Pacquiao, Celebrities, and Taxes

Here's my initial take on Pacquiao's recent scuffle with Philippine tax authorities....

Source: Inquirer

I'm a fan of both the boxing legend Manny Pacquiao and the professional tax reformer Kim Henares. I think that they both excel in their respective professions with shared interest in realising a better Philippine society.

So far, it seems that Pacquiao is not fit as a 'lawmaker'. But let's admit it that, given the sad realities of our social system, as a 'public servant' and a public figure, Pacquiao has touched and inspired much more lives — psychologically as well as materially — than any Filipino politician or celebrity that I/we know. Compared with other politicians, at least we all know the whereabouts and activities of Pacquiao. Given current social circumstances and his life's history of privation, Pacquiao has done a lot of good things to the Filipino people. Based on the logic of taxation, the Philippine state — as such, the Filipino people — has an interest in a successful boxing career of Pacquiao because the state gets balato from his earnings in the form of income taxes, which are then used for public services. Through taxation, this, in a way, gives credence to Pacquiao's monicker as the 'People's Champ' or the Pambansang Kamao. In principle, the state, in return for citizens' payment of taxes, provides rents in the form of incentives, protection, or other social provisions. (The US government, for instance, goes as far as militarily protecting the local and global interests of US-based corporations.) To maintain a harmonious relationship between the state and taxpayers, both of them must be engaged with a mutual give-and-take relations.

Wish Pacquiao were surrounded by competent, trustworthy, well-meaning, and professional circle of advisers, friends, and partners. As a young public servant (almost my age), I regard him as a work-in-progress, but one who is very receptive to ideas and learning. I believe that Pacquiao's heart is in the right place and that's a very good foundation for sharpening his mental faculties in making political decisions.

To those who are uneasy with a multi-tasker boxer-politician-businessman-celebrity Pacquiao, please note that in some developed countries like in Scandinavia many professional athletes have day jobs. An indicator of a progressive country is that being an elected government official is considered as just one of those professions, one of those day jobs. This remains my dream for the Philippines to attain a certain level of economic development with huge division of labour and a multitude of professions where people are no longer hypnotised by the lives and ways of the rich and famous simply because they have their own decent source of income, reliable state support mechanisms, and a personal sense of a meaningful life. Unfortunately, ours is a star-struck society with vicious patronage politics, poverty, inequality, and unemployment so the tendency is that the people depend and demand too much from, and are captivated by the lifestyle and affairs of, their patron-politicians and idol-celebrities.

In socio-economic developmental terms, there's really something seriously wrong if our country's biggest individual taxpayers are the celebrities. Among other things, this tells us about our backward economic mode of production which substantially determines the wealth-creating capacity — and thereby the scope of redistribution — of our nation. Here's a development common sense: A nation of boxers and celebrities won't be as rich and progressive as a nation of engineers, scientists, and entrepreneurs.

Come on, truth be told, Filipino celebrities have been working so hard, busting their asses. They have delivered, honing their crafts and giving honour to the country. They are also part of the working class — with no 'job security' and subject to exploitation of those who pay them talent fees and those who tax their earnings. They, too, have all the right to voice out their legitimate grievances.

For the purpose of lesson-drawing, I highlight these notes from a blog entry last year entitled 'Taxation, Production, and Redistribution: Challenges for Philippine Development':

In taxation, policy coordination of all government agencies is a must. Otherwise, there will be a conflict between the overly enthusiastic tax collector and the disgruntled citizen taxpayers. In a word, the fundamental principle applies, the people must pleasantly feel and see how and where taxes are spent. It is the task of the government to make people appreciate and realize that taxation is a collective social development process in which the conduct of business — the producing, selling, and buying of goods and services — is a social activity that has socio-economic consequences and implicates the entire society. 

...[T]here will be conflicts especially in a situation where the government only enforces its right to tax people without fulfilling its responsibility to create conditions for 'full' employment, let alone 'formal' employment.