Welfare services are actions or procedures that cover the basic well-being of the individuals and the

society. They may be provided as a citizenship right, or negotiated in the market, and managed by
governments and institutions or private actors. These efforts usually strive to improve the financial
situation of people in need but may also strive to improve their employment chances and many other
aspects of their lives including sometimes their mental health. In many countries, most such aid is
provided by women (family members, relatives and members of the local community) and is only
theoretically available from government sources.

Surt Foundation, Foundationhttps://understandingsocialscience.wordpress.com/2010/11/11/key-term-

definition-welfare-services/ (Posted on November 11, 2010)

Occupational Licensing

Occupational licensure laws disproportionately burden the poor by requiring them to spend significant
resources just to enter a market. These laws require prospective professionals to pass tests and spend
hundreds of dollars on classes and fees, and subject them to oversight from boards and regulators largely
composed of those who already compete in the market.

Many of these regulations are also unnecessary because the jobs in question do not present any real
risks to the public. Consumers can use services such as Yelp to research products or providers online
before making a purchase. Instead of protecting consumers, these regulations often serve to protect
those already in an industry by limiting competition. This, in turn, reduces upward mobility for the poor
and raises prices for consumers.

Ubers experience provides a case study of many of these issues. Uber is a ride-sharing service that
provides new employment opportunities for those in need as well as cheaper transportation for those of
modest means. Yet Uber also eats into the profits of taxi companies, at least part of which are a result of
taxi companies politically privileged position in the market. Unsurprisingly, traditional taxi companies are
protesting the service, claiming it is illegal and dangerous because it is not subject to the same
regulations as taxis.

Zoning and Other Small Business Regulations

Zoning laws are intended to limit situations where certain types of business activities interfere with
residential living. However, similarly to occupational licensure laws, zoning laws are often used by those
with access to political power to reduce competition from rivals who are able to provide services at a
lower cost.

In Chicago, for example, all businesses must have a basic business license that costs $250 for two years,
and violating this law can cost hundreds of dollars per day. Those attempting to renovate a building or
operate a business out of their home must complete an application process controlled by the Department
of Zoning. Even getting permission to change a sign may require dozens of forms.

These types of laws deny people the opportunity to provide for their families through their hard work and
personal skills. Repealing regulations that restrict business opportunities would enrich poor people and
give them control over their own lives, reducing dependency on government.

Regressive Taxation

Government policies can also raise the cost of living in ways that disproportionately affect lower-income
households. Regulations that raise prices by imposing taxes on the sale of certain products are one type
of policy that can have such regressive effects. If the goods and services being taxed are consumed
disproportionately by low-income households, the resulting higher prices increase such households cost
of living disproportionately and are thus considered regressive.

Sin taxestaxes that are intended to change behavior of consumersare one prominent category of
taxes with a disproportionate effect on the poor.

Sin taxes are often imposed on alcohol and tobacco, but recent proposals to tax sugary drinks or fatty
foods would also fall under this category.

While the intent of the taxes is to discourage people from consuming the taxed goods, economic
evidence suggests that these taxes do not have much of an effect on behavior. Because the poor also
tend to spend a larger share of their disposable income on these goods than do the rich, sin taxes have a
disproportionate effect on the spending power of poor households.

CONCLUSION

Many discussions of poverty and inequality are bogged down in debates about tax rates and government
spending, trapped under the assumption that the cause of some peoples poverty is other peoples
wealth. One key factor preventing upward mobility is state and local regulations that make it more
expensive and time-consuming for the poor to open new businesses or enter a new profession. By
eliminating burdensome business regulations such as occupational licensing and zoning restrictions and
by refraining from imposing sin taxes, policymakers can let the poor help themselves move up and out of
poverty.

Horwitz, Steven, Breaking Down the Barriers: Three Ways State and Local Governments Can Improve
the Lives of the Poor, July 21, 2015, https://www.mercatus.org/publication/breaking-down-barriers-three-
ways-state-and-local-governments-can-improve-lives-poor

In the Philippines, too many goods and services are exempted from taxes. For instance, our value-added
tax (VAT) law has 59 lines of exemptions more compared with the VAT laws of our neighbors. The
plethora of exemptions partly explains the relatively low tax revenues we get. If only fewer goods were
exempted or if only the exemptions were limited to essential goods like raw food and medicines then
the government could boost its revenues.

Our tax system is overly complicated and burdensome, especially for small taxpayers. A 2015 study
found that the Philippines ranked 127th out of 189 economies in terms of ease of paying taxes (we
ranked below Iraq and Afghanistan). Another study revealed that the complexity of tax regulations and
our high tax rates are some of the most problematic factors for doing business in the country.

The Philippine tax system is only "mildly" progressive, and even borderline "regressive" in many
instances, poor Filipinos effectively pay a larger fraction of their income in taxes.

For example, tax rates on dividends and other forms of capital incomes (which are earned mostly by the
rich) are so low compared to the tax rates of ordinary workers. Increasing these capital income tax rates
will certainly help make the rich pay more in taxes.

Also, taxes on petroleum products have been constant for many years. Aside from being a lost
opportunity to combat pollution and congestion, its also a lost opportunity to tax the rich who consume
petroleum products more.

