Another idea for taking a stand on VRT

unkel

michaelanthony wrote:

BMW do.

Do what?

CorporalCarrot

Anan1 wrote:

The point I'm making is that any tax cut requires either for the lost revenue to be regained somewhere else or for expenditure to be reduced. I get the feeling that this hasn't occurred to those shouting loudest about "rip-off VRT". Even if we do raise money by implementing your idea, I'd prefer to see it back in the form of reduced PAYE or increased services, rather than the abolition of VRT. Put simply, abolishing VRT benefits people buying new cars at the expense of the rest of the population.

This is such a specious argument. It might make sense if the government was actually spending its entire tax take from motorists on roads and public transport, so that a reduction in VRT would lead to non motorists having to subsidise motorists. But as most reasonable people know, the reality is the exact opposite situation. For the last 10 years the government has spent an average of just one third of the total tax tax from motorists on roads/PT, with the 2004 figure running at €4.6bn total tax, €1.6bn expenditure. Thus motorists are actually heavily subsidising the rest of the population.

Your final sentence could just as easily have been reworded "Put simply, abolishing VRT stops penalising people buying new cars and removes an unfair subsidy that the rest of the population has been receiving".

Why motorists? Why are we singled out? Why not televisions or something? Well, its obviously because necessities such as cars tend to be price inelastic, making motorists an easy target.

The problem with the structure of the governments finances, is that that it has grown public service numbers and core expenditure artificially based on two extremely cyclical components that could be said to be in a bubble; i.e. stamp duty and vrt. Its spending this money as if its always going to be there. Which is going to make the inevitable adjustment all the more painful when finally it comes.

C

Anan1

Carb -
"To me VRT seems to imply that owning a car is a luxury. If I could jump on a bus in the morning to go to work that would great, but I can't. I have to have a car, so I don't appreciate having to pay more tax than the person who can jump on a bus everday, which is something all tax payers subsidise anyway." - Fair point. Bit chicken & egg though.

"On your point regarding putting tax on something else, if the revenue has to be generated from motorists, well then it should be on petrol. At least that way your getting taxed for using something rather than just owning it." - This I agree with, although in addition to, rather than instead of, VRT. There are many environmental arguments in favour of VRT, although this thread is complicated enough already without going down that road.;)

Ambro/Alias No9 -
I'm not sure about your argument, it would be a lot stronger if almost all of the people who want cars didn't actually have one already. And even if every car owner did go out and upgrade to a new car, or spent more money on their new car than they would otherwise have, there are financial implications in that for our balance of payments. A further argument is that, in lower car tax regimes, much of the slack is inevitably absorbed into higher profit margins for dealers & importers. See below also.

CorporalCarrot -
"Why motorists? Why are we singled out? Why not televisions or something? Well, its obviously because necessities such as cars tend to be price inelastic, making motorists an easy target." - Doesn't this eas into Ambro's argument? I thought you guys were supposed to be on the same team!;)
"For the last 10 years the government has spent an average of just one third of the total tax tax from motorists on roads/PT, with the 2004 figure running at €4.6bn total tax, €1.6bn expenditure. Thus motorists are actually heavily subsidising the rest of the population." - So are drinkers. And we subsidise the sick and the young. So it goes..

Ken Shabby -
If you actually have anything to contribute, i'd be delighted to hear it..

MrPudding

Abolishing VRT may also reduce road deaths. If there was no VRT the Irish poverty spec in cars would end. This would mean more cars with traction control and ESP as standard as well as additional airbags in some cases. All these "luxury items" are left off some Irish cars in order to keep the price as low as possible.

VRT costs lives, yet another way the government kills Irish people on our road through action or inaction.

MrP

Anan1

Actually, and I know this is a bit off topic, there is a growing body of evidence to show that active safety aids do nothing to improve safety. It would seem that, on the contrary, they give us the confidence to go faster...

