THE PARALLELISM BETWEEN THE PHILIPPINE REPUBLIC ACT 10963 (TRAIN LAW 1) TO THE DIFFERENCE PRINCIPLE OF JOHN RAWLS’ POLITICAL PHILOSOPHY: AN ANALYSIS
Abstract:
Equality and Justice – these are the two essential principles which must prevail in order to attain a well-ordered society. On January 1, 2018, the Comprehensive Tax Reform Program of the Philippine Government implemented the first part of the Republic Act 10963 or known as Tax Reform for Acceleration and Inclusion (TRAIN) Law to the Philippine society. This law aims to amend several provisions on the National Internal Revenue Code of 1997 which pertains mainly to the taxes imposed on individuals. Moreover, it also aims to gather funds for the government’s projects to build infrastructures and social programs which later on benefit those people who are disadvantaged in the society. Despite this aim, the law receives criticisms from citizens because of the issues of inequality most especially to those people in the lower sector of the society. All goods must serve all people, but in this kind of law seems to fail its main objective- for the common good. Hence, the proponent of this research will give an analysis on the parallelism between TRAIN Law and the concept of Difference Principle as introduced by John Rawls in his Theory of Justice. This study will decipher the other side of the coin – that despite the diversity of criticisms to the TRAIN law, it can also be a means for economic equality as the Difference Principle of John Rawls.
Keywords: Economy, John Rawls, Social Justice, Difference Principle, Philippines, Tax Reform
Introduction
The Philippine Republic is one of those countries who has a fast-growing economy in Asia. [1] There are several amendments on laws since then in order to ensure the equality and fairness of distribution of wealth among the different sectors of society. Despite this claim, however, there are still issues that face the current economy of the Philippines particularly on “the ever-widening gap between the rich and the poor.”[2] On December 19, 2017, Philippine President Rodrigo Duterte signed a Tax Reform bill into a law,[3] which later on receives criticisms from different sectors of the society despite its efficient economic aims. This law aims to have “a simpler, fairer, and more efficient tax system which is needed to promote investment, create jobs, and reduce poverty.”[4] This aims can be attained, however, in the long-term implementation of the TRAIN Law. But as of now, citizens are affected on the increase of tax rate that is being applied to the common products which are part of the necessities of man like food, clothing, shelter, electricity and water supply.
One of the most influential thinkers of late modernity, John Bordley Rawls, an American political philosopher, introduced an idea in order to ensure the equal liberty among the members of the society and provide a solution to maintain the fairness of distribution of goods. Rawls focused his studies on attaining justice in the political and social realm. He envisioned to have “an ideal social world that is reachable from the present on a plausible path of transition and once reached, could sustain itself in its real context.”[5] He made a theory which not only focuses on the moral and social realm but also economical. He envisioned to have an equality between individuals living in the society and if inequality arises, then this inequality must also be for the benefit of all people most especially those who are least advantaged in life. These aims can be achieved, however, if these principles of justice are applied in the society. This research, moreover, focuses on John Rawls’ notion of Difference Principle and the execution of the first part of the TRAIN Law in the tax system of the Philippine society.
Man as Social Being
Man is a social being, as he belongs to the society where there is social cooperation for the development of society.[6] Man was made by God equally. Each individual possesses an equal and inviolable dignity that must be respected and protected by the other. However, as he continues to exist in the society, he is not exempted from experiencing injustices at home, universities, and work or even in the government. Although God gave man equal rights in his creation and equal dignity as human being, man is not exempted to the social and economic disparities. In consequence, people’s social class is divided into three categories: the upper class, middle class, and the lower class. These classifications in economic status also leads man to have social discrimination which may, later on, cause injustices to the other. With this, the government as the one who leads in building a strong nation, must be the first to advocate justice, equality, and peace in the society and in order to preserve the dignity of each individual and maintain justice in the society, Government should decide wisely what laws and regulations are to be applied to the society in order to prevent greater social injustices.[7] The poor must be the government’s priority in distributing economic goods since they are more vulnerable from abuses of those people who have more power and opportunities.[8] Moreover, According to the Church’s social teaching, “all human beings, therefore, are ends to be served by the institutions that make up the economy, not means to be exploited for more narrowly defined goals.”[9]
Philippine Democratic Society
Philippine society had experienced many changes in their system of government due to the different regime that colonized its land – from the time of Spaniards, Americans and Japanese who made an indelible mark in the Philippine history. However, despite these invasions from different nations and the resistance of Filipino people to the various form of governance, the Philippines attained her full independence on July 4, 1946, upon establishing and declaring the Commonwealth with the approval of United States of America on 1935. With this declaration, the democratic system of governance in the Philippines was introduced patterned from the American constitution which was led by Manuel L. Quezon as the first president of the Commonwealth. Upon the declaration of independence, however, the Philippine society experienced many changes and reformation in economy, politics, and form of governance. This was highlighted with the presidency of Ferdinand Marcos and his declaration of Martial Law on September 1972[10] which leave many amendments in the Philippine constitution, reformation in government and changes in the Philippine society that last for 10 years which officially ended upon the Edsa Revolution on February 22, 1986.[11] After the Edsa Revolution, the dictatorship form of governance was returned to a democratic regime that was led by Corazon Aquino and later on continued until the present-day government which is led by President Rodrigo Duterte. This democratic government has three branches namely: executive, legislative, and judicial.[12] Despite these reformations and amendments within the succession of regimes, however, issues regarding social justice are still in conflict.
