What should government do to solve the growing deficit?

Clare_Guy

On Vincent Browne last night there was an economist from DCU who Vincent was asking how much money could the government raise from various tax increases.

For every 1% increase of income tax in the lower rate he estimated that it would raise an extra €500 million per year.

For every 1% increase in the higher rate of tax, he estimated it would raise an extra €250 million per year.

A Property Tax of €1000 per household is estimated to raise €1.5 billion per year.

So if the government increases the income tax rates by 2% each and introduces the property tax that will bring in an extra €3 billion per year.

The budget deficit will probably be over €20 billion.

Obviously an extra €3 billion per year is not going to make much difference to the deficit so my question is, What can we expect the government to do? Even more punitive tax increases? or, as everybody else, apart from the government and public service unions, seem to realise, a drastic cut in government expenditure?

Cut in public service numbers. Cut in capital projects (metro north anyone?) A ceiling on public service pay of €150,000 per annum. Cut in expenses. etc. etc.

What do you think?

Zynks

I think they are choking the country. Higher taxes will reduce economic activity and tax intake further, creating a vicious circle that will only stop when someone decides enough is enough.
Mr. Cowen said today that we can expect unemployment to go up to 450,000. It is not just the dole related costs, but each of these unfortunate new additions to the dole are switching from net contributors to net beneficiaries. The cost is massive.
The deficit in the budget is up to close to €10,000 per worker per annum. Switch another 20% of the workforce to job seeker status and this could increase the deficit by another €6 billion or so. What next????

Darragh29

Clare_Guy wrote: »

A Property Tax of €1000 per household is estimated to raise €1.5 billion per year.

I'd go to jail before paying a property tax. We pay 1.5K a year in property maintenance charges a year. I'm not paying another 1K a year on top of that, on top of a mortgage, just to have a modest roof over my head. Go f*ck yourselves Cowen & Lenihan if either of you think you're getting a cent off me for my property, you already made enough off me in stamp duty and VAT, I'll happily go to the Joy and run up 250K a year there for you to keep me these, you pair in incompetent wasters.

eoinbn

I think they will raise the upper rate of tax by twice the lower, so 22%/45% after the budget. €2 billion.

Property Tax is a nonsense imo. Especially if it's €1000 per house, regardless of it been €150,000 or €5m house. Then if you go on value you run into the problem of the garda/nurse in Clare paying 1/2 the tax that someone in Dublin, who are on the same wage with a similar home. Stick to income tax, at least until after the elections!

Welfare: We are in dreamland. I was talking to a english mate and he was saying his friend lost his job and was on £90 every other week. I told him that it's ~£170 here and he thought i was talking monthly not weekly! Cut to €175 with another €50 over the next 2 years. €500m.

Cig/Petrol/Drink taxs+cuts in capital expediture. €1.5b.

total=€4billion.

gurramok

You won't get that on drink or cigs.

Publican trade is on its knees due to high prices, the offys are only just about surviving and we all know the hordes going north to get their booze.

Cigs won't work due to huge smuggling.

Petrol, well if that goes up, people will spend less on petrol. Hiking it last time by 8c only brought in about €60m or was it €160m?

Hiking up the old reliables won't work this time.

newname

I'd go to jail before paying a property tax. We pay 1.5K a year in property maintenance charges a year. I'm not paying another 1K a year on top of that, on top of a mortgage, just to have a modest roof over my head. Go f*ck yourselves Cowen & Lenihan if either of you think you're getting a cent off me for my property, you already made enough off me in stamp duty and VAT, I'll happily go to the Joy and run up 250K a year there for you to keep me these, you pair in incompetent wasters.

I'm with you on this one darragh - after just building my house and throwing €6000 for development contributions, stamp duty on the land, VAT on everything from labour to nails. I'll be beyond raging if they try to take another €1000 a year of me just for having the gall to have a roof over my head.
I say run the incompetent oafs out of town if they bring that in.

Langerland

With regard to Public Service reform, I would say a pay + Recruitment freeze for 5 years. That should bring it back into line with the private sector, reduce costs and improve competitiveness.

Some departments/areas are over grossly staffed, but I acknowledge that some are under staffed. Therefore, over the next 5 years, let natural attrition take its course. Restaff vacancies with surplus from other areas where qualifications and experience fits. This may require people to relocate.

In posts from Public Service workers in another thread, it was interesting to see that many are disillusioned with the lack of opportunities in the public service, the unfairness of the promotion process, sometimes lack of work and so on. Having some kind of strategy that broadly follows the above would gradually move the public service to a more manageable (and lower cost) platform without too much upheaval.....

ongarite

Get rid of the Early Childcare Allowance. It was the ultimate vote winner in 2007 but unnecessary as we are heading back to single income households again.