Conclusion: The time is ripe for tax reform

Tax policy is essentially a balancing act between efficiency and equity. We want to impose progressive
taxes to make society a fairer place to live in. But at the same time, we want to make sure that such taxes
do not reduce economic activity so much.

Unfortunately, the Philippine tax system is currently deficient in both respects. Not only do our taxes
disproportionately burden the poor and benefit the rich, but they also yield too little revenue given the
distortions they create. Needless to say, both problems need to be resolved soon. Comprehensive tax
reform in the country is long overdue.

Punong Bayan JC The problem with our tax system and how it affects us, Published 3:00 PM, January
21, 2017, Updated 4:15 PM, January 22, 2017

The Philippines, as regarded as a developing country having been described as a resilient country i, is in
reality, most of the people in rural side even on the country side, is living in the poverty line. This sardonic
condition is caused by the situation of the people, with limited access to resources, transportation,
education, employment, and child care that could have lead to jobs and business opportunities, but rather
make it difficult for them to engaged themselves to prosperity and participate in the community and help
promote and develop social welfare to the country, in overall. This problem set forth a major economic
and social challenge to the National Government Authorities, especially Local Government Agencies.

To vigilantly take hand in hand and introduce improvements for those living in poverty, the government
should carefully study and outline one by one at what is causing this seems to be invulnerable poverty.
They should consider such factors as what causes people to live in poverty: for example, what causes the
lack of income, the mischief that lead to lack of resources which should have ensure sustainable lives,
why so many young children, expected to be living their early life in school have limited or lack of access
to education and other government education program and services, and other hardly unforeseeable or
uncontrollable factors such as loss of livelihood as a result of economic recession or disaster. ii

There must be a combination of local government support on the aspect of rules and regulations
implemented towards institutionalizing organizations dedicated to helping and empowering rights of the
children to education, providing job opportunities towards stability and growth, advocacy for reformation
for betterments of burdensome tax regulations, and influencing private institution in safeguarding the
social welfare of every individual in their organization. The fact that starting a new business or entering a
new occupation is often unnecessarily expensive and complicated by government regulations is one of
the major factors that is preventing people from advancing. iii

In view of the foregoing, the question is what steps can then be taken towards addressing the social
welfare challenges associated with poverty that has afflicted country for decades.

Increase of Provincial/City Minimum Wage

Not just it will increase income of the people in the city, but will also help decongest or reduce the
overpopulated major job capital cities of the country. Many of economist though do not agree with the
idea, due to their view of the principle of supply and demand that will cause decrease in the employment
rate as the private organization will tend to cut down cost and decrease their demand of workforce due to
increase in the cost, the results of a particular study done in the University of California seems to have a
complete contradicting view, to wit:

Although the issue remains controversial, our reading of the research literature, and reviews by others,
indicate that negative employment effects are very small. This evidence suggests that current debates
should pay more attention to the positive effects of an increase in the minimum wage on living standards,
on health and educational outcomes, on reducing inequality and on poverty reduction among low-wage
households, rather than on employment effects.iv

It can be inferred from the above quoted statement that there is more to positive effects especially those
who are among low-wage households, rather than contemplating its effects on the employment rate.

Reformation of Small Business Licensing

Occupational licensure laws disproportionately burden the poor by requiring them to spend significant
resources just to enter a market. These laws require prospective professionals to pass tests and spend
hundreds of dollars on classes and fees, and subject them to oversight from boards and regulators largely
composed of those who already compete in the market.

In fact, two recent studies find that state licensing regimes for small businesses impose severe burdens
on consumers and entrepreneurs alike. The first, by the libertarian Institute for Justicev, finds that
licensing is ubiquitous for a wide range of professions, and that it often has little or no public interest
justification. The second new study by Thumbtack.com and the Kauffman Foundationvi reinforces some
of IJs conclusions. It consists of a nationwide survey of several thousand small business owners, and
finds that, in their view, the ease of obtaining a license is the biggest public policy determinant of a states
level of friendliness to small businesses far more important even than tax rates vii

Tax Reform

i About the Philippines, http://www.ph.undp.org/content/philippines/en/home/countryinfo.html, Accessed

October 8, 2017.
ii Jyotsna, POVERTY: CAUSES AND SOLUTIONS, Monday, 28 May 2012 23:55, Accessed October 8,

2017.
iii Horwitz, Steven, Breaking Down the Barriers: Three Ways State and Local Governments Can Improve

the Lives of the Poor, July 21, 2015, https://www.mercatus.org/publication/breaking-down-barriers-three-

ways-state-and-local-governments-can-improve-lives-poor
iv Michael Reich and Jesse Rothstein, Do Minimum Wages Really Kill Jobs?, Labor Markets, April

27, http://econofact.org/do-minimum-wages-really-kill-jobs, Accessed October 8, 2017.

v Dr. Dick Carpenter,

, License to Work: A National Study of Burdens from Occupational Licensing, Institute for Justice Report
vi Nathan Allen and Sander Daniels, THUMBTACK.COM SMALL BUSINESS SURVEY:

METHODOLOGY & ANALYSIS, http://www.thumbtack.com/, Accessed October 9, 2017

 Ilya Somin, The Burden of Small Business Licensing, Economic Liberties, May 14, 2012 3:48
vii

pm, http://volokh.com/2012/05/14/the-burden-of-small-business-licensing/, Accessed October 9,

2017.