i. 1987 Constitution on Social Justice
Philippine Constitution undergoes many amendments from the establishment of first republic under the Malolos Constitution on 1899, then on 1943 under the Japanese occupation, on birth of fourth republic under the 1973 constitution, until it reaches the1987 constitution where the sovereignty resides on the people and not solely on the hands of the president or the prime minister.[13] Aside from the shift from dictatorship to a democratic form of government, one of the notable amendments on the 1973 constitution is the Bill of Rights.[14] In the Bill of Rights of 1987 constitution, human rights including social and economic rights are given more emphasis. Human dignity is the main basis and priority of the law. No law should be passed without acknowledging human dignity in deliberation, because in a democratic or republican state, all individuals are endowed with inviolable human dignity.[15]
According to the constitution of the Philippine government, moreover, “the Congress shall give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequalities by equitably diffusing wealth and political power for the common good.”[16] In other words, the state recognizes the existence of the inequality on the society, hence, it is the duty of the government to enact laws that may benefit the common good of the society. This enactment must remove or at least reduce the inequalities existing on the society most especially in terms of social, economic, and political inequalities. Legislators should prioritize the enactment of laws that would benefit the poor and those who are less favored in the society. They should defend the rights of the poor against the rich if abuses happen on their inherited natural rights and ownership. Likewise, the rich should also be protected by the constitution against the poor if injustices between them happen. In other words, human rights must be prioritized in any circumstances. At the same time, equal treatment should prevail in order to prevent both extremes to happen. The state, moreover, should prioritize the enactment of laws for the poor. Legislators must keep in mind the situation of the least advantaged in society and present laws that would, if not remove, at least reduced the percentage of poverty. Hence, the aim of the constitutional mandate is “to bridge the gap by assuring that more people will be able to satisfy the basic needs of decent living and to maintain human dignity and self-respect.”[17] In terms of economic inequalities, the aim of the constitution is not to remove the inequalities in the society but to reduce the possibility of this inequalities by “raising the quality of life of the less fortunate members of the society to a level of worth of human dignity.”[18]
ii. Philippine Comprehensive Tax Reform Program
On his State of the Nation Address (SONA), Philippine President, Rodrigo Duterte promised to the people that there will be a reformation on the Philippine economy within his tenure. He promised to have tax reforms which aim to have an efficient and equitable tax system in the Philippines.[19] As a result, On December 19, 2017, the Philippine president signed the first part of the comprehensive tax reform program entitled Tax Reform for Acceleration and Inclusion Law (TRAIN Law).[20] The law was implemented on January 1, 2018 in order to provide amendments to some provisions of the National Internal Revenue Code of 1997 particularly on the tax on individuals’ personal income, income for individuals and corporations, estate tax, donor’s tax, value-added tax, excise tax, documentary stamp tax, tax administration and other taxes which every individual may have including on those sweetened products and products and procedures related to cosmetics.[21] The economic reformation, moreover, is divided into six phases of implementation. The first part is already passed in the Congress and applied to the society on the first day of January 2018 while the others are still a bill and subject for some changes and amendments to ensure the common good in the Philippine society. This study, however, focuses on the Package 1 of the TRAIN which already implemented on the Philippine society.
iii. The Aims of TRAIN Law Package 1
TRAIN Law aims to create fund for establishing infrastructures and social programs that benefit the poor.[22] According to the law, moreover, it aims “to enhance the progressivity of the tax system of the Philippines, to provide equitable reliefs for the greatest number of taxpayers, and to ensure that the government is able to provide for the needs of those under its jurisdiction.”[23] It also has the vision to decrease the poverty rate from 21.6% to 13-15%, which practically speaking, will uplift 6 million Filipinos from poverty by the year 2022 and eradicate extreme poverty by the year 2040. It also aims to simplify the personal income tax (PIT) system of the Philippines. First, there is a rule that the take-home pay or the income of individuals given by their employer will not be reduced due to taxes. Those people who have a gross income, not over Php 250,000.00 are exempted on the imposition of taxes. Those people who have a gross income exceeding Php 250,000.00 but not over Php 400,000 will receive the imposition of tax by 20%.[24] With this system, those people in the middle class and upper class of the society have the increases on their taxes based on the gross income which they received annually while those people who are on the lower class will retain their salary without any tax deduction. If an individual receives a gross income of Php 10,000.00 monthly, then he will no longer be taxed. On corporate income tax, TRAIN Law removes the Philippine Charity and Sweepstakes Office (PCSO) from the list of tax exempted corporation owned by the government. PCSO, therefore, has 20% imposition of tax on the office itself and to those lotto winners who receive a prize worth exceeding Php 10,000.00. Thus, if an individual won 20,000 from lotto, he must give the Php 4,000.00 of his winning prize to the government because of tax. On value-added tax (VAT), TRAIN 1 develops the VAT system by limiting exemptions to the sales of goods and services most especially to senior citizens and persons with disabilities. It also includes the tax exemptions on the sale of drugs and medicines particularly on those related to diabetes, high cholesterol, and hypertension which will be applied on January 1, 2019. Despite these of the decreases on the taxes of necessities, there are also increases on the tax imposed on Cigars and Cigarettes, petroleum products, automobiles, cosmetic products, and sweetened beverages. To explain further, cigars and cigarettes will be taxed Php 32.50.00 per pack as of January 1, 2018, but tax imposition will increase by Php 40.00 by January 1, 2022. Likewise, automobiles and petroleum products will be taxed by January 1, 2018, until January 1, 2020. With these aims, furthermore, the present country’s administration wants to raise a fund for a total of Php 9 trillion for the massive “build, build, build” program which expected to open new job opportunities for the people every year. If this program became successful for the succeeding years of implementation, the National Economic and Development Authority (NEDA) estimated that this program may contribute contributes as much as PHP 31.2 trillion to the economy over the next five years.”[25]
