Trump’s proposal of zero tariff in G7

This is good. Zero tariff, keep non-tariff barriers/measures to the minimum. EU, Japan, Canada, China, dare — game?

“We should at least consider no tariffs, no barriers — scrapping all of it,” Trump said, according to officials who were listening and taking notes.

Trump floated the idea — which was received as somewhat rhetorical — as the meeting was breaking up and was quickly challenged by Canadian Prime Minister Justin Trudeau, who asked, “What about subsidies?”

“No tariffs, no barriers, that’s the way it should be — and no subsidies,” the president said at a press conference, before taking questions.

“We don’t want to pay anything — why should we pay?” Trump said. “Ultimately, that’s what you want. You want a tariff free, no barriers and you want no subsidies.”

“No tariffs, no barriers, that’s the way it should be, and no subsidies,” Trump said during a 30-minute press conference on the sidelines of the meeting in La Malbaie, Quebec. “I did suggest it and people were — I guess they’re going to go back to the drawing board and check it out.”

“No tariffs, no barriers — that’s the way it should be. And no subsidies,” Mr Trump said at a brief press conference before departing from the G7 summit at the Québec resort town of La Malbaie. “We’re like the piggy bank that everybody’s robbing, it’s got to end.”

“Also on Friday, Trump floated the idea of ending all tariffs and trade barriers between the US and its allies – a pitch that wasn’t exactly expected, according to Politico. Trump offered the proposal at the end of a “contentious” meeting on trade disputes. Most G-7 members remain furious with Trump over his decision to impose tariffs on aluminum and steel imports, and his threats to impose more trade restrictions. Merkel responded positively to Trump’s suggestion, saying she would consider it.”

zero tariff
Other reports:

Tweets by @realDonaldTrump, June 8:

Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers. The EU trade surplus with the U.S. is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.

Prime Minister Trudeau is being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things…but he doesn’t bring up the fact that they charge us up to 300% on dairy — hurting our Farmers, killing our Agriculture!

Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!

Tweets by @realDonaldTrump, June 10:

Just left the @G7 Summit in beautiful Canada. Great meetings and relationships with the six Country Leaders especially since they know I cannot allow them to apply large Tariffs and strong barriers to…

…U.S.A. Trade. They fully understand where I am coming from. After many decades, fair and reciprocal Trade will happen!

The United States will not allow other countries to impose massive Tariffs and Trade Barriers on its farmers, workers and companies. While sending their product into our country tax free. We have put up with Trade Abuse for many decades — and that is long enough.

Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!

PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!

Zero tariff is good, it is happening. EU countries have zero tariff among themselves; ASEAN countries have zero tariff among themselves too; other regional blocs in Asia, S. America, Africa, Europe (like EFTA) do it among themselves; also various bilateral FTAs. However they don’t do it with countries outside their regional blocs and bilateral FTAs, they practice protectionism. Except HK which has zero tariff for all countries except for a few regulated products (guns, bombs, chemical/poisonous substances,…)

The anti-trumpistas just hate any policy he takes. If he slaps high tariffs to trade partners, they are angry. If he suggests zero tariff, they are still angry. Seems they are more confused, more double-talkers than the man they hate.


Why low or zero income tax can mean more development

* This is my article in BusinessWorld last January 29, 2018.


“The people are hungry: It is because those in authority eat up too much in taxes.

When the government is too intrusive, people lose their spirit.”

— Lao Tzu, or Laozi
(6th-5th century BC)

The good news about the new tax law called TRAIN (Tax Reform for Acceleration and Inclusion) is that overall personal income tax (PIT) rates have declined. The bad news is that the high rates of 30% and 32% were retained, and an even higher rate of 35% was introduced for incomes P8 million a year or higher.

In a period of growing global tax competition, growing decentralization if not disintegration by big governments and countries, economies should introduce low taxes.

Currently, Asian economies with low, flat income tax rates are Mongolia with only 10%, Macau with 12%, and Hong Kong with 15%.

Currently too, there are 10 countries and/or jurisdictions around the world that have zero income tax policy.

