by your salary per day, it will show you that there are about 18 days of work equivalent to your annual taxes.In other words, you work 18 days per year for no pay at all because the amount of P12,901.68, supposedly yours to take home, goes to the treasury of the state.

But pro-government taxation individuals would contend that you pay your taxes not for nothing. They say, your taxes comes back not in the form of money but in forms of various services like security, roads, judicial, health, education among others.That seems a good point. But what was missed?

It is time to point out that being against taxation doesn't mean one is against services. Social services are still available yet with a very important distinction: the coercive power of the government to tax doesn't exist. Free-market will deliver it.
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