John Rawls’ Political Theory and the Difference Principle
John Rawls is one of the influential political philosophers of the twentieth century.[26] He was known with his work entitled A Theory of Justice which serves as an eye-opener to the late modern and contemporary social and political thinkers. It is because of its rigorous defense of liberalism against the traditional culture of utilitarianism. Rawls, with his theory, aims to move the idealism of traditional contract theory as represented by Locke, Rousseau, and Kant from abstraction. He made a theory that shows an alternative systematic account of justice which is, for him, superior to the dominant utilitarian tradition and he called it Justice as Fairness.[27] This theory is constructed for the basic structure of a modern constitutional democracy as an alternative to the tradition of utilitarianism. He aims to have a well-ordered society where there is a system of cooperation between social, economic and political institutions, a society that promotes equality of rights and liberty among the citizens and establishes an equal opportunity between individuals. Rawls argues that “A theory however elegant and economical must be rejected or revised if it is untrue; likewise, laws and institutions no matter how efficient and well-arranged must be reformed or abolished if they are unjust.”[28] In other words, for Rawls, justice of the society is the priority in establishing laws for the society.
i. Basic Structure of the Society
John Rawls introduced the idea of basic structure of society as the primary subject of justice. The basic structure, for him, is a way in order to establish cooperation between social institutions in applying the principles of justice in the society. [29] It is “a public system of rules defining a scheme of activities that leads men to act together so as to produce a greater sum of benefits and assigns to each individual certain recognized claim to a share in the proceeds.”[30] It plays an essential role in forming a society because the basic structure is present from the time of birth until the death of an individual. It also serves as the backbone of the society because it influences people in shaping his aims, aspirations, and character as he grows as a social being.[31] The basic structure is different from the social institutions like government, hospitals, universities and other social institutions because the basic structure is a framework in order to have a unified principle of justice between social institutions. Although social institutions have different nature of service, principles of justice must be applied and unified based on the deliberation of parties in order to establish social cooperation in the society. The basic structure as Rawls stated, helps the political and social institutions to ensure social cooperation among the members of the society.
ii. Two Principles of Justice
John Rawls introduced the two principles of justice which he aims to be applied to the background institution and to the minds of people deliberating for the principles of justice. These are:
“(1) each person has the same indefeasible claim to a fully adequate scheme of equal basic liberties, which scheme is compatible with the same scheme of liberties for all; (2) Social and economic inequalities are to satisfy two conditions: first, they are to be attached to offices and positions open to all under conditions of fair equality of opportunity; and second, they are to be to the greatest benefit of the least advantaged members of society (the difference principle).”[32]
The purpose of these two is to have firm basis or principles in mind as they agree for the principles that will set justice in the society. “The primary subject of justice is the basic structure of the society, the arrangement of major social institutions into one scheme of cooperation.”[33]
To elaborate further, these principles must be ordered lexically in applying to the basic structure of the society. The first principle prior to the second principle and those principles that underlie the second principle must also be ordered lexically in its application. The first principle aims to establish a set of rules which promote basic liberty and equality among the citizens in the society.[34] With this principle, Rawls wanted to remove the distinction and classification of people in the social realm and promote social justice that may help those people who are disadvantaged in life to become at least more advantage in the laws which government enact.[35] On the other hand, assuming that the first principle is applied, the second principle, also known as opportunity and difference principle, must be understood in the fact that there are social institutions who cannot prevent injustices. With this, in this principle, inequality is permissible as long as this inequality can also benefit everyone most especially those least advantaged in life.[36] This principle aims to have an equal distribution of offices and work position among individuals that may fit their natural talents for the common benefit of the society.
iii. Rawls’ Notion of Justice as Fairness
Rawls’ notion of two principles of justice may be used in order to decipher his notion of justice. On one hand, his first principle shows that each individual has equal liberties which are the same liberties other people have no matter what their social class is. Each individual has an inviolable rights and liberties that must be protected by every individual. This idea of Rawls shows his concept of equality. On the other hand, in his second principle, he acknowledges that social and economic inequality can never be demolished or removed from the society. However, he introduces this idea in order to have justice despite these social and economic inequalities. For him, there must be an equal opportunity for all people in the society and economic inequality must be for the greatest benefit of those who are disadvantaged in life. This idea of Rawls shows equity since he considered the greatest benefit of those who are disadvantage in life. Hence, Rawls viewed justice as fairness. As he stated, his two principles must be in lexical order. One must satisfy the first principle before the second. In other words, one must satisfy first the equality between individuals and later on equitably satisfy the second so that fairness may be attained. He aims to have a system of cooperation in that is bounded by the fair terms agreed by those people in the original position.
