Bike2Work Scheme and Budget 2010

ROK ON

Lumen wrote: »

Are you suggesting that people are migrating away from the flat taxes? That's a completely absurd suggestion. You haven't even proven correlation let along causation. Flat taxes are simpler to administer/enforce (see Laffer Curve) and promote enterprise. That's why they are popular in dynamic economies.



A tax allowance is a tax break, so I assume you're in favour of making those on minimum wage pay income tax and levy on all earnings?

Labour supply versus taxation choices was a particular are of specialisation for me (it was the topic of my MA thesis). It is obvious why people are leaving Ireland, so there is no need for sacasm I feel.
In general I believe that everyone in a state of adult age should pay some form of taxation. I like the everybody pays. As an example, I am in general against the idea of 'free' anything due to the wastage and inefficiences involved. On a very simple level, I ihave seen evidence under the free rug scheme for certain age cohorts, where upon the death of that inividual a local pharmacist was brought back boxes of unused medicines by the relative of the deceased. A relative is a pharmacist. In general free stuff encourages even more wasteful behaviour then is present naturally in this bloated state.

Now I am not suggesting that a person on min wage should pay the same proportion of as a well paid person. However the philosophy of everyone pays is responsible in my view.

I think there is need for the income tax codes to be one simplified. More people should be brought into the tax net, but at the same time the bands should be widened to prevent tax wedge and poverty tap effects.

This coulntry faces a very simple choice and a very fixable problem. It simply requires the will (by representatives and citizen) to fix the problem. However it is not in anyway intractable (only people are).

Having studied flat tax systems, I am not sure as to the incentives provided by them - the difficult comes not in the tax, but what is the threshold (basic income) that must be passed before the tax is paid. However, it is a beautiful tax system in its simplicity.

The reality is that tax is only one reasona a person may or may not stay in an economy. For example, all of the UK Banks are making noises about moving offshore should the UK Treasury begin taxation of bank liabillities. However, despite the threats I simply do not believe that Barclays or HSBC will relocate their HQ from London. Another point, the very well rewarded hedge fund sector could easily relocate to say Malta, Switzerland, Estonia, Dublin or elsewhere for lowere levels of various taxes. However the vast majority of hedge fund managers work from and are domiciled in London. This is despite the monetary attractiveness of a different location. Its not all about taxtaion.

dayshah

Lumen wrote: »

Are you suggesting that people are migrating away from the flat taxes? That's a completely absurd suggestion. You haven't even proven correlation let along causation. Flat taxes are simpler to administer/enforce (see Laffer Curve) and promote enterprise. That's why they are popular in dynamic economies.

No, but Diarmuid seems to think people are migrating away from progressive tax. How many Irish people have migrated to Latvia? People certainly aren't migrating away from countries with progressive taxation. Also you have an interesting definition of dynamic. Its really only Eastern Europe (and only a handful of other countries) that use flat taxes. Personally I think the US, Australia, Western Europe are better off and more dynamic. Flat tax countries were the first to go to the IMF in 2008. In Estonia they are discussing moving away from flat taxes.

There is no evidence that progressive taxation leads to emigration or poor economic growth.

Lumen wrote: »

A tax allowance is a tax break, so I assume you're in favour of making those on minimum wage pay income tax and levy on all earnings?

Tax breaks and personal tax allowances are not the same.

Beasty

dayshah wrote: »

Tax breaks and personal tax allowances are not the same.

We've gone well off topic here, but yes they are, and I really don't see any debate. As I stated above, tax credits, zero VAT rating on food and kids clothes are all tax breaks

ROK ON

dayshah wrote: »

No, but Diarmuid seems to think people are migrating away from progressive tax. How many Irish people have migrated to Latvia? People certainly aren't migrating away from countries with progressive taxation. Also you have an interesting definition of dynamic. Its really only Eastern Europe (and only a handful of other countries) that use flat taxes. Personally I think the US, Australia, Western Europe are better off and more dynamic. Flat tax countries were the first to go to the IMF in 2008. In Estonia they are discussing moving away from flat taxes.