Cut tax bands and increase taxes to 23/46%. Tax band at €18,000 is far too generous and will have to be slashed back down to 12,000.

Can only claim back standard rate of tax instead of top rate for pensions, VHI, etc..

Reductions in dole & child benefit or keep same child benefit & tax it at standard rate.

gurramok

And tackle Rent Allowance. It was about €500m last year into the pockets of landlords.

Reduce the amount paid as the rental market is on the slide, hence substantial savings can be made.

Ironbars

€1 tax on golf balls

steof1984

I would introduce a new 3rd rate of tax for high earners earning over €100,000. something around 55%

I would raise the current 41% tax rate to perhaps 48%

I would also introduce a property tax only on homes above €500,000 and on people with multiple properties.(any part time property tycoons)

I would abolish stamp duty and introduce Capital Gains Tax on the sale of properties

I would look at the V.A.T in this country. There is too much money lost in V.A.T by people shopping up north.

I would look at Tax Loopholes in lucrative industries (Blookstock, Horse racing,arts) and remove them where possible or reduce them

I would look at the allowances TD’S and Ministers can claim
If they are too much ,20,000 to chair 10,000 to vice hair an Oireachtas committee
Ensure reciepts are provided for all expences. If for nothing more than transperacy.
Stop them using helicopters, the “hours” piloits need can be used in a mid regional hopsital rushing patients etc
Hard for the public to accept a minister telling us we need to be prepared for a drop in living conditions when they can claim tens of thousands in unvouched, untaxed expenses. This will show we are all in this together not a “us” and “them” divide

I would look at lowering Corporate tax to 11% to make us more attractive to MNC

I would raise the standard rate of tax by 2%

I would also tax the lower income earners say anyone earning over €12,000 a year tax them at 8% or 10%

Would also reduce the welfare allowance and single parent allowances. By the way the fact rent has dropped in the country recently has the amount welfare pay in rent for those unmarried mothers dropped? Just a thought

Idiots who appear in court for breach of the peace (where someone hasn’t suffered physical injuries) id fine them €x amount, and split it between the state and charity

Set up a task force to close the loopholes for Tax Exiles

Set up a task force to catch out welfare fraudsters

Not sure how much it would generate but a good place to start i think

Topmail

All these extra taxes are going to bring this country to a stand still. How much more can the average income earner take, its just not one tax we pay look at all the hidden taxes. No one is saying how they will get the unemployed back to work. No one will set up new businesses in this country in its present state. No one seems to be able to develope a long term plan to get us out of the mess caused a choosen few.
Is it time to close the door and last one out turn off the lights. Ireland is in [EMAIL="S@@T"]S@@T[/EMAIL]

ongarite

Topmail wrote: »

All these extra taxes are going to bring this country to a stand still. How much more can the average income earner take, its just not one tax we pay look at all the hidden taxes. No one is saying how they will get the unemployed back to work. No one will set up new businesses in this country in its present state. No one seems to be able to develope a long term plan to get us out of the mess caused a choosen few.
Is it time to close the door and last one out turn off the lights. Ireland is in [EMAIL="S@@T"]S@@T[/EMAIL]

The "average income earner" monthly outgoings have never been lower. Mortgage rates have been slashed in the last 6 months (knocking 300-400 of monthly mortgage payments) and will be cut further. Cuts in ESB and Bord Gais of up to 19% & 12%. Petrol, diesel & home heating oil are the cheapest they have been in 2 years and costs of food and clothes are falling.

People should have more cash in the pocket than ever before but are afraid to spend it and thats the big problem at the moment..

howamidifferent

Ironbars wrote: »

€1 tax on golf balls

So, as well as paying for their golfballs (expensed as promoting industry doncha know) we'd have to pay an additional tax on them as well?

howamidifferent

ongarite wrote: »

People should have more cash in the pocket than ever before but are afraid to spend it and thats the big problem at the moment..

Should have...only in many cases they will be trying frantically to pay down any loans they may have before the problems get any worse...

steof1984

some people are on fixed rate mortgages so while interest has gone down, for those poor souls they are still stuck paying the high interest . Yes electricty and gas is about to come down but how long has it taken them to drop it . it didnt take them that long to raise it.

We all know were in the ****, as for how much noone is sure.Hell even the Government cant know

But we need to hit the higher incomes first

if you take 25% off somone on €100,000 they still have €75,000
if you take 25% off somone on €25,000 they only have €18,750

so its gotta ba higher on the higher incomes and as little as possible on the low incomes.