iv. Original Position
Rawls acknowledges the reality that there are diversity and plurality in society. With this, he argues that in order to have justice in a democratic society, citizens which are free and rational must have an agreement started in an initial position or a hypothetical situation where the principles of justice must be agreed with a common interest. Rawls called this initial hypothetical situation as the “Original Position.”[37] In this position, one must think of themselves as he is on the original state of nature or as an individual living from the time where there are order, justice, equality, and peace in everything. Then, one will think of an ideal state in which there is an order which can be sustained by people through the principles of justice. The purpose of this idea, according to Rawls, is to represent equality between individuals in a democratic society. He used a procedural justice in elucidating his theory to which is also the reason why Original Position has a procedure in order to form a social contract and agreed for the principles of justice. Since there is diversity of individuals in forming an argument, nonetheless, there are also biases which may arise in forming this contract, John Rawls, however, introduced another idea in order to support his notion of Original Position and he called it the Veil of Ignorance.[38] In this veil, citizens will set aside temporary their preconceived biases, beliefs, or any particular facts about particular knowledge about themselves like what he looks like, what his social status, wealth or even history of his own life and the generation where he belongs to the present.[39] The purpose of this restriction in knowledge in the Original Position under the veil of ignorance is to see other individuals as free and equal moral being which are also capable for the sense of justice. However, although there are constraints in their knowledge and giving judgment, the general facts which they know before still remain in their mind. Rawls did not set restrictions for an individual to know any general knowledge that may help to set the principles of justice like the general laws and theories. It is because the conception of justice, for Rawls, must be made for the characteristic of a system of social cooperation which they will be regulated upon. They still know that they must protect their liberties, give equal opportunities and form a social contract and agree for an alternative to utilitarianism.
v. Primary Goods
John Rawls views the person as a rational individual. He assumed that although they are rational and know their plans in life, they do not know what are the particular details of this plan and since they are deprived of information as stated in the original position. They still know, however, general principles and the two principles of justice rooted in the social primary goods which help them to ensure justice among the society.[40]
Primary social goods as discussed by John Rawls are the things which man values most in his life. These are the needs rather than wants or the things that an individual must have in order to ensure equality in a society. As Rawls defined these goods are: basic rights and liberties, opportunities open for all, income and wealth and self-respect.[41] These are the primary goods in relation to the basic structure because these are the goods necessary for an individual as a citizen. These are not the things they desire to have in order to be superior to others, these goods, rather, are the things needed as free and equal person living in a democratic society. These goods depend, as Rawls’ stated, “on various general facts about human needs and abilities, their normal phases and requirements of nurture, relations of social interdependence, and much else”[42] Furthermore, according to Rawls, “once this theory is worked out and the primary goods accounted for, we are free to use the principles of justice in the further development of what I shall call the full theory of the good.”[43] Hence, these primary goods are the things that remain on the individuals which undergo the process of Original Position under the Veil of Ignorance since primary goods are the also the basis of the principles that will deliberate in the Original Position.
vi. Least Advantaged
Least advantaged individuals are those people who is worst-off in one aspect of social cooperation. As Rawls defines this term it refers to “those belonging to the income class with the lowest expectations.”[44] Now, the question is, how can people identify who is or who are the least-advantaged? In response, according to Rawls, least advantaged are not only identifiable solely with their income and wealth, gender, race, nationality, and the like, but those least advantaged are those people who are worst-off under a particular scheme of cooperation.[45] in other words, these are people who cannot comply to the demands of a particular aspect of social cooperation. These are those people who has low potential to comply to the demands of the social cooperation for example in economic aspect. However, these individuals may be not worst-off in the other aspect for example in politics. In short, Although an individual is worst-off in one aspect, he can be well-off to the other.
vii. Fair Equality of Opportunity
As stated on the second principle introduced, Social and economic inequalities are to satisfy that people are “to be attached to offices and positions open to all under conditions of fair equality of opportunity.” The question, however, what is the fair equality of opportunity? This principle requires that social injustices particularly the discrimination on job opportunities must be removed. According to Rawls, “fair equality of opportunity is said to require not merely that public offices and social positions be open in the formal sense, but that all should have a fair chance to attain them.”[46] The chance in which Rawls pertains to is the equality in attaining success of those people who are willing to use their talents and abilities for the common good of the society despite of their social class or origin. This also mean that the “inequalities resulting from arbitrary social circumstances are unjust and should be counteracted whereas those resulting from natural talents are justified.”[47]
The Difference Principle
One of these two is the principle which pertains to the arrangement of social and economic inequalities to be everyone’s advantage (Second Principle) which also called as the Difference Principle. This principle is said to be more egalitarian than the principle of equality of opportunity. Egalitarian, in this sense, means that it promotes equality of rights and opportunities than the principles of equality of opportunity. This principle requires that no matter how great the inequalities exist in income and wealth may be what is essential is that these inequalities must be for the greater benefit of the least advantaged in the society. Moreover, one of the features of the difference principle is the Maximin Rule which explains that the worst possible outcome will be ranked and the best alternatives among this possible outcome that benefits even the most disadvantaged in the society must be chosen.[48] Rawls thinks that through the difference principle, the problem of social justice that manifest on economic inequality may be resolved. According to Rawls, furthermore, “A further point is that the difference principle expresses a conception of reciprocity. It is a principle of mutual benefit. At first sight, however, it may appear unfairly biased towards the least favored.”[49]
These principles of justice must be arranged and applied to the society lexically meaning that the first principle must be applied and satisfy first before the second. Likewise, since the second principle also has underlying principles, the first principle of the second principle must be attained first before the second. In other words, the principle of fair equality of opportunity must be applied first to social institutions and once reached, then the difference principle must be applied.
