An Bord Snip Nua

P. Breathnach

cyclopath2001 wrote: »

... I'd be interested to know what Dr Walsh hopes to gain by going to all this trouble to publicise his views?

A fee from the newspaper. We give our views here for free.

And he says "French school teachers receive 75 per cent less take-home pay than their Irish counterparts." That's total bollocks.

pearcider

It only took until the end of the first paragraph for pearcider to get personal, and label those who earn a lot, c***s. Economics isnt so personal you see - deciding economic policy you must do whats best for the economy. However it is imminently clear that pearcider isnt doing this. By the very nature of him labeling certain groups c***s, it shows his views do not seek the best economy, but rather those policies that would merely hurt those he dislikes the most. Of course within the terms of this discussion, that amounts to shotting himself in the foot.

But when you consider the evolution of this crisis and it’s well heralded causes, you can hardly find fault with my contention (that the top 10% are cnuts). We’ve come off a 15 year domestic and global boom – the money that has been made by the top 10% is phenomenal. There were 30,000 millionaires in 2006. If you include the value of their PPR, the number rises to 100,000. With a workforce of circa 2 million – these are jaw dropping numbers. It made us the wealthiest country in OECD save Japan. All I’m saying is that these people were being taxed at a miserly rate in comparison to other developed nations. Even the extremely wealth friendly Japan taxed them more and Japan has an infrastructure and economy literally decades ahead of us. We don’t even have a decent motorway network never mind everything else. In comparable countries, the rich are taxed at top marginal rates of 50-60%. Our effective rates are still below 50% - and were considerably lower during the boom when public spending was rightly increasing after decades even centuries of underinvestment. The Corporation tax rate is a mere 12.5% when the global average is much more like 28% - the OECD average is higher again. The rates are only so low because the Government took the foolish decision to fund our expensive but lets be honest required social development plans with boom dependent consumer taxes like VAT, VRT and stamp duty rather than the more reliable direct taxes.

Now the boom is over, we are faced with a choice.

1)Halt our social programmes and risk the higher crime, the rising poverty level, worsening education level etc that swinging cutback entail. We already have the most potentially explosive social timebomb on our hands anyway with our at risk of poverty rate being the highest in the EU back in 2006. Also tackle the PS head first and break the power of the Unions in pursuing the suggested 10.5% pay decreases for our nurses, teachers and gardai. Keep the tax rates the same or make marginal changes in terms of introducing taxes for property, water and maybe carbon.

2)Continue our social programmes while cutting out the waste in surgical manner (2.5B is fair), raise taxes to the levels of similar countries like Denmark or the UK, get rid of hand outs to the wealthy (blanket child benefit, funding for private schools, education grants to the self employed who are under declaring their income, handouts to rich farmers – we paid them hundreds of millions above the odds for the land that the motorways were built on and we continue to fund them unjustly through the CAP,) operate NAMA in an aggressive fashion to squeeze our developers for all they’re worth – put these people in prison and get CAB to seize the gaffs on Aylesbury rd if necessary. Then introduce reverse benchmarking to bring the public pay down to a level with the private sector that is engaged in similar work. I’d also be in favour of capping public sector pay at the top (that included the CEOs of the nationalised banking sector). If competitiveness is the issue, lets tackle it by starting at the top. Another thing to remember is these cnuts will never learn.

Now as far as I can see, one of these courses is both sensible and justified and the other one will lead to the probable destruction of our society.

I have pointed out multiple times on this board the last few days the importance of the higher rate of tax in determining investment. Firstly, foreign companies coming here want a higher tax rate that will encourage the best business men in the field to come and work for them. If an American business man sees Ireland has a huge income tax rate, he simply wont come to be employed. Thus does it become unfeasible for the company to set up here.

