A FAMOUS quote about taxes originated with Benjamin Franklin, 'Nothing is certain except death and taxes.' Over 200 years later, it still rings true. Although taxes on income and profits can almost never be avoided, there are a number of ingenuous exceptions and ways to avoid them. I believe this is the reason why Finance Secretary Carlos Dominguez 3rd, speaking at a general membership meeting of the Financial Executives Institute (Finex) stated that he does not favor a wealth tax. He shared a story of his French friend who simply transferred his holdings to another country when France decided to levy additional taxes. Dominguez suggested instead an increase in real property taxes since land cannot be transferred to another country. He specifically cited as examples the disparity between market values and assessed property values along Ayala Avenue and Forbes Park. This is an opportunity that we are missing out on. Dominguez, however, intimated the realistic view that this lies in the purview of local government units and realizes that despite the obvious financial advantages, this would not have popular support and local officials will be faced with a dilemma, which could be anathema to their political survival.

I am getting ahead of myself though since the title of this article is debt and taxes. I believe there is a corollary adage that rising government debt will be followed by rising taxes. I just don't see any other way out of this predicament. In his talk about Completing the Fiscal Consolidated Plan, Dominguez described the unprecedented borrowings that were made in the last two years. He believes that the first thing that should be addressed by the incoming administration is to outgrow the country's debt at the soonest possible time to lower its share in relation to the gross domestic product (GDP). The ratio of the national debt spiked to 60.5 percent in 2021 from a historic low of 39.6 percent in 2019. Dominguez explained that the government had to resort to emergency borrowings to cover the massive cost of Covid-19 response, as well as the corresponding drop in revenues, resulting from the mobility restrictions and the global economic slowdown. The only way to make this sustainable is by growing the economy faster and investing in the future. Being the astute businessman that he is, Dominguez stated that the fiscal deficit has to be lowered and new debt should be used for infrastructure investments. He was simply prescribing a finance principle that debt should be used for capital expenditures and that operating income should be sufficient to fund current operations. The big question is how will we ever get out of this deficit that is foreseen to remain for the next couple of years?