The Parallelism between the Philippine TRAIN Law 1 and Rawls’ Difference Principle
Despite the idealistic presentation of the TRAIN Law, criticisms arise because of its short-term effects on the society. Although taxes imposed on the people who receive an income lower than Php 250,000 are removed in order to increase the take-home pay of those people in the labor sector, the government, however, imposed an increase on excise tax which affects the common necessities of individuals.[50] For example, there is an increase in the price of fuel products and automobiles. With his increase, it will affect the transportation of goods which later on affects the prices of the basic commodities on individuals. The increase of taxes, although indirect, may affect those people in the lower sector which is also the reason why those people find it difficult to adjust on the unexpected increase of taxes on the products since their income receives only little increase compared to the excise tax imposed. With this issue, nevertheless, there are questions arises from the people regarding the viability and practicability of this law in the country. Questions like is it really attainable? How can this law be implemented? How it affects the society? It is really for the poor? Is it fair?
According to the closing statement of the president, “I am very well pleased to sign this very important piece of legislation mainly because of my sincere objective to help our poor countrymen and ease the burden of the common taxpayers.”[51] In relation to the Difference Principle, according to Rawls, “The difference principle requires that however great inequalities in wealth and income may be, and however willing people are to work to earn their greater shares of output, existing inequalities must contribute effectively to the benefit of the least advantaged.”[52] There are TRAIN Law’s parallelism with Rawls’ difference principle can be seen in its aims for the society. On one hand, since difference principle must satisfy first the first principle of justice, it is necessary to show its first parallelism on the context in which TRAIN Law passed. The government aims to have a simple, efficient and fairer economic system. With this, TRAIN Law, although not explicitly stated on its manuscript, can be parallel on the first principle that was introduced by Rawls because it also satisfies the equality of the basic liberty of all citizens. For Rawls, equality on basic liberties must not be sacrificed no matter how efficient and economical the bill presented, if it violates the first principle then this bill must not be passed. Equality of liberty must at all times takes precedence before other principles of justice. Likewise, In the system of TRAIN Law, because of its effects on the society, there are sellers who levied an additional tax on the products they sell in order to parallelism on the rise of prices. It is written, however, in the constitution that no person shall be deprived of equal liberty and property without due process and at the same time each person has the protection of the laws.[53] In other words, any people have no authority to take other’s property without due process. Any tax imposed on products for private purposes without due process is likely taking someone’s property, therefore, it is not valid.[54] TRAIN Law manuscript does not have any provisions regarding this issue. The constitution, therefore, must take precedence and equality of liberty must be applied.
On the other hand, TRAIN law aims for the society is parallel to the second principle because, on the second principle, Rawls also presents the two parts of this principle in lexical order. Meaning, the fair equality of opportunity must be first to satisfy before applying the difference principle. Fair equality of opportunity aims to remove the inequality of job opportunities given to people. TRAIN Law, likewise, aims to open more job opportunities for the least-advantaged by building social institutions and infrastructures that may open many opportunities to those people who are poor or in Rawlsian term those who are disadvantaged. On the second part of Rawls’ principle, known as the difference principle, Rawls wanted to benefit the least-advantaged members of the society although there are economic inequalities that exist. In relation to the law, economic inequalities exist since according to the law those people who are in the upper class will be taxed higher than those people in the lower class. The lower class, if their income was below Php 250,000.00, they will not be taxed. This shows that economic inequality may let the worst-off better economically than before.
These parallelism presented between the TRAIN Law and the Difference Principles of Rawls shows that there is no viable solution in order to absolutely remove the economic inequalities exist in the society. However, there is a viable way in order prevent economic inequalities to worsen the lives of people. This is to establish a law which meant not only for the advantage of most people but for the advantage of all including those who are disadvantaged in life. This Law is a law made by human convention or social contract through the process of Original Position under the Veil of Ignorance in order to ensure its legitimacy, stability and practicability in the society. If this process done with its underlying principles, I think, fairness, as John Rawls introduced, may be attained in the society most especially in terms of social and economic inequalities.