Darragh29

newname wrote: »

I'm with you on this one darragh - after just building my house and throwing €6000 for development contributions, stamp duty on the land, VAT on everything from labour to nails. I'll be beyond raging if they try to take another €1000 a year of me just for having the gall to have a roof over my head.
I say run the incompetent oafs out of town if they bring that in.

They're like a pair of heroin junkies the two of them (Cowen & Lenihan), you give them what they want and they look at you like the pair of dopes that they are, moaning, "we want more, givvus more, mooorrreeeeeeeeeeeeeeeee"...

It isn't my problem now that the two of you have p*ssed the taxpayers money all over the world on junkets and the like...

cavedave

Taxing Cannabis~250 to 500 million

The amount of cannabis usage can be estimated from the amount of seizures "Cannabis resin valued at €48.7m was seized". Between 10% and 5% of all drugs are seized according to internationally agreed figures. So this means that the current cannabis market in Ireland is worth conservatively around 500 million Euro.

This 500 million could make how much tax for the exchequer?
Profits on cannabis is unlikely to be as high as the 400 times mark up on heroin.
This can be evidenced by the lack of cannabis dealers shooting each other. Still as this is an illegal drug it is reasonable to assume the costs of the actual product are minimal.

So if the legal seller of cannabis took half the cost to create and distribute the product and the exchequer took the other half in tax (this is a conservative estimate of the possible tax take alcohol is roughly 1/3 maker, 1/3 supplier 1/3 government) then at a minimum 250 million Euros in tax could be gathered each year from current levels of cannabis usage. 250 million is about 1% of the expected debt.

moonstone63

For those who believe in the power of the people.

Sorry for not strictly sticking to the thread but I've had enough of the political situation - as many others

Why is everybody complaining about the actual situation and nobody is acting?

The Irish People once demonstrated that it is possible to change - why not now?

If you really believe that this government has to change let's take to the streets - we need a massive national demonstration, (just as starter - the revolution later) organized by the people and not by unions or whoever represents a group.

It is the People that vote - and that vote should have a weight.

Silly example: if I amnot happy with the quality of the lunch I had I will go somewhere else- why can't we do the same with the government ?

It seems to me that we all need a wake up call - what's the use of complaining on "Liveline" and then let things go on as they are?

The "power of one" is not just about saving energy - and I'd love to see one million people on the streets of Dublin asking for some real change.

harsea8

moonstone63 wrote: »

For those who believe in the power of the people.

Sorry for not strictly sticking to the thread but I've had enough of the political situation - as many others

Why is everybody complaining about the actual situation and nobody is acting?

The Irish People once demonstrated that it is possible to change - why not now?

If you really believe that this government has to change let's take to the streets - we need a massive national demonstration, (just as starter - the revolution later) organized by the people and not by unions or whoever represents a group.

It is the People that vote - and that vote should have a weight.

Silly example: if I amnot happy with the quality of the lunch I had I will go somewhere else- why can't we do the same with the government ?

It seems to me that we all need a wake up call - what's the use of complaining on "Liveline" and then let things go on as they are?

The "power of one" is not just about saving energy - and I'd love to see one million people on the streets of Dublin asking for some real change.

trouble is who do you replace the government with? Labour and FG haven't a clue how to get us out of this mess. If anything they have less ideas than Cwen and co, but are in the fortunate position that they can just berate FF without coming up with suitable options for raising 20 billion themselves. Holding demonstrations and forcing a GE might appease peoples anger, but in the meantime the country will sink further into the red and more people will loose their jobs. Unfortunately, we all have to face the fact that the damage has been done and unless we want a return to the Ireland of the 70s/80s we have to take a hit on our personal finances (and even with that hit we are going to see some similarities to the bad ole days).

ardmacha

They're like a pair of heroin junkies the two of them (Cowen & Lenihan), you give them what they want and they look at you like the pair of dopes that they are, moaning, "we want more, givvus more, mooorrreeeeeeeeeeeeeeeee"...

That is fine if you have a mé fein approach, the issue is not how much you give but how much is raised from everyone and spent on everyone. With people becoming unemployed and people not buying things like cars and houses that raise a lot of revenue other people are paying less. Giving out about junkets may make you feel good, but the entire cost of junkets is of no consequence to the overall total. Solutions are needed, not people sounding off.

Darragh29

ardmacha wrote: »

That is fine if you have a mé fein approach, the issue is not how much you give but how much is raised from everyone and spent on everyone. With people becoming unemployed and people not buying things like cars and houses that raise a lot of revenue other people are paying less. Giving out about junkets may make you feel good, but the entire cost of junkets is of no consequence to the overall total. Solutions are needed, not people sounding off.