There is no evidence that progressive taxation leads to emigration or poor economic growth.



Tax breaks and personal tax allowances are not the same.

There is no link between the flat tax system and the access of IMF drawdown facilities. IIRC, the reason that these countries have flat tax systems, is that the tax system is a new one and does not have the long history that tax has in say the West. After communism they had to come up with a system - they eventually came upon the basic income/flat tax mechanism.

(Laffer btw, despite the famous work of his, is a highly controversial character with some truly bizzare opinions).

dayshah

ROK ON wrote: »

Now I am not suggesting that a person on min wage should pay the same proportion of as a well paid person. However the philosophy of everyone pays is responsible in my view.

Just 4 points (this is gone way off topic).

Economically lump sum taxes are considered non-distortionary. This does not apply to flat taxes, something people miss out on.

A similar amount of income is taken in on VAT as income tax, so even those on the minimum wage pay something.

I think the idea of the minimum wage should be the lowest level of lifestyle that we think is right for a working person. Actually only a small proportion of workers are on the €8.65/hr. You get more (or at least legally should) get more if you are in retail, catering, etc. etc. So I would set the basic allowance at the minimum wage level (39*8.65 a week), and then start from there.

On the other hand though if low wage people paid something small, even just €5 a week they might take a greater interest in elections as they would feel its their money being wasted. VAT isn't as visible and most people ignore it, even if most people pay more VAT than income tax.

dayshah

Beasty wrote: »

We've gone well off topic here, but yes they are, and I really don't see any debate. As I stated above, tax credits, zero VAT rating on food and kids clothes are all tax breaks

Maybe my terminology is wrong.
But there is a clear difference between personal tax allowance that people get for being a person and tax incentives that are due to economic behaviour like investing in horses or buying a bike.

Beasty

We seem to agree this has gone off topic, and I'm as guilty as others in this thread. Can we now get back to the topic in hand, and not try and put the Irish tax system right (try the Irish Economy forum for debates on this topic)

Thanks

Beasty

dayshah

ROK ON wrote: »

There is no link between the flat tax system and the access of IMF drawdown facilities. IIRC, the reason that these countries have flat tax systems, is that the tax system is a new one and does not have the long history that tax has in say the West. After communism they had to come up with a system - they eventually came upon the basic income/flat tax mechanism.

(Laffer btw, despite the famous work of his, is a highly controversial character with some truly bizzare opinions).

I agree there is no link.

Many of these countries have gone through their first capitalist recession (I consider the 1990s a transition recession), so its an evolutionary shock for their tax systems. Many are now considering a progressive tax as they simply can't fund their state through a flat tax.

dayshah

Beasty wrote: »

We seem to agree this has gone off topic, and I'm as guilty as others in this thread. Can we now get back to the topic in hand, and not try and put the Irish tax system right (try the Irish Economy forum for debates on this topic)

Thanks

Beasty

OK, from now on if I say flat tax I mean a tax on flat tyres

I made my last post before seeing this message

dgh

Would be good if abolished, as it would force Irish bike shops to be competitive and get off the bike to work gravy train.

Just like all tax breaks, it causes inflated prices

g0g

This forum I assume is mainly full of cyclists. Having only "re-become" a cyclist earlier this year due to the CTW scheme I think it's a great idea and should stay! I could have afforded the bike either way, but I think a scheme like this is great for both (a) getting commuters out of cars and (b) getting people out there doing a healthy sport! I probably wouldn't have bothered my bum but for the great deal! I realise the main purpose is for commuting, but I'm sure it must have done wonders for the sport in this country!

at1withmyself

g0g wrote: »

This forum I assume is mainly full of cyclists. Having only "re-become" a cyclist earlier this year due to the CTW scheme I think it's a great idea and should stay! I could have afforded the bike either way, but I think a scheme like this is great for both (a) getting commuters out of cars and (b) getting people out there doing a healthy sport! I probably wouldn't have bothered my bum but for the great deal! I realise the main purpose is for commuting, but I'm sure it must have done wonders for the sport in this country!