That’s a nonsense argument, which could only hold water at the margins.
For starters, companies don’t come here for our income tax rates (which are competitive in comparison to Denmark, Sweden or Holland), rather they come for our IP laws, our ridiculously low CT rate, our young, dynamic and educated workforce (20% of our population under 14 years and a very high rate of 3rd level education completion), our strategic location, our fully fledged membership of the European market, our decent if improving infrastructure, our thorough network of tax and trade treaties with the rest of the OECD, our stable English speaking society, our pro business environment and of course our weather. :P

Your point also assumes the best business men come from nations with more relaxed taxation regimes than us – but I have already pointed out that there are no such nations. Hundreds of large companies have shifted their official bases here to avail of our relaxed legislation especially in light of President Obamas and Prime Minister Browns significant movements against tax havens – which are estimated (conservatively) to sequester 15 trillion dollars annually (which corresponds to a tax take of 250billion).

Why we need American businessmen to come here is beyond me anyway – don’t most US companies hire Irish or Brits to run their Irish or European branch? My other point in relation to this also stands. Assuming they had the option to earn their money in the UK or the USA (and I would suggest this makes little difference to a persons desire to work in one place – there are so many other factors to consider*), the UK’s tax burden is higher than ours and the US will be very shortly – as Obama attempts to tackle the largest national debt in the world. So if we already have a competitive tax regime in relation to these two and our other European neighbours – how can your argument hold water?

*They’re far more likely to make the move to Ireland if our society is deemed safe and stable, they have family connections here, the public services and general infrastructure are at least EU15 class, even wealthy citizens pay their debts and their children are not in an overcrowded classroom.

Secondly, corporation tax only applies to companies. If your a sole trader, for instance, corporation tax means nothing. So the profits depend solely on income tax. If this is higher, profits go down. Thus, new entrepreneurs dont set up business (dont create employment) and current business close (longer dole ques).

I’m well aware of this being a tax professional. BUT, even for our (non vital) sole trader sector, they paid small income tax rates through the boom in comparison to other nations and were the prime beneficiaries of many tax breaks, cuts and incentives introduced throughout the late 90’s/early 2000’s by the cronies in FF. You also conveniently forget that the sole traders can write off many indirect taxes and expenses that the PAYE guy cannot. There is also endemic tax avoidance and evasion in this sector – just look at all the judgements for the Revenue every month. The Revenue also take a very relaxed hand with these type of sole traders offering them way too much leeway imo to make voluntary disclosures and avoid interest and penalties etc. The clever sole traders consolidated effective tax rate was probably circa 20% during the boom.

A quick example to illustrate my point…
A sole trader with taxable profits of 100k, in 1999/2000 paid 41kin Income Tax, PRSI and levies (assuming he is married and has no other allowances) But if he set up a business and paid himself a 40k salary out of the profit his tax on profits was reduced to 19k or so (including the PREM paid on salary!) Yeah that’s right 19% on profits. Trust me when I say that the vast majority of cute hoors in this country were doing the latter. Show me a international regime that was so favourable. Assuming he availed of all his tax breaks; he would have been laughing. Naturally being Irish he threw his money into property instead of investing in innovation and jobs… You know turgon, you’re making the same mistake that the banks made in relation to the Irish business class, you’re giving them way too much credit! :rolleyes:

I dont really get this. What "folly"? Your very loose with your description of "rich." In fact the people you label rich only account for a tiny fraction of those on the higher tax band. Just because some people on the higher tax band abused their position, it is not rational to increase the tax on all.

So where do we make the 15+Bn savings from – if tax increases are out?

It is rational if our rates are too low in the first place and you insist on not touching the 12.5% rate when in reality 25% would be more appropriate.

