Predictions Thread

K-9

Shadowed wrote: »

I agree that a cut in VAT of itself will naturally not make peoples fear subside but I think that it may - and particularly if there was some sort of an excise 'amnesty' have a positive effect, if only to signal to the outside world that there may be room for a proper stimulus package down the road.

Also, while there are certainly going to be more job losses over the next year, from my experience certain sectors seem to be bedding down a bit again and their employees are feeling more secure and spending more. Before, I get lambasted for saying this, I say it as someone who joined thh dole queue myself 2 months ago. I have in recent times noticed there are more people in Dublin shops than I have seen in a long time - even taking Christmas into account.

I see what your saying but I think overall, you are applying boom time economics to a depression, not even a recession.

A VAT cut isn't going to suddenly make people forget about wage cuts and other cuts in income. Personally, I think people who want to shop in the North will, even with a 5% cut. Excise duty may help but it would need to be a massive cut. From looking at posts on internet sites, booze is a big factor in spending up North, particular near Christmas time.

I've seen myself more footfall in Letterkenny. I think it's more down to people shopping al right, but spending less. If they think they Can it cheaper up North, they'll wait.

I'd wait till January on the footfall point.

€500 Million isn't that massive a loss. Its big but the vast majority is spending is still here.

Daragh101

K-9 wrote: »

I see what your saying but I think overall, you are applying boom time economics to a depression, not even a recession.

A VAT cut isn't going to suddenly make people forget about wage cuts and other cuts in income. Personally, I think people who want to shop in the North will, even with a 5% cut. Excise duty may help but it would need to be a massive cut. From looking at posts on internet sites, booze is a big factor in spending up North, particular near Christmas time.

I've seen myself more footfall in Letterkenny. I think it's more down to people shopping al right, but spending less. If they think they Can it cheaper up North, they'll wait.

I'd wait till January on the footfall point.

€500 Million isn't that massive a loss. Its big but the vast majority is spending is still here.

its not just these taxes that make us a lot more expensive than the uk.
Its also the fact that companies tend to charge us about 20% more than they do in the uk, wvwn after the extra cost........Mabe its because of our high minimum wage, or the high wages in ireland in general..!...crazy stuff..

lmimmfn

ive a feeling they will throw a huge increase on DIRT to try and get people spending their savings, i agree VAT decrease wont cause everyone to run out and buy loads, but it should help a little bit at least.

My major problem is i would much much prefer them to load 3-4 years of tax increases all at once and promise at least 3 years of no tax increases or stealth taxes, it would give people at least a few years confidence knowing they wont have to continue sacrifying more and more over the next years.

K-9

Daragh101 wrote: »

its not just these taxes that make us a lot more expensive than the uk.
Its also the fact that companies tend to charge us about 20% more than they do in the uk, wvwn after the extra cost........Mabe its because of our high minimum wage, or the high wages in ireland in general..!...crazy stuff..

Yep wages, property bubble and not paying residential rates here. A few other things I'm sure too!

Darragh29

Dare I predict that the budget won't go through on Wednesday...

seamus

nesf wrote: »

Well, honestly I think they're backing the wrong horse if they cut VAT. People aren't not spending because VAT is too high, they're not spending money because they're afraid for their jobs/expect tax hikes/etc.

nesf wrote: »

Yeah but the weak Sterling is a far bigger factor than a few %'s difference in VAT. We can't compete with N.I. wage levels right now and that's a huge factor in the price difference.

I agree that the VAT rate is largely a red herring in the price disparity, but I believe that there's a psychological aspect to the VAT rate which makes people think we're being screwed.
19.5%, for example, looks way better than 21.5%, simply because it's lower than 20%.
15%, on the other hand, doesn't look a whole lot better than 17.5%, which is why the UK rate cut didn't have the confidence-boosting effect they wanted.

On top of that, some certainty is returning to consumers - prices are dropping, people are shopping around more and the rate of job loss has eased significantly. Most companies have restructured or died at this point, so most people know now where their company stands in economic terms. I think we'll be wary in future of getting our hands burnt, but people will be willing next year to spend more money than this year.

Maybe I'll be proven wrong. Or maybe they won't touch VAT


Couple of other things I forgot (mainly triggered by people below):

The levies currently have complex calculations on them, so I can see the levies being merged into the existing tax rates for simplicity. I don't have wage figures to hand, but the tax credits will be adjusted such that 75% of all PAYE workers will pay PAYE.
Possibly they might introduce tax credits "bands", where someone only working 3 days a week gets 60% of the tax credits of someone on a full week, thus bringing more part-time workers into the net. Not sure if that's feasible in practice though.

Minimum wage will drop by 10%, so €7.65?

There will be no third tax band.

The medical card debacle will be reintroduced with a tweak.