Eight of them are in the table below, the two others, Bermuda and Cayman islands, have no available data in the IMF and WEF reports. Hence, they are not included in the table. The global rank and score in the World Economic Forum’s (WEF) annual Global Competitiveness Index (GCI), pillar #1 — Institutions, would represent or proxy for the rule of law of countries included in the report (see table).


These numbers show the following:

  1. Citizens of zero income tax countries on average are actually richer (except Bahamas) than people of countries that impose and collect income taxes.
  1. Zero income tax countries on average have high scores and rank in the WEF’s GCI (except Kuwait), in institutional strength. The same pattern is also observed for developed Asia except South Korea.
  1. Developing and emerging Asia like the ASEAN 5 in the above table have lower scores and global ranking, except Malaysia.

One lesson here is that it is the rule of law, the stability and predictability of institutions, public and private, that largely determine an economy’s wealth and prosperity. Not higher taxes and welfarism, not more regulations and endless subsidies.

These countries like Qatar, Brunei, and United Arab Emirates, even Singapore and Hong Kong, are not known for their big mountains and waterfalls, many white sand beaches and sprawling golf courses. They are known for their liberal and secure investment policies that properly respect and protect private property rights, especially big investments and projects, and non-intrusive tax policies.

Currently, the Department of Finance (DoF) is preparing TRAIN 2, focus on lowering the corporate income tax (CIT) rate from 30% to 25% but with fewer fiscal holidays and exemptions. The goal of DoF is to have a “revenue neutral” law, reduce revenues on one side to be compensated by additional revenues on the other side.

Since the Duterte administration is gung-ho on federalism, this will be a good opportunity for them to drastically cut CIT — only 10%, or 15%, little or no exemptions — then allow the regional or state governments to have their own CIT.

The advantage of this setup is that it instills tax and investment competition among the regions and states.

Thus, the future state of southern Luzon for instance will have a CIT of 15%, the state of western Visayas will have a CIT of 10%, the state of northern Mindanao will have a CIT of only 6%, another state will have zero CIT, and so on.

The DoF should align its fiscal priorities with the political priorities of Malacañang and Congress.

TRAIN 1 was lousy because it raised many national taxes or created new ones even if the DoF is aware that soon there will be less national government departments, bureaus, and welfarism to be compensated by more state government departments and welfarism.

Let TRAIN 2 compensate for the short-sightedness of TRAIN 1. Let the national and soon federal government step back as the regional and state governments step forward.

Has East Asia liberalized its trade enough?

* This is my column in BusinessWorld last January 11.

Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. By rewarding ingenuity… it distributes labour most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together by one common tie of interest and intercourse, the universal society of nations throughout the civilized world.

— David Ricardo, Principles of Political Economy and Taxation (1817)

Classical British philosophers and political economists were the pioneer thinkers in articulating the net benefits and advantages of free trade over autarky and protectionism. These include David Ricardo, Adam Smith (“A nation may import to a greater value than it exports for half a century… and yet its real wealth, the exchangeable value of the annual produce of its lands and labor, may, during the same period, have been increasing in a much greater proportion,”) and David Hume (“the increase of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbors.”)

Perhaps it is no coincidence that former British protectorates and colonies in Asia are among the most rabid free traders in the world such as Hong Kong, Singapore, and Brunei.

Among the important indicators of how free an economy to global trade and commerce are (a) the mean and average tariff rates, and (b) standard deviation of tariff rates, which show how wide the variations among tariffs are that indicate high protectionism of certain sectors compared to other sectors.

Hong Kong, Singapore, and Brunei have impressive numbers: zero or very low tariff rates and standard deviation is also zero or very low. This means that there is little or no favoritism and protectionism of certain sectors. As a result, consumers and local producers are given the greatest freedom to choose various products and commodities available from around the world to come into their shores.

Japan, Malaysia, and Taiwan have low tariffs but their standard deviations are in double digits. For their part, the Philippines, Myanmar, and Indonesia have declining tariffs and single-digit variations, which are good.

Thailand, Vietnam, and South Korea seem to have not liberalized fast enough because of their relatively high mean tariffs and high tariff variations (see table).