Conclusion
John Rawls’ principles of justice particularly the second principle sets a firm philosophical foundation for the implementation of the TRAIN Law in the Philippines. In this paper, the researcher sees that the implementation of TRAIN Law and the notion Rawlsian Difference Principle has a parallelism in the sense that they are both similar in aims and objectives. Since the Difference Principle allows economic injustice as long as it is the best solution to avoid greater inequalities that may happen to society. In relation to the current law that was passed into the Philippine Congress, Train Law is one of the solutions in order to raise the economic status of the state. It aims to decrease the number of those people who are experiencing dilemma financially and give more job opportunities to more people. It imposes additional taxes on those people belong to the middle and higher class of the society who has an annual income of Php 250,000.00 above but remove the taxes of those people who receives lower than the stated value. In other words, what is essential in this law is that those people who are least advantaged will no longer have income tax while those in the higher class has the burden of payment. This inequality is allowed, in Rawls’ principle, since it benefits the worst-off in the society or the least advantaged. Through this analysis, the researcher understands that though the Philippine government aims for a better economic system, nonetheless, inequalities can never be fully demolished but there are ways on which this inequality may be reduced to advance the good not only of the rich but also of the poor. TRAIN Law is one of those ways but it is necessary to know that even TRAIN Law is not perfect as the difference principle but despite its imperfection, it is for the common good of all people.
In final analysis, after deciphering the comparison of the Philippine TRAIN Law and Rawlsian Difference Principle, the proponent of this research comes to know that, the dilemma in this law, however, it is not on its aims and objectives but on the current situation of the society in its short-term effect. TRAIN law is a long-term project of the Philippine government but those people in the lower sector of the society find it difficult to adopt in the short term changes it made in the economy. It seems that legislators neglect to provide provisions for the short-term effect of this law in the society most especially for the poor. Those lawmakers should make some adjustment regarding the imposition of the law to the people and in order to have a common ground between the authority and the people, the social contract between legislators must be established, and people must be knowledgeable in its process. Because if not, this law must be demolished since it is unjust to the less advantaged. According to Rawls, “A theory however elegant and economical must be rejected or revised if it is untrue; likewise, laws and institutions no matter how efficient and well-arranged must be reformed or abolished if they are unjust.”[55] Rawls theory, if applied in the society, should be with its entirety in order to ensure the fairness of laws that will be passed for the common good of the society. In terms of passing laws for the economy and welfare of society, it should be first secure the equality of liberty and rights of each individual and for everyone’s advantage in which even the least-advantaged or the poor may benefit to this law because no matter what is the social class of an individual, no matter if he is poor or rich or black or white, what is essential see is that each individual must be respected and treated equally “For man is the source, the center, and the purpose of all economic and social life.” [56]
[1]Good News Pilipinas Team. “PHL Economy Remains Vibrant, Still one of Asia’s Fastest Growing.” Good News Pilipinas. https://www.goodnewspilipinas.com/phl-economy-remains-vibrant-still-one-of-asias-fastest-growing/ (ac-cessed November 2, 2018). “The Philippines is still among the fastest-growing economies in Asia, after Vietnam’s 7.38%, and at par with China’s 6.8%.”
[2]Hector S. De Leon and Hector M. De Leon, Textbook on the Philippine Constitution (Manila, Philippines: Rex Printing Company Inc., 2014), 600.
[3]This law is the Tax Reform for Acceleration and Inclusion Law or TRAIN Law. The law provides for the amendments to several provisions of the National Internal Revenue Code of 1997 (NIRC of 1997) on personal income taxation, passive income for both individuals and corporations, estate tax, donor’s tax, value-added tax (VAT), excise tax, documentary stamp tax (DST), and tax administration, among others. It likewise introduced new taxes such as the excise tax on cosmetic surgery and sugar-sweetened beverages. Republic of the Philippines Department of Finance, “Highlights of Republic Act No. 10963” NTRC Tax Research Journal 29, no.6 (November to December 2017). http://www.ntrc.gov.ph/20-journal/102-national-tax-research-journal-archives#2017 (accessed October 16, 2018).
[4]Carlos D. Dominguez, Philippine Department of Finance official TaxReform Homepage Header, https://www. dof.gov.ph/taxreform/ (date accessed, November 02, 2018).
[5]Thomas Pogge, John Rawls: His Life and Theory of Justice (New York: Oxford University Press, 2007), 27.
[6]“Each man is also a member of society; hence he belongs to the community of man. It is not just certain individuals but all men who are called to further the development of human society as a whole.” Pope Paul VI, Populorum Progressio: On the Development of Peoples (1967), §17.
[7]“The dignity of the individual and the demands of justice require, particularly today, that economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner.” Pope Benedict XVI, Caritas in Veritate: On Integral Human Development in Charity and Truth (2009), §32.
[8]“When there is question of defending the rights of individuals, the defenseless and the poor have a claim to special consideration. The richer class has many ways of shielding itself, and stands less in need of help from the State; whereas the mass of the poor have no resources of their own to fall back on, and must chiefly depend on the assistance of the State. It is for this reason that wage-earners, since they mostly belong to the latter class, should be specially cared for and protected by the Government.” John Paul II, Centinus Annus: On the Hundredth Anniversary of Rerum Novarum (1991), §10.
[9]United States Conference of Catholic Bishops, Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. Economy (1986), §28.
[10]In this declaration, the legislative department in the government was abolished and was overpowered by the executive department which was handled solely by the president. Moreover, “the president’s decrees, directives, and instructions partook of the nature of laws.” Teodoro Agoncillo, History of the Filipino People 8th ed. (Quezon City: C & E Publishing, Inc., 2012), 595.