Carb

Anan1 wrote:

On your point regarding putting tax on something else, if the revenue has to be generated from motorists, well then it should be on petrol. At least that way your getting taxed for using something rather than just owning it." - This I agree with, although in addition to, rather than instead of, VRT. There are many environmental arguments in favour of VRT, although this thread is complicated enough already without going down that road.;)
.

You quote above contradicts the point that you've made the whole way through this thread. Not only do you want VRT to maintained, you want additional tax on the motorist. I wouldn't be so sure about the enviromental factors either. Higher new car costs mean older less economical cars on the roads, not to mention that there are many other things a lot more damaging to the enviroment than private cars.

Also, I can choose to drink, I can't choose to own a car.

alias no.9

Anan1 wrote:

Ambro/Alias No9 -
I'm not sure about your argument, it would be a lot stronger if almost all of the people who want cars didn't actually have one already. And even if every car owner did go out and upgrade to a new car, or spent more money on their new car than they would otherwise have, there are financial implications in that for our balance of payments. A further argument is that, in lower car tax regimes, much of the slack is inevitably absorbed into higher profit margins for dealers & importers. See below also.

I'm not arguing that they'd spend more on the car, I'm arguing that they'd get more car for their money. Money that may only have got the buyer a second hand car in the past will be spent on new cars with consequential revenue in the form of VAT. Money that would have previously bought a modest new car in the past will buy a bigger / better specced / more powerful car for the same price with consequential additional revenue in the form of VAT, Road Tax and VAT & Excise on fuel. I'm not saying it will completely replace the VRT revenue, but it will go a long way to plugging the gap. I would be in favour of a carbon tax on fuel to make up the remainder.

CorporalCarrot

Anan1 wrote:

CorporalCarrot -
"Why motorists? Why are we singled out? Why not televisions or something? Well, its obviously because necessities such as cars tend to be price inelastic, making motorists an easy target." - Doesn't this eas into Ambro's argument? I thought you guys were supposed to be on the same team!;)
"For the last 10 years the government has spent an average of just one third of the total tax tax from motorists on roads/PT, with the 2004 figure running at €4.6bn total tax, €1.6bn expenditure. Thus motorists are actually heavily subsidising the rest of the population." - So are drinkers. And we subsidise the sick and the young. So it goes..

Anan

Re1; my statement was obviously a rhetorical one. Obviously I don't believe that it should go on any other form of goods. The most obvious way to recover the lost revenue would be to increase direct taxes. This would be the fairest way to do it.

re2; this is an unfair comparison. People can choose not to drink. Most people in this country cannot choose not to have a car.

C

MrPudding

Anan1 wrote:

Actually, and I know this is a bit off topic, there is a growing body of evidence to show that active safety aids do nothing to improve safety. It would seem that, on the contrary, they give us the confidence to go faster...

Not in all cases. Driver aids do not cause me to speed up for example.

What about in cases where a person meets some prick overtaking on a blind corner? In this case the likelyhood of survival of the the person who has done nothing wrong is increased by ABS (I know this is now standard,) traction control, ESP and as a last resort additional airbags.

Besides, I think this is a bit of a cop out. Can you provide the evidence to show this? I have heard it before, normally in the same paragraph as they say that making roads safer is also negated by driver going faster. Whilst I would think that some drivers will increase their speed I think most people would accept that there would be an increase in safety.

MrP

Anan1

CorporalCarrot -
"The most obvious way to recover the lost revenue would be to increase direct taxes. This would be the fairest way to do it." - This is the core of our disagreement, and fair play to you for saying it out straight. I'd prefer to keep VRT. And true, my drink comparison was an unfair one. The one about the sick & the young wasn't, though.

Alias No9 -
I do see your point here, but I don't really see that it counterbalances mine. (Sorry, that wasn't meant to sound patronizing!) There's also the environmental downside that your idea involves, by your own admission, more new cars being produced & more fuel being used.

Carb -
The myth that older cars are less economical is just that - a myth. Newer cars may have marginally more efficient powerplants, but they are also heavier & more powerful. Also, roughly half of the pollution caused by a car is produced during manufacture.