Before I run with any of this, I want to know that our money is not being carelessly and wantonly p*ssed and shat all over the place, because from what I've been seeing, this is what has happened, is now happening and will continue to happen until this government are thrown out of Leinster House...

Only in Ireland would the second highest person in government tell you on a Monday that the government finances are in control and on a Friday, you would hear from her boss that the same finances are absolutely all over the place and we will need another budget! What way is this to run a country???

How in the name of Jasus can you expect people to have confidence and start spending again when the apes down in the zoo know more about the public finances than the two people who are meant to be running the country???

Sleipnir

eoinbn wrote: »

Cig/Petrol/Drink taxs+cuts in capital expediture

I think before we start thinking about putting yet more tax on the pint, how about we end the disgrace that is the subsidised Dail bar?

Why is it that during these times, we are STILL expected to pay part of all the government's booze? We pay tax, and these high-earners use some of that tax to pay for their drinks? In a recession!

I know it won't save all that much money but it's not right.

Darragh29

harsea8 wrote: »

trouble is who do you replace the government with? Labour and FG haven't a clue how to get us out of this mess. If anything they have less ideas than Cwen and co, but are in the fortunate position that they can just berate FF without coming up with suitable options for raising 20 billion themselves. Holding demonstrations and forcing a GE might appease peoples anger, but in the meantime the country will sink further into the red and more people will loose their jobs. Unfortunately, we all have to face the fact that the damage has been done and unless we want a return to the Ireland of the 70s/80s we have to take a hit on our personal finances (and even with that hit we are going to see some similarities to the bad ole days).

What really troubles me about this is that people are looking at what has happened and forming the view that a mistake or years of mistakes have been made, and we will have to take a hit for a while "to kind of go backwards a bit so we can start going forwards again".

I don't think this is what is happening here. I think, and this is just my opinion, but I think we will spend the next 10-15 years trying to get over this. Those of us working will be saddled with higher taxes and a lower standard of living, but we will be the lucky ones. Many of us not so fortunate will see the remainder of our working lives hopelessly tied to unemployment and living with the indignity of a life drawing social welfare, unable to give our families the lives they deserve, instead living from week to week trying to make ends meet.

I'm afraid for me, it's not just a case of the government saying "sorry 'bout that lads, we might have f*cked up a little bit there, now c'mon, upwards and onwards..."

My take on this is very simple: "You've completely f*cked up the entire country and we'll be spending the next 10-15 years sorting it out now and many many people will suffer greatly, so get yourselves and your spot creams and get the f*ck out of our sight".

As Alan Sugar would say: "You're Fired!"

Darragh29

Sleipnir wrote: »

I think before we start thinking about putting yet more tax on the pint, how about we end the disgrace that is the subsidised Dail bar?

Why is it that during these times, we are STILL expected to pay part of all the government's booze? We pay tax, and these high-earners use some of that tax to pay for their drinks? In a recession!

I know it won't save all that much money but it's not right.

WHAT????????? THEY HAVE A SUBSIDISED DAIL BAR?????????????????????????????????????????????
AAAAARRRRRRRGGGGGGGGHHHHHHHHHHH!!!!!!!!!!!!!!!!!!

:mad::mad::mad::mad::mad::mad::mad:

RealityCheck

This country has completely fooled itself. It will be a miracle at this stage if we can pull it out of the fire. My take on it is we wont. The only thing any government can do is cut costs, increase taxes and hope for the best.
However FF are 100% responsible for this mess. They left us in the worst position possible. FF try to tell us what a strong position we are in to weather this however we are one of the most indebted people in the world. Eating tomorrows dinner today is not wealth. Having a fine suburban house with a 30/40 year mortgage over your head is not wealth it is slavery and will leave a lot of people in Poverty. This is what FF have left us with. Thanks for that:mad:

Cardinal Blue

Someone said a 5c tax on all text messsages.

so how about a 10c tax on all posts?.

how much would that make?.

TGPS

They should do a little bit of everything - there is no one solution that will get us out of this. I'd suggest:-

1. Increase the marginal rate of tax to 49%
2. Increase the base rate by 1%
3. Increase the income levy by 1%
4. Freeze social welfare payments, tax bands and tax credits for 3 years & repeal over the same period the lump sum payable for young children
5. Close all property related tax loopholes and shelters
6. Make vendors liable for the stamp duty on property transactions
7. Intorduce a voluntary redundancy and redeployment schemes across the public service, but especially for the HSE
8. Pare 1 billion off the National Development Plan
9. Cut (yes CUT) corporation tax by 1%
10. Reduce the number of quangos / semi-states etc by at least half

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