David Ricardo has articulated the classical definition and theory of “comparative advantage.”

This theory has a beautiful application for developing economies like the Philippines to avoid concentrating their resources — human, financial, and land, among others — on few goals like food “self-sufficiency” when they can diversify their resources and earn higher income from manufacturing, tourism, and other sectors.

These economies can then use surplus and savings to purchase food and other commodities from abroad, especially from neighbors that have better natural endowment in bigger food production.

From the numbers above, there is a mixture of results in trade liberalization by East Asian economies. Overall tariff rates have declined through time but tariff variations have also increased in some countries and economies.

We go back to choosing three pathways to trade liberalization: multilateral like World Trade Organization (WTO), Asia-Pacific Economic Cooperation (APEC), Regional Comprehensive Economic Partnership (RCEP) negotiations; bilateral like Japan-Philippines Economic Partnership Agreement (JPEPA); or unilateral like what Hong Kong, Singapore, and Brunei have done.

The best outcome would be via global and multilateral liberalization under the WTO but this is also the most difficult, most complicated, and most bureaucratic.

After 22 years (1995-2017) of regular global negotiations, there were no major achievements except the Trade Facilitation Agreement (TFA) which needs legislative ratification by all signatory countries.

Unilateral liberalization is the simplest and fastest route to take. Just consider the interests of local consumers and producers in general — to have the widest choices possible in terms of prices and product quality. More choices means more freedom, more savings and by extension, higher incomes.

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.

Federalism dream vs centralized government

* This is my article in BusinessWorld last January 5.


Repeated calls for federalism by the Duterte administration actually point to more centralization of the national government — the complete opposite of what they’re advocating.

Here are some examples.

  1. National taxes have been rising, instead of declining, which could have helped prepare federal states to have their own income and value-added taxes, etc. Instead of lowering the top marginal income tax rate of 32%, it was even raised to 35%. Instead of reducing the VAT to 10% or 8% with few exemptions, the 12% was retained but many sectors were also exempted.
  1. Expanding the number of departments and bureaus instead of reducing them. The Department of Transportation and Communication (DoTC) has become two departments — the Department of Transportation (DoTr) and the Department of Information and Communications Technology (DICT). Then there are proposals to create a Department of Housing, Department of Fisheries. A good federal set up is to abolish many existing departments (like NEDA, DA, DENR, DoH, DoT, etc.) and allow the state governments to create their own departments as they see fit, create, or expand local or state revenues to finance these state departments.
  1. Forcing national legislative franchising like buses and taxi, instead of decentralized regional or provincial franchising. Speaker Pantaleon Alvarez and other House leaders are behind the proposal.
  1. Reversing integrated public private partnerships (PPP) where government fiscal exposure is very limited to hybrid PPP where national government budget and foreign borrowings (especially China ODA) is much bigger. A meaningful federal set up will empower the state governments to deal with local infrastructure like airports, seaports, provincial tollways and inter-city MRT/LRT.
  1. Centralized declaration of class suspensions. During the anti-martial law rallies in Sept. 21, 2017, Malacañang declared a Luzon-wide or nationwide class suspensions even if many provinces and cities did not even have scheduled rallies. Then during the PISTON jeepney strike in Oct. 16-17, 2017, Malacañang declared nationwide class suspensions, even if many provinces and cities did not even have planned jeep strike. President Duterte should have allowed the mayors and governors to decide, saying something like “the national government will step back from these decisions and it is up to the local governments to decide what’s best for their people.”

Beyond federalism plans contradicted by more centralization of powers and taxation, a long-term alternative would be for the Philippines to split into many new countries and allow these new countries to compete with one another in the field of taxation, governance, infrastructure, trade, and tourism to attract more investors and visitors from around the world. Peace and diplomacy will be retained as fellow ASEAN member-states as well as various multilateral formations and the United Nations.

Many existing Philippine island-provinces are actually comparable in size to existing countries and/or big territories (see table).


This is a far out view and may not be considered in the current decade but would appear more viable through time. Singapore will not be as dynamic and developed as it is now if it was just one of many states of Malaysia.