The tax increases are also justified (even compulsory) in light of our obligations to Anglo, BoI and AIB under the banking guarantee. We’ve already sunk half our nations welfare budget (circa 10Bn) into these institutions – within which both shareholders and employees made a KILLING over the boom. The wall street style bonus culture was prevalent in these institutions throughout the Celtic Tiger – now that we have the extraordinary position of the state supporting them, where is the general publics pound of flesh? If we can’t take the pensions off Fingers Fingleton and Seanie Fitz et all and they refuse to stand up and admit they were wrong, we better at least raise the tax rates on them. This will need to happen before we can hit the PS with negative benchmarking. Otherwise another key reason for the boom is finished and the country goes one step closer to collapse. People need to see economic justice. And economic justice starts with taxing those who can afford to pay.

I would contend that most people on the higher tax band have abused their position over the past decade whether by pumping the domestic and international property markets, investing in ponzi schemes on stock exchanges abroad as well as good old fashioned tax avoidance – which is ****ing rife in this republic of ours.

Also you’re missing my point that these people were paying feck all in relation to other countries during the boom and yet were watching and dare I say it benefiting from the fruits of the boom being expended and the associated better services being provided; more Gardai, reduced class sizes for their children, a whole motorway network, the LUAS, vastly superior train networks and bus services in addition to Section 23 tax breaks, SSIAs (which overwhelmingly favoured the rich and upper middle class) AND the lowest effective tax rates in the OECD. We could have it all. Or so we believed.

And they’re still paying feck all; an individual on €80,000 will have an effective average tax rate of 36% for 2009 – after the most recent levies. You’d have to search long and hard to get such a sweet deal among our peers. And these are peers that have been richer and developed for much longer than we. They don’t need the kind of sustained investment that we require.

There is a significant rationale for privatization of state assets (such as increases in efficiency and cost effectiveness) but I got a feeling you don't want to here about that. Its easier for you to "close one eye and be king."

I knew you’d say that! Of course I’m sure you could make an excellent case for selling off our national assets in the midst of a global asset crash but that is definitely another debate for another day…which I have no doubt will come soon - the howling in the media will commence roughly as planned in Q1 2010. After all, they did an excellent job of British Rail and Eircom. What could possibly go wrong eh? Private sector style efficiencies here we come! I look forward to knocking another 10% off my ESB bill.

I feel a quote from Mr Keynes is appropriate:

For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable.

I look forward to the debate mate.

I didnt say that. I said now that the money is gone, the government should back peddle and rationalize government spending.

Which is exactly whats gonna happen. But if you think that we can “rationalize” 20B or even 5B of cuts without huge risks & some serious pain for the most vulnerable and innocent of our citizens, you are wrong.
All I’m saying is hit the wealthy hard (as hard as they’re being hit in other countries) and then make the cuts necessary to avoid bankruptcy. Sure, not all the wealthy are guilty. I’m sure many avoided pumping the property bubble to the detriment of their own children. I’m sure many avoided changing their Merc every year. I’m sure many reinvested the money in their legitimate, tax compliant businesses.

But actually seeing the carryon in this country since 2000, I very much doubt that.

Who needs economics when we have petty hatreds and jealous grudges?

[font=&quot]After the excellent non performance of mainstream economists over the past few years, I think many ordinary Irish people are asking themselves the same question? Who the hell needs an Austin Hughes when we could just reach for the tea leaves or engage in a wee bit of astrology ourselves? At least trusting to fate, we’d get it right 50% of the time, instead of wrong every time.

And calm down about the “greedy cnuts” comment. I apologise for it. Now have a glass of Dom Pérignon and relax for Gods sakes.:pac:[/font]

Time Magazine

pearcider wrote: »

After the excellent non performance of mainstream economists over the past few years, I think many ordinary Irish people are asking themselves the same question? Who the hell needs an Austin Hughes when we could just reach for the tea leaves or engage in a wee bit of astrology ourselves?

March 2005, the Quarterly Economic Commentary warn of over-heating in the housing market, calls for a tax on property to "reduce demand pressure from this quarter, helping ease house prices. This in turn would enhance the productive potential of the wider economy."

August 2005, the Economic and Social Review warns that the "boom in house prices ... could significantly reduce the growth potential of the economy, shifting the balance of labour market growth from employment to wages, with a consequent deterioration in competitiveness."