Dole will be cut to €195/week.

meditraitor

I can see a couple of small suprises,

Rent relief could be for the chop...

Union sub relief also,

Vat to be un changed

the rest is above

K-9

seamus wrote: »

The levies currently have complex calculations on them, so I can see the levies being merged into the existing tax rates for simplicity. I don't have wage figures to hand, but the tax credits will be adjusted such that 75% of all PAYE workers will pay PAYE.

I think that was the intention when the levies were introduced. Only thing is the income levies are on Gross wage, not after tax credits, so I think they may add a percent or two on to compensate. The income levy is after €15,000, a single persons tax credits would be about €18,500 so I can see them introducing a low tax rate of 5% on that gap.

blackbox

meditraitor wrote: »

I can see a couple of small suprises,

Rent relief could be for the chop...

Union sub relief also,

Vat to be un changed

the rest is above

Now that would be a kick in the goolies!:rolleyes::D

...has he got the nerve?

Tellox

Smart budget;
Slash welfare/benefits payments by a minimum of 10%
Raise minimum age to qualify for the dole to 23
Drop VAT a minimum of 2%
Price up the fags by 10-20c
Leave alcohol unchanged
Fuel up 5-7c
Introduction of a City Centre congestion charge

TD's try to save face in some way shape or form by taking a pay cut

What will likely happen;
Minor decrease in welfare/benefits payments (2-3%)
VAT remains unchanged/minor increase (0.5%~)
Fags up 15-25c
Alcohol gets a 10-20c increase
Fuel up 10c+

Speech about how the entire country must band together, ending with a thunderous applause. TD's laugh hilariously at us, Irish people continue moping/moaning under their breath and doing nothing about it.

I hope I'm proven wrong

thebman

They were saying on the news there that the government intend to reduce tax (duty really I guess) on alcohol and cigs.

Duiske

Can't see a drop in the price of tobacco products myself. Health crowd would kick up murder. And they can't increase too much because the smugglers are ready and waiting. Maybe 50c increase on pack of 20 ?.

I think a cut of 4% ( €8.16 ) on the basic rate of SW is a gimme at this stage.

10% cut in child benefit. (4% for those on Social Welfare)

Fuel Allowance to be cut by €2.

Health and Education budgets cut by 5%

Scaled cuts in Public Service pay. 5% on up to 60k. 10% on up to 120k. 15% on up to 200k, and 20% on above 200k.

Merging of a number of state agencies.

Up to 20% reduction in funding to Arts ,Sports, Culture and Tourism agencies.

Edit : Just from thinking about how much some of these cuts would save, its going to be one hell of a tough job to try cut 4bn from the budget.

Darando

I will go for the sneaky ones rather than the headline grabbers. Won't bring in much but will be done while our eye is on PS/SW cuts.

DIRT - from 25% to 27% (in vain attempt to get people with some cash spending)

Insurance levy: from 3% to 4%

Thresholds for CAT reduced by 5-10%

and the last one just to irk the unions - Trade union subscription abolished !! (along with some other similar allowances)

electrogrimey

Ecomonist on Prime Time, and some other leaks, are predicting a decrease in price of alcohol, to combat people going to the North for it, I'd like to see a decrease in the price of cigarettes for the same reasons, Irish prices are at least a good €2 above the rest of Europe.

lmimmfn

electrogrimey wrote: »

Ecomonist on Prime Time, and some other leaks, are predicting a decrease in price of alcohol, to combat people going to the North for it, I'd like to see a decrease in the price of cigarettes for the same reasons, Irish prices are at least a good €2 above the rest of Europe.

i think this would be good, i mean blah blah health/society problems but compared to the fortune thats being lost on the black market and up north on both of these its better that we get the revenue. Id say i bought 1/3rd of my cigs in ireland this year and probably 60% of booze, if they decreased both it would really be more hassle to shop up north unless i was going up for a high expense item like a tv or something.

Idbatterim

I agree that if they decreased vat and excise duty it will get more and more less wothwhile going up there... There is a point where its just not worth it.

gcgirl

lmimmfn wrote: »

i think this would be good, i mean blah blah health/society problems but compared to the fortune thats being lost on the black market and up north on both of these its better that we get the revenue. Id say i bought 1/3rd of my cigs in ireland this year and probably 60% of booze, if they decreased both it would really be more hassle to shop up north unless i was going up for a high expense item like a tv or something.

+1 there

gandalf

Tax to remain the same but the thresholds to be lowered to bring more into the net.

PRSI ceiling to be abolished.

VAT back to 21%

Ciggies up by a Euro or Two.

Drink Excise Duty to be dropped by around 20% to negate the main reason for the majority to go over the border.

Halve the Dole for the Under 25's living at home.