[11]“The regime of martial law went almost 10 years, lifted only on January 17, 1981, during which, under a new constitution, Marcos was able to extend his term until 1986, when he was forced, with his family, to abandon the Philippines on the throes of the EDSA Revolution.” Romualdo Abulad, “Diskursong Tomasino Thomasian Debaters’ Council Forum” (paper presented at the Seminary Gymnasium of the University of Santo Tomas, Manila, on 11 March 2017).
[12]“The Legislative branch is authorized to make laws, alter, and repeal them through the power vested in the Philippine Congress. This institution is divided into the Senate and the House of Representatives. The Executive branch carries out laws. It is composed of the President and the Vice President. The Judicial branch evaluates laws. It holds the power to settle controversies involving rights that are legally demandable and enforceable. This branch determines whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part and instrumentality of the government. It is made up of a Supreme Court and lower courts.” Philippine Information Agency Management, “Three Branches of the Government, 2018.” Philippine Information Agency, https://pia.gov.ph/branches-of-govt (accessed October 31, 2018).
[13]Hector S. De Leon and Hector M. De Leon, Textbook on the Philippine Constitution, 28-45.
.
[14]“A bill of rights may be defined as a declaration and enumeration of a person’s basic rights and privileges which the constitution is designed to protect against violations by the government, or groups of individuals.” Ibid., 125.
[15]Ibid.
[16]1987 Philippine Constitution, art. 13, sec. 1.
[17]Hector S. De Leon and Hector M. De Leon, Textbook on the Philippine Constitution, 602.
[18]Ibid., 600.
[19]“On taxation, my administration will pursue tax reforms towards a simpler and more equitable and more efficient tax system that can foster investment and job creation. We will lower personal and corporate income tax rates and relax the Bank Secrecy Law.” Philippine President, State of the Nation Address 2016: To the Congress of the Philippines, Delivered at Batasang Pambansa Complex, Quezon City, July 25, 2016. http://www.official gazette.gov.ph/2016/07/26/the-2016-state-of-the-nation-address/ (accessed October 31, 2018).
[20]“On taxation, my administration will pursue tax reforms towards a simpler and more equitable and more efficient tax system that can foster investment and job creation. We will lower personal and corporate income tax rates and relax the Bank Secrecy Law.” Ibid.
[21]Philippines. Republic Act No. 10963 (as Amended by Republic Act No. 8424): Tax Reform for Acceleration and Inclusion (TRAIN). (Metro Manila, Philippines: Malacañang, Bureau of Internal Revenue, Republic of the Philippines, 2017) Sec. 1-86.
[22]In this work, the term “poor”, “worst-off”, and the “least advantaged” are interchangeably used but these terms are pertain to those people who are economically challenged in their lives.
[23]Republic Act 10963, Tax Reform for Acceleration and Inclusion Law, Sec. 2, 1-3.
[24]Gross income pertains to the total income received by the employer while the net income pertains to the total income that comes up after subtracting the deductions from the gross value. In order to see the net value, one must subtract all the deductions like medical expenses, insurance payment, and other taxes made by law from the gross value.
[25]“The Duterte administration intends to spend PHP9 trillion on its massive infrastructure program which is expected to generate about 1.1 million new jobs every year. The National Economic and Development Authority (NEDA) also estimated the “Build, Build, Build” program contributes as much as PHP31.2 trillion to the economy over the next five years.” Leslie Gatpolintan, “TRAIN Law beneficial to PH:Pernia” Philippine News Agency, July 8, 2018. https://www.pna.gov.ph/articles/1040756 (accessed November 27, 2018).
[26]Thomas Pogge, John Rawls: His Life and Theory of Justice, 2-21. John (Jack) Bordley Rawls was born on February 21, 1921 into a wealthy and politically active family in Baltimore, Maryland. At his early age, his sense of justice was awakened as he noticed that there were racial discrimination between black Americans and white Americans in their society. He noticed that his black American playmate has a different school separated and inferior compare to his school. Later on, Rawls entered Princeton University in 1939 and graduated summa cum laude in philosophy on January 1943. He was deeply influenced by Wittgenstein’s student Norman Malcolm most especially in his philosophical ideas. However, because of the world war happened in his time, he entered the army to support his own country and became an enlisted man in the infantry. Consequently, because of his experiences in the war and his solid stand for justice, he decided to return to Princeton in 1946 and continue his graduate work in philosophy. He also granted a fellowship on 1949-50 academic year. He also attended several seminars regarding economics, U.S. political idealism, and constitutional law. He also taught for two years as an instructor in the Department of Philosophy of Princeton University. Later on, he became an associate professor in Cornell University at Oxford in 1956. He was also being invited for a one-year visiting professorship at Harvard where he taught for almost 30 years (from 1962 until 1991). He died on November 24, 2002, because of his illness. However, his legacy in philosophy leaves an indelible mark not only in the minds of his countrymen but also to the history of political and moral philosophy. John Rawls discussed his moral and political ideas in his works entitled A Theory of Justice (1971) , Political Liberalism (1993), The Law of Peoples (1999), Justice as Fairness: A Restatement (2001).
[27]For Rawls, “One practicable aim of justice as fairness is to provide an acceptable philosophical and moral basis for democratic institutions and thus to address the question of how the claims of liberty and equality are to be understood.” John Rawls, Justice as Fairness: A Restatement (Cambridge: Harvard University Press, 2001), 5.
