The Train Law, also known as the Tax Reform for Acceleration and Inclusion, is a

law under the Republic Act No. 10963 which is signed by President Rodrigo Duterte on
December 19, 2017. The declared goal of TRAIN is to create a more efficient and fairer,
effective, and successful revenue collection system. Taxation is regarded as the lifeline
of our country. Without these taxes, the country's ability to carry out its work will be
jeopardized. These taxes must cover the country's costs, which include funding
initiatives and programs aimed at enhancing the country's economy and people's lives.
This Train Law, according to the administration, benefits the nation's economy. It does,
however, have disadvantages and benefits, just like almost all other legislation.

One of the benefits of this law is that all employees with salaries of less than
P250,000 will be taxed reduced. So that they can spend their money on themselves and
their families. Filipino citizens are grateful that the tax was abolished and that just SSS,
Pagibig, and Philhealth are deducted from their pay. The provision of TRAIN allocates
70% of its money to the government's spending for the BUILD (3x) Program, which is
the next advantage. The remaining 30% will be allocated to social services, with the
goal of promoting a Filipino's healthy well-being by contributing funds to educational and
health-related programs. The TRAIN law proposes raising cigarette and sweetened
beverage tariffs in order to promote a healthy lifestyle. The country can afford to
establish the Social Amelioration Program (SAP) in the midst of the epidemic because
of this statute. The Social Amelioration Program provides low-income families with a
regular monthly subsidy of P5,000 to P8,000 for two months, depending on where they
live. These incentives assist poor sectors of society to obtain basic essentials during the
outbreak.

Now let's look at the Train Law's downsides. The first is that the cost of food,
power, public transportation, and housing has all climbed since its implementation,
leading citizens to question its value. At the ceremonial transition of command for the
Presidential Security Group (PSG), Duterte underlined that the TRAIN Law gives federal
money that may be used to pay government programs and activities that benefit
Filipino. However, the poor are at a considerable disadvantage because their wages are
not taxed; consequently, any changes in tax rates will have no effect. Consumers will be
impacted significantly by price adjustments, as well as increases in transit fees and
consumables. The TRAIN Law offers a variety of advantages, notwithstanding their
dedication to hyperinflation. With a higher wage and no/lower personal income tax,
individuals could save more–as long as they manage their money carefully. Increases in
the prices of sugar-sweetened beverages, cigarettes, and vehicle owners' levies may
cause people to consume fewer of these products.

If we are going to comprehend if TRAIN law is sound to lower income tax to allegedly
address the common workers’ problem of receiving a low net income, the answer is
YES. Lowering the salary is an appropriate response to the problem of low net income
for common workers. Because of the lower tax rate, low-income workers may be able to
increase their spending. Low taxation, according to Kaplow & Shavell (1994), can be
used as an incentive to encourage low-wage workers to increase their output.
Furthermore, high tax rates make it impossible for low-income earners to spend on
essential necessities, harming economic output directly. To address the issue of low net
income, the government should consider increasing employee pay. In addition, lowering
income taxes and raising gross income can be an effective strategy to address low-
income issues while also motivating workers.

Reference
Kaplow, L., & Shavell, S. (1994). Why the legal system is less efficient than the income tax in
redistributing income. The Journal of Legal Studies, 667-681.