Graduate the dole downwards for the long term unemployed who have turned down jobs, work experience or further training.

Decrease child benefit.

Close all property loop holes.

Abolish Relief for Union Subscriptions

Increase Capital Gains Tax

Graduated Wage Cuts to the PS. up to 32K no cut, 32-50K 5%, 51-75k 7%, 76K-149k 10% & 150k + 15%

Tellox

I haven't bought any cigarettes in Ireland this year - and to be honest, unless the decrease is dramatic (€2+), I still won't be.

lmimmfn

gandalf wrote: »

Abolish Relief for Union Subscriptions

haha, that would be f***** brilliant, lol, seriously id really enjoy that.

wyndham

I also suspect there will be a drop in duty on cigarettes.

The annual appeals made by ASH and Irish Cancer Society for duty increases to combat underage smoking and discourage smoking in general are fatally flawed. As we all know, the higher the legitimate retail price, the greater the dividend from smuggling ergo a higher proliferation of smuggling, as we have seen. Aside from the loss of revenue to the state, these cigarettes are sold to whoever wants to purchase them, with no age controls, no quality controls, improper labelling, higher toxicity, etc,etc,etc.
Thus every increase in duty erodes government control of the market and actually increases the health problem.

We are at a pricing level where anti-smoking organisations need to adopt a new policy line. They should be arguing for a greater spend on education to discourage smoking at school age, for even greater controls on tobacco sales, health campaigns,etc. They should be arguing for harsher penalties for tobacco smuggling and illegal sale.

At this stage, every cigarette price increase is a gift to smugglers. Were the price of cigarettes to be pushed to €10 for 20 tomorrow, the only winner would be the black market.

There are other problems associated with this , such as the increased proliferation and develpment of criminal gangs, who may use monies derived from tobacco smuggling to fund more serious activities. The penalties associated with tobacco smuggling are lenient enough that it is a risk well worth taking.

A decrease in duty would be nothing new and has been done in other countries before that were faced with the same problem, such as Sweden.

gandalf

Whoops forgot to add that Water Meters will be announced formally as well along with the much hyped Carbon Tax to make it look like the Greens have actually done something....

K-9

gandalf wrote: »

Tax to remain the same but the thresholds to be lowered to bring more into the net.

PRSI ceiling to be abolished.

That would be my preference, though the levies will be added to the existing tax rates.

Abolishing the PRSI threshold is a 4% tax tax rise on the rich automatically.

gandalf

Well k-9 it makes sense to me to drop the levies and I never understood why the PRSI rate was capped like that in the first place.

I would be against more levies though, if they lower the thresholds enough they will get an awful lot more. Levies are dishonest in nature the government should just be straight with people and raise the tax levels if he has to get more.

thebman

gandalf wrote: »

Whoops forgot to add that Water Meters will be announced formally as well along with the much hyped Carbon Tax to make it look like the Greens have actually done something....

lol yeah, who would have though any party would want to be known for introducing a tax.

gandalf

thebman wrote: »

lol yeah, who would have though any party would want to be known for introducing a tax.

Well they had to get themselves into the record books some way before they went the way of the dinosaurs.

K-9

gandalf wrote: »

Well k-9 it makes sense to me to drop the levies and I never understood why the PRSI rate was capped like that in the first place.

I would be against more levies though, if they lower the thresholds enough they will get an awful lot more. Levies are dishonest in nature the government should just be straight with people and raise the tax levels if he has to get more.

The problem would be if they drop the levies, that is a tax reduction. In a time of an across the board PS pay cut? The PS will go absolutely mad!

I think they'll abolish the levies and incorporate them into the existing rates. Whether they'll go the whole hog and put a new 22% between 15 and 19k odd, I'm not sure. Maybe the UK 10% minimum rate on those wages?

Also if abolishing the PRSI ceiling is fair, adjusting downwards the PRSI free exemption should be on the cards. There's no PRSI on minimum wage in this country.

Never understood the PRSI cap either.

starbelgrade

Dunno about taxes, but by the end of tomorrow there will be at least a 50% increase in the number of people complaining.

frman

Reduce top VAT rate to 21%

Treat Child benefit as income for tax purposes

Lower the tax bands

Eliminate PRSI Ceiling

Reduce Public Sector pay by minimum 5%

Reduce social welfare 10%

Reduce minimum wage by 5%

Increase Property Tax on second homes

Introduction of Carbon tax on all fuels and Electricity

Formally close some quangos (rather than talk about it)

Increase capital gains tax

Increase DIRT

Reduce duties on Alcohol and Tobacco

Reduce Rent Allowance

Reduce Interest allowance on Investment Property Loans

Reduce Employers PRSI

Reduce tax allowance on Pension contributions

wyndham

Non PPR tax to increase from €200 to €350 pa.