MrPudding -
Of course I can't show you evidence - who do you think I am?:D What I can tell you is that I personally would be inclined to take it much easier in the wet in a car without either ABS or ESP. Maybe that's just me, maybe it isn't!

Carb

Anan1 wrote:

Carb -
The myth that older cars are less economical is just that - a myth. Newer cars may have marginally more efficient powerplants, but they are also heavier & more powerful. Also, roughly half of the pollution caused by a car is produced during manufacture.

Correct me if I'm wrong, but every year I hear of new cars coming out that achieve a higher MPG. Now you can get mid size engines doing 55/60 mpg, I don't recall there been many of these in the mid 90s, not to mention the newer technologies.

As for the pollution casued during manufacture, what on earth has this got to do with VRT. Are you trying to say the government here are perfectly justified adding on 30% to the price of a car, because a factory thousands of miles ways is causing pollution. Does the VRT secretly get paid out of Ireland to some envriomental group in South Korea?

Anan1

"As for the pollution casued during manufacture, what on earth has this got to do with VRT. Are you trying to say the government here are perfectly justified adding on 30% to the price of a car, because a factory thousands of miles ways is causing pollution. Does the VRT secretly get paid out of Ireland to some envriomental group in South Korea?"

- No. What I'm saying is that the argument that reducing VRT will increase demand for new cars has its downside in terms of increased pollution.

"Correct me if I'm wrong, but every year I hear of new cars coming out that achieve a higher MPG. Now you can get mid size engines doing 55/60 mpg, I don't recall there been many of these in the mid 90s, not to mention the newer technologies."

-Again, I'm no expert. That said, with the exception of hybrids, my distinct impression is that cars are less economical than they used to be.

maidhc

To say motorists are subsidising the rest of the population is a curious argument when most people have cars. Those that dont tend to be less well off, who in any case pay less tax that those more fortunate. Likeswise people with lots of money pay more on VRT since they buy newer/bigger cars.

It seems equitable enough to me.

I do think owning a car is too expensive in Ireland though.If anything was to happen I would like to see the VRT lowered substantially on sub 1.4 litre cars, and it raised in 2.0 plus cars.

ambro25

Anan1 wrote:

Ambro/Alias No9 -
And even if every car owner did go out and upgrade to a new car, or spent more money on their new car than they would otherwise have, there are financial implications in that for our balance of payments.

A further argument is that, in lower car tax regimes, much of the slack is inevitably absorbed into higher profit margins for dealers & importers.

But then you'd be going back to what (I'm surmising) most anti-VRT proponents are after: the opportunity to avail of a supposedly-free market economy distributed amongst 15 countries or so, without penalty for doing so.

For instance, inasmuch as possible, I would like to be able to make my own decisions as to the wisdom of importing a new/used car myself or buying a new/used car from a local or foreign dealer, and favorise EU-wide competition as opposed to entertain an artificially-isolated market that benefits the dealers and GVT the most and the motorists the less.

MrPudding

Anan1 wrote:

MrPudding -
Of course I can't show you evidence - who do you think I am?:D What I can tell you is that I personally would be inclined to take it much easier in the wet in a car without either ABS or ESP. Maybe that's just me, maybe it isn't!

Oh, I'm sorry, it's just when you say:

Anan1 wrote:

.........there is a growing body of evidence to show that active safety aids do nothing to improve safety. It would seem that, on the contrary, they give us the confidence to go faster...

I think you have access to the evidence you speak of. My bad:rolleyes:

MrP

MrPudding

[quote=Anan1
-Again, I'm no expert. That said, with the exception of hybrids, my distinct impression is that cars are less economical than they used to be.[/quote]

Are you saying that sh1tty old bangers, in addition to being safer than new cars, are also better for the environment?

Do you work work the gov?

MrP

Anan1

Ambro25 -

"But then you'd be going back to what (I'm surmising) most anti-VRT proponents are after: the opportunity to avail of a supposedly-free market economy distributed amongst 15 countries or so, without penalty for doing so."