Under the current activities of the Duterte administration, there lies a danger that when federalism is finally enacted, local entrepreneurs and job creators will be walloped with both high national and high local taxes, fees, royalties and various mandatory spending. This will be a good formula to encourage more corruption and black market business operation, or get out of the country and do business elsewhere.

For the federalism plan to be more attractive to the people, the national government should learn to step back, to tax less, regulate less, bureaucratize less, build confidence among the people and investors in the provinces that indeed they will be given more leeway, more opportunities to craft their own political and economic identity.

Road trips and PPP projects

* This is my column in BusinessWorld last December 28, 2017.


For the third straight year, I drove my family from Makati City to Iloilo City via roll-on roll-off (RoRo) vessels during the holidays.

The road trip came with its own set of inconveniences that were nevertheless offset by several benefits: It allowed my family to carry more cargo (compared to flying) and also allowed my two daughters to enjoy boat rides.

In December 2015 and 2016, I drove days before Christmas, to avoid the long queues of vehicles at the ports of Batangas and Roxas or Bulalacao, Oriental Mindoro. This year, I drove early morning of Dec. 25 and I noticed two improvements.

First, toll fees were no longer collected that day (or at least in early morning) in the three tollways — South Luzon Expressway (SLEx), the SLEx extension, and the Southern Tagalog Arterial Road (STAR) and I wish to thank the tollway operators for that Christmas gift.

As expected, travel was smooth and safe on these tollways, indicating once more the beauty of privately operated infrastructure and user-pay principle.

Last but not the least, only a few cars queued at the Batangas and Roxas ports although there were also fewer boats that day.

Roads from Calapan to Roxas in Oriental Mindoro are generally good although motorcycles and tricycles — especially in big municipalities like Calapan, Naujan, and Pinamalayan — delayed travel.

Likewise, the highways in Aklan province were smooth. In Capiz, roads have generally improved but several portions have remained bumpy. Motorcycles and tricycles on these roads have also increased significantly, extending travel time.

These bring up two important subjects.

First, the need to expand and modernize our roads via tollways, constructed and operated by the private sector through the public-private partnership (PPP) scheme.

Existing roads will remain and will be maintained by the DPWH and local governments but there should be an alternative thoroughfares for motorists who are willing to pay for faster and safer travel.

Here is a list of potential new tollways that currently have big vehicle traffic volume. I am not sure if there are already unsolicited proposals for these tollways.

  1. Calapan-Roxas, Oriental Mindoro. This covers 126 kilometers with additional entry/exit in larger municipalities such as Naujan and Pinamalayan. Vehicle volume has practically exploded with the 24/7 operations of RoRo boats between Batangas-Calapan and Roxas-Caticlan. Many tourists and visitors from Metro Manila and nearby provinces are travelling to the islands of Mindoro (Oriental and Occidental provinces) and Panay (Aklan, Capiz, Antique, Iloilo provinces).
  1. Caticlan or Kalibo, Aklan-Iloilo City. Caticlan hosts the main seaport and airport for hundreds of thousands of yearly visitors who go to Boracay. Panay island has many tourist attractions besides its already substantial population.
  1. Escalante-Bacolod-Dumaguete, Negros island. The Escalante-Bacolod route connects the two provincial capitals of Negros Occidental and Cebu while the Bacolod-Dumaguete route connects the two provinces’ capitals. There are four sea connections from Negros to Cebu with rising commerce and investments between the two islands. Escalante-Tabuelan, San Carlos-Toledo, Guihulngan-Tangil, and Dumaguete-Bogo or Oslob.

Second, the Duterte government shouldn’t have reversed the previous policy of integrated PPP (building/construction + operation and maintenance, O&M are under a single entity) and change to hybrid PPP (building/construction and O&M done by two separate entities, the former usually China-owned firms via China ODA).

Many Philippine-based construction companies need more experience and infrastructure portfolio that further strengthen their technical and financial capability to do more PPP nationwide and regionwide. Our emerging economic neighbors Indonesia, Vietnam, Cambodia, Laos, and Myanmar have started some large projects in the past and will soon undertake even bigger developments — provincial tollways, city skyways, big airports, and seaports, water, and power projects, school buildings and other civil structures.