A lot of people where I work are the same and wouldn't have started cycling wiithout the scheme so its a good thing IMO as there are a few less cars on the already over populated roads.

The comment above is very reflective on my local bike shops and anyone who has asked for my help when choosing a suitable bike on the scheme has ended up getting a bike either outside of the country or county as the competitive edge has gone from the local shops due to the scheme. When I got mine I was quoted 100 euro above the RRP in a local shop so had to go elsewhere :mad:

kona

No wonder this country is ****ed.
Daysah are you in the public sector? because im sick of subsidising that waste of space. Sick of my taxes subsidising methadone for junkies, sick of its subsidising people abusing social welfare, sick of subsidising the pensions on ministers, teachers, consultant and any other bunch of greedy inefficient bastards bleeding the country dry.
Your not subsidising anything at all, your colleague in work, isnt getting free money for **** sake, hes buying a bike that he is going to use out of money he has earned.
The cycle2work scheme is costing the government **** all, in fact id say its possibly making money from it, the knock of effect is that bike shops employ more staff, who in turn pay tax, the bikes provide VAT , then the servicing on said bikes provides VAT along with the other bits and pieces. The government has gotten people to spend money on something they may not have. Country is in a recession and people spending money is good.

dayshah

kona wrote: »

No wonder this country is ****ed.
Daysah are you in the public sector? because im sick of subsidising that waste of space. Sick of my taxes subsidising methadone for junkies, sick of its subsidising people abusing social welfare, sick of subsidising the pensions on ministers, teachers, consultant and any other bunch of greedy inefficient bastards bleeding the country dry.
Your not subsidising anything at all, your colleague in work, isnt getting free money for **** sake, hes buying a bike that he is going to use out of money he has earned.
The cycle2work scheme is costing the government **** all, in fact id say its possibly making money from it, the knock of effect is that bike shops employ more staff, who in turn pay tax, the bikes provide VAT , then the servicing on said bikes provides VAT along with the other bits and pieces. The government has gotten people to spend money on something they may not have. Country is in a recession and people spending money is good.

No, I work in the private sector. I am subsidising my friends hobby because despite similar incomes, I am paying more tax.

Its quite simple. Because my friends hobby is to cycle on a new bike he pays less tax than me. Why should I pay more tax than someone who's hobby is to go cycling on the weekend on a new bike?

You said the scheme is keeping you in a job. Why should I give you a hand out? Handouts for you, but not for anyone else. I admire your convictions :rolleyes:

I outlined earlier why such a scheme can not make money for the government. Its an economic and mathematical impossibility. Its good for people to spend money in a recession, just not on Chinese, French, German and Italian imports.

dited

While I am a supporter of the CTW scheme, there remains an inherent inequity in the manner in which it is left to the vagaries of individual employers to decide whether or not a PAYE worker can avail of the scheme or not. Surely there must be some method of enabling those workers whose employers refuse to implement the scheme, to apply directly to the Revenue for a tax refund on any money spent on a bike etc, subject to similar criteria that are present inthe CTW scheme - €1000 limit etc. This could be managed in a similar fashion to the way in which it's possible to claim tax relief on medical expenses incurred.

dayshah

dited wrote: »

While I am a supporter of the CTW scheme, there remains an inherent inequity in the manner in which it is left to the vagaries of individual employers to decide whether or not a PAYE worker can avail of the scheme or not. Surely there must be some method of enabling those workers whose employers refuse to implement the scheme, to apply directly to the Revenue for a tax refund on any money spent on a bike etc, subject to similar criteria that are present inthe CTW scheme - €1000 limit etc. This could be managed in a similar fashion to the way in which it's possible to claim tax relief on medical expenses incurred.

Or maybe even send in your receipt at the end of year and get a tax credit. That would be an improvement on the current system.

Twin-go

Well I ordered my bike on Saturday. Specialized Allez.