I'm sure you can find the constant references to a fiscal over-reliance on construction yourself in pretty much every ESRI quarterly commentary since about 2006.

April 2007, Bertie ignores warnings by economists about the state of the economy.

Just because you didn't know that academic economists were warning, and that you listened to somebody employed by a bank instead, didn't mean that economists didn't raise the appropriate flags.

pearcider

Just because you didn't know that academic economists were warning, and that you listened to somebody employed by a bank instead, didn't mean that economists didn't raise the appropriate flags.

In fairness, all those ESRI reports basically hedged their bets and reaffirmed the fundamentals like any good economic report will do in a boom. Criticism of government policy was muted at best. I reckon 2005 was past the point of no return anyway for Irish property - considering the smart money had all but exited by that time. Even the dog on the street was hearing the rumours of the fabled soft landing in property by 2005. From then on, it was essentially a rear guard action until the credit crisis stripped away the mass collective delusion in the most dramatic fashion.

luckat

Eire_prince wrote: »

the artist excemption scheme can be modified so once the artist has established themself then they should have it removed after say a period of 7 years, like mortgage interest relief

Eire_prince, the artists' exemption scheme is already capped, so if an artist earns good money tax kicks in. That's why U2 moved to the Netherlands and became tax exiles - they moved the second it was changed.

Eire_prince

so is the cost of living over here, the government showed how great it was at managing the economy last year, when britian reduced their VAT, what did ours do, they raised it, therefore making it more expensive. and dont forget we are being ripped off all the time.

not much as been said about irish and multinational companies taking their main body of business aboard due to costing and labour, I have yet to see major reduction in the overall price of the product.

what bout tesco, could they be buying irish product cheaper in the uk, then shipping it back to ireland and it still works out cheaper than buying it here, how do we know they aint been doing this anyhow.

why not limit family allowance just to the first 2 kids any more then the onus of support is on the parents to provide support, one problem is some irish families have more than 4 kids and they are unemployed

Eire_prince

though it might be capped, but allowing them a tax relief of €250.000.00, and ordinary workers pay tax at far less magnitude.

so what to stop an artist ensuring his returns are kept inside the allwance limit when posting their return.

Example 1

Individual with exempt income only in 2007.
Mr. A is a writer who has earned €200,000 net of expenses from his novel writing. He has no other source of income. As Mr. A’s exempt income does not exceed the threshold of €250,000 it will continue to be treated as exempt and there will be no change in his position.

Example 2:

Individual with exempt income and taxable income in 2007.
Ms. B is a painter who earned €240,000 net of expenses from the sale of her original paintings (exempt income) and €50,000 income from her job as an art teacher. As her exempt income is less than the threshold amount of €250,000 the full amount will continue to be treated as exempt and she will pay tax on her teachers income only.

Example 3:

Individual with exempt and taxable income in 2007.
Ms. C. is a singer and songwriter. She earned €400,000 net of expenses from her performances (taxable) and €300,000 net of expenses from her song writing activities (exempt). Even though her exempt income exceeds the threshold of €250,000 she will not be affected by the restriction because her taxable income is greater than her exempt income.

Example 4:

Example 4: Individual with exempt income only in 2007.
Mr. D is a composer but not a recording artist. He earned €1,000,000 net of expenses from his musical compositions. Prior to the introduction of the restriction all his income would have been exempt from income tax. However, as Mr. D's exempt income exceeds the threshold of €250,000 the restriction would apply. He must therefore work out his "adjusted income" for 2007 by adding his exempt income of €1,000,000 to his taxable income.

Spiritoftheseventies

pearcider wrote: »

In fairness, all those ESRI reports basically hedged their bets and reaffirmed the fundamentals like any good economic report will do in a boom. Criticism of government policy was muted at best. I reckon 2005 was past the point of no return anyway for Irish property - considering the smart money had all but exited by that time. Even the dog on the street was hearing the rumours of the fabled soft landing in property by 2005. From then on, it was essentially a rear guard action until the credit crisis stripped away the mass collective delusion in the most dramatic fashion.