ASEAN-based infrastructure and construction firms will have the advantage compared to those outside the region.

And pretty soon, fast-developing countries outside the region like India, Bangladesh, and Pakistan will also embark on large-scale infrastructure development via PPP as the scheme will significantly free their fiscal resources while having big, capital-intensive projects at the same time.

Philippine-based construction firms with large portfolio of finished and on-going projects in the Philippines and ASEAN neighbors will have some advantage because of evolving trade and investment partnerships among Asian countries.

It may have been wrong for the Duterte government to reverse previously planned integrated PPP and change to hybrid PPP just to accommodate China ODA and firms.

After all, there should be less government intervention in sectors and activities where market competition and innovation is present and can be further strengthened. Bigger government is reserved for promoting the rule of law and respecting and enforcing contracts and obligations between and among competing and regulated entities.

Trends in global and Philippine trade

* This is my column in BusinessWorld last December 27.


Global merchandise trade has slowed down recently despite low oil prices and less political and economic instability. After recovering from the 2009-2010 global financial turmoil, merchandise exports reached $18.3 trillion in 2011, $19 trillion in 2014, declined to $16.5 trillion in 2015, and fell further to $16 trillion in 2016.

The top 5 exporters in merchandise goods in 2015-2016 were China, USA, Germany, Japan, and Netherlands. Germany and Netherlands have the advantage of easier trade because they both are located in one continental land area and hence, can export by land, unlike China, US, and Japan which have to export largely by water.

Eleven (11) Asian economies, five of them from the ASEAN, belong to the top 30 biggest merchandise exporters in the world in 2015-2016. The Philippines remained in ranks 45th-46th.

In commercial services, global exports have slightly increased from $4.76 trillion in 2015 to $4.81 trillion in 2016. The top 5 exporters in were US, UK, Germany, France, and China. Such services include revenues from tourism and remittances of nationals working abroad.


Twelve (12) Asian economies, five of them including the Philippines from the ASEAN, belong to the top 40 biggest services exporters in the world in 2015-2016.

In particular, the Philippines’ merchandise exports have recovered with higher growth this year. Cumulative figures for January-October period are: $49.05 billion in 2015, $47.55 billion in 2016, and $53.11 billion in 2017, or 11.7% growth in 2017 over the previous year.

merchandise2a_122717Top 5 merchandise export markets of the Philippines last year and this year are Japan, Hong Kong, US, China, and Singapore. The EU as a bloc though is the Philippines 2nd biggest market — it imported $5.86 trillion in 2016 and $7.83 trillion in 2017, January-October period.

Almost all export markets have increased their purchase from the Philippines in 2017 except Japan and Singapore, but the export levels to these two countries remain high.

Preliminary figures for 2017 point to a recovery and higher levels in 2017 compared to 2016, Philippine figures provide the clue. And not only in exports but also in imports.

The statement “If America (or Europe) turns protectionist, Asia loses” is wrong. Whoever starts serious protectionism is the loser. Free trade creates good will with other countries while expanding the choices and options for local consumers and manufacturers, which expand their productive capacity.

Asia will remain as a very important player in global trade of goods and services, also in investments, for two important reasons. One, growth momentum remains high, many economies growing 5% or more (GDP growth) a year. Two, huge and generally young population especially in India, Indonesia, Philippines, and Vietnam, comprising nearly 1.8 billion people with an average age of only 24-25 years old which is one-half of the average age of Japan and many developed countries in Europe.

Freer trade philosophy and policy will resurface in the coming years. Trade is the biggest instrument to prevent wars among countries. As the famous French economist and writer Frederic Bastiat once wrote, “If goods cannot cross borders, soldiers will.”

Global vs national tax reforms

* This is my column in BusinessWorld last December 13.


“The problem is not that the people are taxed too little. The problem is that government spends too much.”