I think we're all in favour of that. VRT effects our competitiveness as an exporter of used cars, not as an importer. Our big problem here is not VRT but the fact that we drive on the wrong side of the road.

"Oh, I'm sorry, it's just when you say:

Quote:
Originally Posted by Anan1
.........there is a growing body of evidence to show that active safety aids do nothing to improve safety. It would seem that, on the contrary, they give us the confidence to go faster...


I think you have access to the evidence you speak of. My bad

MrP"

Come on, Mr P. We're having a debate on a chat board here, we're not in a court of law.

"Are you saying that sh1tty old bangers, in addition to being safer than new cars, are also better for the environment?"

-Did I say this? Anywhere?

maidhc

MrPudding wrote:

Are you saying that sh1tty old bangers, in addition to being safer than new cars, are also better for the environment?

This thread is going nowhere, but interestingly to conform with Tier III emissions some engines are actually less fuel efficient than the Tier II versions of the same engine.

Driving aids dont change the laws of physics... VW say that in the 06 Passat brochure...

MrPudding

maidhc wrote:

This thread is going nowhere, but interestingly to conform with Tier III emissions some engines are actually less fuel efficient than the Tier II versions of the same engine.

Fuel economy is different from levels of emmissions. A car that uses more fuel does not automatically release more harmful gases.

maidhc wrote:

Driving aids dont change the laws of physics... VW say that in the 06 Passat brochure...

No they don't, but they do react faster than a human can. Are you saying that they do not help people to avoid accidents?

MrP

maidhc

MrPudding wrote:

No they don't, but they do react faster than a human can. Are you saying that they do not help people to avoid accidents?

I am sure they help to some very limited degree. Personally I would rather a car with good dynamics and surefooted to drive than an A-Class/4x4 with every three letter acronym under the sun.

My car doesnt have ABS, ESC, EBD, ABC or XZY, but thankfully I have never had an accident or lost control.. and to be honest I have done a share of stupid things in my driving career.

Guy:Incognito

junkyard wrote:

The price of petrol and diesel is another con job

We pay lower prices for tehse than most others. Two countries I have first hand experience of , Britain and Germany, certainly pay a lot more than us.

Anan1

"Fuel economy is different from levels of emmissions. A car that uses more fuel does not automatically release more harmful gases."

- A car that uses more fuel will release more CO2, period.

"No they don't, but they do react faster than a human can. Are you saying that they do not help people to avoid accidents?"

We've been over this one before. To recap, driving aids may help people to avoid accidents, provided their presence does not make drivers complacent.

ambro25

Anan1 wrote:

I think we're all in favour of that. VRT effects our competitiveness as an exporter of used cars, not as an importer. Our big problem here is not VRT but the fact that we drive on the wrong side of the road.

:rolleyes: - absolutely not buying that - sorry Anan1, but bullsh*t: the UK is amongst the largest car markets in the EU. Correct me if I'm wrong, but they also drive RHD cars.

Stekelly wrote:

We pay lower prices for tehse than most others. Two countries I have first hand experience of , Britain and Germany, certainly pay a lot more than us.

One country I have a long experience of, which is somewhat more comparable to Ireland because it's quite small (and I think that's more relevant to the issue here) and has had the very same economic development curve and problems (1970-nothing but farms / 1990-one of the main EU capitals and main banking center for most EU banks), is Luxembourg:
* petrol/diesel there is 20 to 25% cheaper than Ireland.
* VAT on cars is cheaper than Ireland (rate is about 15%, last time I checked).
* Insurance is way cheaper than Ireland (I used to pay something like €300 fully comp' on a 1.4 AX, with a "driving-offenses-rap sheet" with the local constabulary as long as your arm, and less than a year's driving license - a foreign driving license at that)
* road tax is cheaper than Ireland, engine size-indexed like here but about €250 for a 2.0L.
* and their NCT is centralised (just like Ireland, with 'centres' to which you have to bring your car/bus/bike/lorry/ufo etc.) and actually works, because run by the GVT's Transport Department (no vested interests), not farmed off to a private co.