Can you wrap it up please. Closing argument if possible

luckat

Eire_prince, the majority of writers in Ireland earn under €200 a week. The Artists' Exemption Scheme is not a worthy target. Ending it isn't going to bring in millions, believe me.

What the scheme does, though, is bring a few wealthy and influential artists to live in Ireland - these are 'Tipping Point' people, influencers who can publicise the country and bring in business. It would be crazy to take away their reason for living here.

dresden8

luckat wrote: »

It would be crazy to take away their reason for living here.

Yes it would be crazy to ask rich people to contribute to society.

It turns out that taxes are only for little people.

What the hell were we thinking?

Eire_prince

yet bord snip suggest reducing social welfare see equality in that sense,

bayview we can blame everyone, but at the end of the day the government hoodwinked the elctorate into believing everything wasnt as bad as it was, so a majority of people voted them back into power, with the greens selling their soul and principles for a taste of government. we wont really see how bad things are till they are out of governement, same thing happened in the UK with the winter of discontent

Eire_prince

few years ago you had the SSAI's mostly the well off paid into it and then the governement gave them interest free, also if you paid the top rate of tax, you could reclaim a lot of it back through various excemption scheme, did the lower class get the same treatment

irish_bob

Eire_prince wrote: »

few years ago you had the SSAI's mostly the well off paid into it and then the governement gave them interest free, also if you paid the top rate of tax, you could reclaim a lot of it back through various excemption scheme, did the lower class get the same treatment

define the lower class

Spiritoftheseventies

irish_bob wrote: »

define the lower class

lower class i would have thought is the class below the working class.

Eire_prince

if I was refering to the upper class who pays so much in tax, yet are able to reclaim that tax through the variety of tax loop hole, dont think the middle, working class are able to do so.

I know there not meant to be a class system, due to the wording of the constitution that every man, woman and child is equal

irish_bob

bayviewclose wrote: »

lower class i would have thought is the class below the working class.

you mean the wellfare class , you dont think they have done well this past ten years

Spiritoftheseventies

irish_bob wrote: »

you mean the wellfare class , you dont think they have done well this past ten years

Lower class might be a politer term. Would not think its any fun being on the welfare. for most people anyway.

Eire_prince

about letting prisoners pay toward their keeps, as it cost a lot more to keep a prisoner inside, than a person on welfare, how about getting drug users to pay for treatment, surely this fund should go to better health provision.

cause poor students will be paying back fees long after they finish college if this was introduced, even better let Biffo start implementing Logan runs society, or a chinese society where all partners are only allowed 1 child, think how much this will save in family allowance, what bout couples who are cohabiting yet claiming one parent allowance.

or even northen Ireland having a pps number link to national insurance, good way to detect cross border bogus claims

a lot of stuff is tabooed dont want to upset the apple cart

irish_bob

bayviewclose wrote: »

Lower class might be a politer term. Would not think its any fun being on the welfare. for most people anyway.

150 thousand never worked during the boom , some must have thought it was better craic on the labour

ART6

Eire_prince wrote: »

about letting prisoners pay toward their keeps, as it cost a lot more to keep a prisoner inside, than a person on welfare, how about getting drug users to pay for treatment, surely this fund should go to better health provision.

Isn't that what the CAB have been doing for some time and quite successfully?

Eire_prince

they could have been doped to the eyeballs, but let take another look at definition of social welfare, as pensioners are included in this list and considering that they are living longer as well. yeah time to start logan run phase of an bord snip nua.

also let the catholic church pay for everything, at the end of the day it was their priest who did the abusing

Eire_prince

cab is going after the profit of crime, not for the cost of keeping them inside, another option is, if someone appeals a sentence for their crime, let double the sentence this will hopefully reduce the amount spent on appeals.