— former US President Ronald Reagan

Until 1980, much of the world’s countries and governments were socialistic in their taxation and spending policies. For instance, the top marginal income tax rates that year were 60% in Malaysia and Thailand, 70% in the Philippines, 75% in Japan, 89% in South Korea, 70-75% in the US, and 83% in UK.

Then the Reagan-Thatcher era in the ’80s changed this, they cut their respective tax rates by half. Both were advocates of limited government and free market as indicated by Reagan’s statement above. He also once described role of many governments as “if it moves, tax it; if it keeps moving, regulate it; if it stops moving, subsidize it.” Ms. Thatcher on the other hand once said that “the problem with socialism is that you eventually run out of other people’s money.”

In the Philippines, former President Cory Aquino and other world leaders in the ’80s also joined to institute drastic income tax cut.

Fast forward today. The Duterte administration initiated drastic personal income tax cut, which is a good thing. The problem is that it also increased taxes elsewhere as it expanded public spending big time. The average increase in the national government budget of the previous administration was around P250-300 billion/year. Dutertenomics easily doubled this level: P670B increase in the first year (from 2016’s P2.68 trillion to 2017’s P3.35 trillion), another P420B increase next year with 2018 budget of P3.77 trillion.

Among the global NGOs that fight high and multiple taxes, big and wasteful public spending, is the World Taxpayers Association (WTA).

Formed in 1998 as Taxpayers Associations International, it was renamed as WTA IN 2000. It has many members from over 60 countries promoting lower tax rates, limited government, and more individual freedom.

The WTA held its regional forum and meeting last week, Dec. 9-10 at Rembrandt Hotel Bangkok, Thailand. I went there and I was the only participant with an institute from ASEAN countries. Other participants were from China, Hong Kong, South Korea, Japan, India, Nepal, Australia, UK, Sweden, US and Canada. Former WTA Sec. Gen. Bjorn Tarras-Wahlberg, current WTA Chairman Troy Lanigan who is also the president of Canadian Taxpayers Foundation (CTF), and current WTA Sec. Gen. Cristina Berechet were there.

Among the biggest members of WTA and represented in the Bangkok meeting are the Korea Taxpayers Association (KTA) with 1.2M dues-paying members, CTF with 117,000+ members, Taxpayers Alliance (UK) with 75,000+ members, others.

The Philippine government seems to be the most tax-hungry among the 10 members of the ASEAN as reflected in the total tax rate (TTR) as % of commercial profit. This is reported by the Price Waterhouse Coopers (PWC) in its “Paying Taxes” annual reports. TTR is the sum of corporate taxes + labor taxes (mandatory contributions for employees’ SSS, health, housing insurance, etc) + other taxes and fees (by other national and local government agencies).

On the country list, I chose members of the proposed Regional Comprehensive Economic Partnership (RCEP), composed of ASEAN 10 countries + 6 regular dialogue partners China, Japan, South Korea, India, Australia, New Zealand; then the two tiger economies in the region, Hong Kong and Taiwan. Also included are the biggest economies in North America (US and Canada) and Europe (Germany and UK). Of the 22 countries covered, only four (indicated by *) have experienced increase or deterioration in TTR (see table).

Global-v-National_121317 (1)

The good news is that over the past five years, many countries and governments have learned to cut their various taxes and fees collected from corporate job creators. The bad news is that after such decrease, the level of TTR remains high.

Take the Philippines.

Its TTR has declined from 46.4% of firms’ commercial profit in 2012 to 42.9% in 2017, that’s the good news. The bad news is that this 42.9% is the highest in the ASEAN, even higher than socialist Vietnam.

So can the Duterte TRAIN help remove this dubious image of the Philippines having the most tax-hungry policies in the ASEAN and other neighboring countries?

With new tax hikes affecting the prices of cars, oil, electricity, and sweetened beverages; high VAT affecting many goods and services, the answer seems to be an ugly NO.

Dutertenomics could have improved this situation by cutting the VAT from 12% to 8% or lower with zero exemption except raw agri and fishery products. But Dutertenomics is focused on spend-spend-spend with little regard for the inflationary pressure of its tax-tax-tax policies.