Raising taxes doesn't improve Exchequer Figures

faceman

Proof is in the pudding.

http://www.irishtimes.com/newspaper/frontpage/2009/0806/1224252081757.html

The thing is, this comes as no surprise to many of us, yet the Government ploughed ahead and did it anyway.

If the government fails to intervene on banks increasing interest rates in similar vain to PTSB, this will further erode consumer spending power.

What will it take for the government to realise they need to adopt educated strategies?

ei.sdraob

raising taxes without tackling the big white elephants in the room would be a terrible joke

these danicing elephants are:

* Welfare
* NAMA
* Public sector

each one is fatter than the next

ardmacha

Proof is in the pudding.

Where is the proof. The figures are less than expected, but what does this prove., exactly?

* Welfare
* NAMA
* Public sector

There was a significant tax shortfall in VAT, reducing welfare etc will further reduce this, so exactly the same issues arise.

Euro_Kraut

Its possible that the extra taxes have prevented the Exchequer figures from being even worse again. Todays figure don't 'prove' the OP's statement.

To be honest, I'm not sure that the Govt had and realistic alternative in the short term but to raise taxes (as much as I hate paying them).

ei.sdraob

ardmacha wrote: »

There was a significant tax shortfall in VAT, reducing welfare etc will further reduce this, so exactly the same issues arise.

reducing taxes means people can spend more on the wider economy

see :cool:

Euro_Kraut wrote: »

Its possible that the extra taxes have prevented the Exchequer figures from being even worse again. Todays figure don't 'prove' the OP's statement.

To be honest, I'm not sure that the Govt had and realistic alternative in the short term but to raise taxes (as much as I hate paying them).

whats the point of raising taxes anymore?

its like pouring more water into a pot with gaping holes in it

doesnt solve underlying issues

Seth Brundle

ardmacha wrote: »

Where is the proof. The figures are less than expected, but what does this prove., exactly?

There was a significant tax shortfall in VAT, reducing welfare etc will further reduce this, so exactly the same issues arise.

You can't tax your way out of a recession! You need to stimulate spending to get taxes in (especially at a time when income tax receipts are going to be down)!

ardmacha

You need to stimulate spending to get taxes in (especially at a time when income tax receipts are going to be down)!

By any measure a government that is borrowing 11% of GNP is providing an enormous stimulus to the economy. Ideas for stimulating expenditure, without further widening the deficit, would be very welcome. What are these ideas? Even good things for the economy, such as declining prices and lower service charges, reduce the tax take.

Basically people fear they will lose their jobs, or have further pay cuts and so have reigned back spending.

NinjaTruncs

ardmacha wrote: »

By any measure a government that is borrowing 11% of GNP is providing an enormous stimulus to the economy.

But the money isn't being borrowed to stimulate the economy, it's been borrowed to pay the PS, SW and HSE.

ardmacha

But the money isn't being borrowed to stimulate the economy, it's been borrowed to pay the PS, SW and HSE

There is a proper argument as to the balance between tax cuts, PS pay cuts and SW cuts. But all of this money circulates in the economy and stimulates it, indeed there is an argument that people receiving welfare are much more likely to spend it and in the State than the people who are paying more tax, the latter might save the money or spend it on foreign holidays etc which would not stimulate the Irish economy.

indiewindy

ardmacha wrote: »

Where is the proof. The figures are less than expected, but what does this prove., exactly?

Taxes were increased and the tax take is falling. Point proven

NinjaTruncs

I know plenty of people who are on the SW and still go on foreign holidays. also the PS is a drain on the tax collected, in theroy the PS doesn't pay tax, sure it comes off their monthly wage, but it goes back towards paying there wage. If PS workers were paid tax free we would be in the exact same situation now.

DJDC

Anyone who has studied even basic physics will have heard of momentum. Right now the IMF train is heading towards Ireland and these figures only show its gathering momentum as the vicious circle of tax increases and lower tax receipts spiral out of control. Action should have been taken when things could have been stopped but right now its 50/50 if even drastic cuts can stop the inevitable default of Ireland Inc. Fortuitously I left the country in 2008 after college but it wasnt easy leaving my family and friends behind. The government betrayed my generation more than anyone. Looks like a lot more young people are going to be following the well travelled path soon..

Edit: Maybe I am overeacting. CDS spreads on Irish bonds show market has not increased expectations of Irish default dramatically. Also if UK and US show positive economic growth this quarter then....things could improve

turgon

Keeping tax low and drastically cutting spending is one of those things that has to be done and yet so many people are just unwilling to accept.

"Tax them for all they've got."
"They must pay more because they can."

How about a new slogan:
"Read an economics book before you try and dictate how the country should be run please"

djpbarry

indiewindy wrote: »

Taxes were increased and the tax take is falling. Point proven

Taxes were increased and it’s a nice day today. Point proven.

ardmacha

Taxes were increased and the tax take is falling. Point proven

Point proven how exactly> A single coincidence of events does not prove anything.

Plenty of people recently have been working longer, but are still receiving reduced incomes. What does this prove? Would they be better to work less?

gurramok

ardmacha wrote: »

Point proven how exactly> A single coincidence of events does not prove anything.

Plenty of people recently have been working longer, but are still receiving reduced incomes. What does this prove? Would they be better to work less?

They'll spend less with less money in their pockets.

Income taxes(levies) went up from 6% to 10%+ since October. Common sense says one cannot spend money they do not have and the snowball effect is seen with less spending.

ei.sdraob

gurramok wrote: »

Common sense says one cannot spend money they do not have.

while I agree with you post, just a note that:

common sense didn't stop millions of Irish getting into crazy debts