Spiritoftheseventies

yes taking a look at bord snip proposals here. And what is apparent is that there were far too many bodies to begin with. And here is a novel idea. How about one company director sitting on several boards for a fixed salary. that would be something.

nicola09

irish_bob wrote: »

those on social wellfare are not the ones who will get this economy out of the ditch

Nonsense. Ireland spends 37% of its money on Social Welfare, or 21 billion to be exact. I refer you to An Bord Snip Volume One....

http://www.finance.gov.ie/documents/pressreleases/2009/bl100vol1fin.pdf

It is glaringly obvious that cuts have to be made.

Eire_prince

you say social welfare accounts for 37% of cost, but how is this broken down, as social welfare covers a magnitude of payment, from supplementay, disability, pension, family support such as one parent, child allowance, rent supplement, job seekers farm assistance household benefit package.

alot of migrant and asylum people prior to 2 years ago are on social welfare, and send a good porportion back home to their family hence why the government changed the criteria for such payment.

and as stated earlier a larger portion of social welfare claimants are pensioners who are living far longer, hence why the government tried to change the criteria for over 70's medical card entitlement, as it was beginning to eat into the governement coffers.

so until a clearer view on social welfare payments are done it is wrong to assume that the entire 37% is purely spent on the unemployed, and it is not their fault that payments are as large as it is, as it was the government who did it to bribe the voters

irish_bob

nicola09 wrote: »

Nonsense. Ireland spends 37% of its money on Social Welfare, or 21 billion to be exact. I refer you to An Bord Snip Volume One....

http://www.finance.gov.ie/documents/pressreleases/2009/bl100vol1fin.pdf

It is glaringly obvious that cuts have to be made.

go back to sleep

Spiritoftheseventies

irish_bob wrote: »

150 thousand never worked during the boom , some must have thought it was better craic on the labour

some areas are more disadvantaged than others.

nicola09

Eire_prince wrote: »

you say social welfare accounts for 37% of cost, but how is this broken down, as social welfare covers a magnitude of payment, from supplementay, disability, pension, family support such as one parent, child allowance, rent supplement, job seekers farm assistance household benefit package.

alot of migrant and asylum people prior to 2 years ago are on social welfare, and send a good porportion back home to their family hence why the government changed the criteria for such payment.

and as stated earlier a larger portion of social welfare claimants are pensioners who are living far longer, hence why the government tried to change the criteria for over 70's medical card entitlement, as it was beginning to eat into the governement coffers.

so until a clearer view on social welfare payments are done it is wrong to assume that the entire 37% is purely spent on the unemployed, and it is not their fault that payments are as large as it is, as it was the government who did it to bribe the voters

Where did I state that 37% is spent on unemployment benefit?! I suggest you read more carefully. Our welfare payments are among the most generous in Europe. The Exchequer cannot fund this level of expenditure any longer. How is it relevant how the amount is broken down? Again, I refer you to An Bord Snip Volume One, where you will find an exact breakdown. Have you read it?

What do asylum seekers have to do with your argument by the way? Also, the Medical Card is an issue of the Department of Health, not Social and Family Affairs. I haven't mentioned health cutbacks.

And at Irish_Bob....if you have nothing to say that is relevant to the argument at hand then you should refrain from posting comments like "go back to sleep". (Sorry to the mods for back seat moderating, but it seems rather silly.)

Taxipete29

bayviewclose wrote: »

some areas are more disadvantaged than others.

What is it about being from a disadvantaged area that precludes you from seeking employment??

Eire_prince

comment such as Ireland spends 37% of its money on Social Welfare, would lead to that assumption.


What do asylum seekers have to do with your argument by the way? they do partake in a large portion to social welfare costing, such as fraudulent claiming such as multiple claims.

though you didnt mention med card, it is linked to social welfare either directly or indirectly, as the population lived longer therefore the entitlement to it was growing, as it was universal