[28]John Rawls, A Theory of Justice Revised ed., (Cambridge: Harvard University Press, 1971), 3.
[29]“The basic structure of society is the way in which the main political and social institutions of society fit together into one system of social cooperation, and the way they assign basic rights and duties and regulate the division of advantages that arises from social cooperation over time.” Rawls, Justice as Fairness: A Restatement, 10.
[30]Rawls, A Theory of Justice, 74.
[31]“The basic structure is the background social framework within which the activities of associations and individuals take place. A just basic structure secures what we may call background justice.” Ibid.
[32]John Rawls, Justice as Fairness: A Restatement, 42-43.
[33]“An institution exists at a certain time and place when the actions specified by it are regularly carried out in accordance with a public understanding that the system of rules defining the institution is to be followed.” Rawls, A Theory of Justice, 47-48.
[34]This principle is similar to the provision of Philippine Constitution regarding social justice “The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good” 1987 Phil. Constitution, art. 13, sec. 1.
[35]This principle if put in the Philippine context, will includes all that was stated in the Bill of Rights particularly the right to vote and hold office, freedom of speech & assembly, liberty of conscience and freedom of thought; freedom of person; Right to Property; Freedom from arbitrary arrest or seizure and so on.
[36]To support this argument Rawls stated at the beginning of his discussion that “an injustice is tolerable only when it is necessary to avoid an even greater injustice.” Rawls, A Theory of Justice, 4.
[37]“The idea of Original Position is proposed, then, as the answer to the question of how to extend the idea of a fair agreement to an agreement on principles of political justice for the basic structure. That position is set up as a situation that is fair to the parties as free and equal, and as properly informed and rational.” Rawls, Justice as Fairness, 16.
[38]Rawls assumed that the parties in the Original Position are situated under the veil of ignorance. This veil meant to set limitations on one’s knowledge in order to prevent biased judgement while deliberating principles of justice for the society. This will set one’s knowledge on general perspective because for Rawls, if the particulars is allowed in deliberating principles of justice then judgment may be biased. Rawls, A Theory of Justice, 118-122.
[39]“The persons in the original position have no information as to which generation they belong.” Ibid., 118.
[40]Rawls used this notion of primary social goods with the second principle or the difference principle because he admits the fact that there are interpersonal comparisons happening between individuals in the society and these comparisons can also lead to utilitarianism because it obscures the real question “whether the total happiness is to be maximizes in the first place”. Hence, in order to settle this dilemma regarding interpersonal comparisons, he also made two objective grounds for the difference principle. First, “as long as we can identify these least advantaged representative man, only ordinal judgements of well-being are required from then on.” In other words, “We know from that position the system is to be judged.”; second, the difference principle introduces a simplification for the basis of interpersonal comparisons. These comparisons are made in terms of expectations of primary social goods. Ibid., 78-79.
[41]For Rawls, self-respect does not mean that it is an attitude towards the self but it means an acknowledgement of the fact that all citizens has equal basic rights. It is a form of reciprocity. Rawls, Justice as Fairness: A Restatement, 60.
[42]Ibid., 58.
[43]Rawls, A Theory of Justice Rev. ed., 348.
[44]According to Rawls, moreover, “to say that inequalities in income and wealth are to be arranged for the greatest benefit of the least advantaged simply means that we are to compare schemes of cooperation by seeing how well-off the disadvantaged are under each scheme and then to select the scheme under which the least advantaged are better off than they are under any other scheme.” Rawls, Justice as Fairness, 59.
[45]Ibid., 59-60.
[46]Rawls, Justice as Fairness: A Restatement, 43.
[47]Catherine Audard, Philosophy Now: John Rawls (India: Cromwell Press, Trowbridge), 102.
[48]The term “maximin” means the maximum minorum which means, as Rawls used it, maximizing the minimum. For Rawls, “The maximin rule tells us to rank alternatives by their worst possible outcomes we are to adopt the alternatives the worst outcome of which is superior to the worst outcomes of the others” Catherine Audard, Philosophy Now: John Rawls, 133.
[49]Rawls, A Theory of Justice Rev. ed., 88.
[50]“Everybody eats, uses electricity and commutes on a daily basis. The tax reform is not helping but adds burden to the minimum wage workers as prices for these commodities strikes while their salaries stay the same. The poor will become poorer, and more will be,’ said Sapar.” Ivy Jean Tupas, “TRAIN Law is a burden, not a gift-critics,” Davao Today, July 8, 2018 http://davaotoday.com/main/davao-city/train-law-is-a-burden-not-a-gift-critics/ (accessed November 27, 2018).
[51]President, Proclamation, “Republic Act No. 10963 or Tax Reform on Acceleration and Inclusion (TRAIN) Act, Amending National Internal Revenue Code 1997,” December 19, 2017.
[52]Rawls, Justice as Fairness: A Restatement, 64.
[53]“No person shall be deprive of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws” 1987 Philippine Constitution, art. III sec. 1.
[54]Hector S. De Leon and Hector M. De Leon, Textbook on the Philippine Constitution, 133.
[55]Rawls, A Theory of Justice Rev. ed., 3.
[56]“Gaudium et Spes” in Documents of the Vatican II Council, ed. James H. Kroeger, M.M. (Philippines: Paulines Publishing House, 2011), §63.