When you walk or drive around that country, you rarely see anyhting that's more than 5 years old on the road (unless, it's a classic and believe you me - they have lots!) and you rarely see anything that would cost less than €60k to buy in Ireland.

The morale? Well if there was no VRT, I know where I'd start looking to buy new and import (because your average salary in Lux is lower, new-before-tax car list prices are comparable - but they have all the gubbins as standard instead - and I mean all of them!)

Anan1

" absolutely not buying that - sorry Anan1, but bullsh*t: the UK is amongst the largest car markets in the EU. Correct me if I'm wrong, but they also drive RHD cars."

- You're right, they are. Last year, they registered 2.4 million cars. Out of an EU total of 15.2 million.

ambro25

Anan1 wrote:

they registered 2.4 million cars. Out of an EU total of 15.2 million.

The British market -- Europe's second-largest after Germany -- contracted 5 percent in 2005 as relatively high interest rates and flagging consumer sentiment took their toll. Germany, France and Spain managed to grow while the Italian market eased.

source

Anan1

Come on Ambro, I think you see my point.

MrPudding

Anan1 wrote:

- A car that uses more fuel will release more CO2, period.

CO2 is not the only harmful substance that comes out of a car's exhaust.

Any chance of you using the quote button?

MrP

ambro25

I do see your point, Anan1, I'm just not subscribing to it, both for personal reasons and from an equitable point of view.

Requirements of alternative taxation aside, upon which point both I and most other objectors to VRT agree with anyway, VRT is simply not justifiable, so long as -

(i) it breaches fundamental EU principles (and actual Statutes), on several counts (free movement of goods, free movement of property),
(ii) the proceeds thereof are not rightfully used to better transport in the Republic (irrespective of whether it's public or infrastructural),
(iii) it maintains an artificial stranglehold on the defo captive automotive market which only benefits dealers (indirectly) and the GVT (directly),
(iv) it is not periodically reviewed/scaled (down) in view of the factors that have originally justified its inception.

That you drive a Mercedes, a new Beetle and an Integrale, defend/support VRT and actually ask for more automotive taxation (as you have done), simply leads me to one conclusion: that you simply have more money than sense

(not meant to be a personal affront, just a good-natured jibe - and [preempt cheap shot]no, I'm not jealous, I have an Impreza, an MX-5 and a bike myself[/preempt cheap shot] )

maidhc

ambro25 wrote:

(i) it breaches fundamental EU principles (and actual Statutes), on several counts (free movement of goods, free movement of property),

Does it though? In the absence of fiscal harmonisation throughout the eu I doubt very much it it does any more than VAT. Certain types of VRT have been struck down in the past (e.g. in France a very high tax applied to cars of a capacity greater than the french companies sold....!). If Irish VRT was in blatant disregard to EU law, it wouldnt be here now.

English people are free to buy cars in Ireland and not pay VRT, and we can buy cars in the UK and pay it. As a result it doesnt distort trade or force us to buy "Irish" cars (not that they exist)

ambro25 wrote:

(ii) the proceeds thereof are not rightfully used to better transport in the Republic (irrespective of whether it's public or infrastructural),

Money goes to the exchequer. Thats how tax systems work, end of story. Not all money from stamp duty goes to imporving the building industry nor does all VAT on mobile phones go to improving telecommuications.

ambro25 wrote:

(iii) it maintains an artificial stranglehold on the defo captive automotive market which only benefits dealers (indirectly) and the GVT (directly),

It makes cars more expensive sure, but apart from that I dont see what else it does.

ambro25 wrote:

(iv) it is not periodically reviewed/scaled (down) in view of the factors that have originally justified its inception.

I have no idea what originally caused it to be introduced, but there are a million more useful ways to deal with a surplus tax take than give it back to the people who need it least (those who buy new cars), and I say this as someone who is going to visit a Ford garage this evening to have a look at the new focus...

Anan1

OK people, It's been fun, but I feel at this point that we're going round in circles. I've made my points, I've taken those of others on board, I'm happy to leave it at that.;)