Is different tax brackets a good idea?

Scanlas The 2nd

First of all in terms of fairness it simply isn't. Surely it would be fairer for everyone to pay the same percentage tax.

In terms of economics I see it as a huge disencentive to go out and do well for yourself which is good for the economy. Why put in all the effort to rise up the corporate ladder when your after tax income won't reflect the hard work and effort you put in to get there?

Of course the tax take may decrease which wouldn't be acceptable in our current situation.

What do you think on the matter?

Chuck Stone

Scanlas The 2nd wrote: »

First of all in terms of fairness it simply isn't. Surely it would be fairer for everyone to pay the same percentage tax

VAT - you're ignoring it.

AngryPensioner

No it punishes those who work hard for their money legally within the law. Everybody should pay equal tax.

smash

Scanlas The 2nd wrote: »

What do you think on the matter?

Dramatically reduce dole and issue food stamps which can not be used for alcohol or tobacco products!

Toby Take a Bow

Scanlas The 2nd wrote: »

First of all in terms of fairness it simply isn't. Surely it would be fairer for everyone to pay the same percentage tax.

In terms of economics I see it as a huge disencentive to go out and do well for yourself which is good for the economy. Why put in all the effort to rise up the corporate ladder when your after tax income won't reflect the hard work and effort you put in to get there?

Of course the tax take may decrease which wouldn't be acceptable in our current situation.

What do you think on the matter?

There's a similar thread elsewhere. But if your main aim is to rise up the corporate ladder, I don't think you can really compare being at the bottom and being at the middle/top. It would surely be of benefit to you to be earning 100,000+ rather than 28,000 regardless of what tax bracket you fall under.

Chuck Stone

smash wrote: »

Dramatically reduce dole and issue food stamps which can not be used for alcohol or tobacco products!

Stupid idea.

Vouchers would become currency.

You'd need a lot more public servants and laws and regulations to try to enforce it.

Think FFS.

Toby Take a Bow

smash wrote: »

Dramatically reduce dole and issue food stamps which can not be used for alcohol or tobacco products!

Good idea, especially in a recession when there are f*ck all jobs.

But what's that got to do with tax brackets anyway?

Benny_Cake

Scanlas The 2nd wrote: »

First of all in terms of fairness it simply isn't. Surely it would be fairer for everyone to pay the same percentage tax.

In terms of economics I see it as a huge disencentive to go out and do well for yourself which is good for the economy. Why put in all the effort to rise up the corporate ladder when your after tax income won't reflect the hard work and effort you put in to get there?

Of course the tax take may decrease which wouldn't be acceptable in our current situation.

What do you think on the matter?

You're arguing for a flat tax, which is what all taxes here are with the exception of income tax.

As for climbing the pay scale, you'll still be taking home more than you were before you got a payrise. So how is progressive taxation a disincentive to career advancement?

smash

Chuck Stone wrote: »

Stupid idea.

Vouchers would become currency.

Not if done properly.

Chuck Stone wrote: »

You'd need a lot more public servants and laws and regulations to try to enforce it.

Think FFS.

No you wouldn't. New PPS cards could be issued and voucher credits added every week. These cards could then be used like debit cards in shops. Easy to tell a till not to accept it if there's alcohol or tobacco being purchased.

Zascar

Have a look at these:

http://www.colly.tv/wp-content/uploads/income-distribution-ireland.png
http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax

54% of the population earn under 30k – In total they pay 3.1% of the tax.
16% of the population earn over 60k – They pay 74% of the tax.

Doesn't seem fair to me. We often hear people proclaiming "Tax the Rich" - I wonder if they understood the real statistics would they still think the same? Everyone should pay their fair share...

AngryPensioner

Benny_Cake wrote: »

So how is progressive taxation a disincentive to career advancement?

http://www.hoover.org/publications/policy-review/article/72291

Progressive Taxation is immoral.

reprazant

If it was a flat rate of tax for everybody, the rate would be at least 40% -50% , probably higher, or so.

So, the poor would lose the most really.

laugh

Chuck Stone wrote: »

Stupid idea.

Vouchers would become currency.

You'd need a lot more public servants and laws and regulations to try to enforce it.

Think FFS.

Vouchers would become currency? really?

If you had a job would you swap cash for vouchers?

Why not have the person's pps number on their voucher and require that it must match a presented card for the shopkeeper to accept it?

Why not have a picture on the card?

Benny_Cake

smash wrote: »

Chuck Stone wrote: »

Stupid idea.

Vouchers would become currency.

Not if done properly.

Chuck Stone wrote: »

You'd need a lot more public servants and laws and regulations to try to enforce it.

Think FFS.

No you wouldn't. New PPS cards could be issued and voucher credits added every week. These cards could then be used like debit cards in shops. Easy to tell a till not to accept it if there's alcohol or tobacco being purchased.

Is it really that important to prevent someone who lost their jobs from having a can or two at the weekend? Is the taxpayer to pay for the implementation of such a scheme - because it'll cost money to implement? More importantly, what is the purpose of it?

smash

Benny_Cake wrote: »

Is it really that important to prevent someone who lost their jobs from having a can or two at the weekend? Is the taxpayer to pay for the implementation of such a scheme - because it'll cost money to implement? More importantly, what is the purpose of it?

They'll still be ably to buy a can or 2 with their dole. And lets face it, I'm not talking about people who just lost their job, I'm talking about scroungers. More than 3 years on the dole? switched to stamps!

Scanlas The 2nd

Benny_Cake wrote: »

You're arguing for a flat tax, which is what all taxes here are with the exception of income tax.

As for climbing the pay scale, you'll still be taking home more than you were before you got a payrise. So how is progressive taxation a disincentive to career advancement?

because the increase in take home pay often isn't worth the extra responsibility when tax is taken out. So it acts as a huge disincentive put the effort in and add extra value to the economy.

AngryPensioner

reprazant wrote: »

If it was a flat rate of tax for everybody, the rate would be at least 40% or so.

So, the poor would lose the most really.

If we dropped that figure to 10% though, the market would flourish in a deregulated fashion. Poor people could then lift themselves out of poverty without resorting to paternalistic and very demeaning welfare policies.

Teach the poor to help themselves out of poverty. The Government wants them poor because of red tape and artificial barriers to success. There aren't really any homeless people in the Bahamas. Government welfare actually creates poverty.

Cool Mo D

Charging a higher rate on higher income is perfectly fair, because the marginal value of money declines as you earn more of it. Someone who earns €20,000 a year will value an extra €1,000 a lot higher than someone who earns €100,000.

The more you make, the less each additional euro means to you, therefore it makes sense to tax incomes over a certain amount at a higher rate, to make the "pain" of paying tax roughly equal for all.

reprazant

AngryPensioner wrote: »

If we dropped that figure to 10% though, the market would flourish in a deregulated fashion. Poor people could then lift themselves out of poverty without resorting to paternalistic and very demeaning welfare policies.

Teach the poor to help themselves out of poverty. The Government wants them poor because of red tape and artificial barriers to success. There aren't really any homeless people in the Bahamas. Government welfare actually creates poverty.

So where does the money to fill the massive hole is state coffers come from if the tax is reduced to 10%?

Or is the theory just lower the tax and then there will be loads of jobs?

Scanlas The 2nd

Cool Mo D wrote: »

Charging a higher rate on higher income is perfectly fair, because the marginal value of money declines as you earn more of it. Someone who earns €20,000 a year will value an extra €1,000 a lot higher than someone who earns €100,000.

The more you make, the less each additional euro means to you, therefore it makes sense to tax incomes over a certain amount at a higher rate, to make the "pain" of paying tax roughly equal for all.

What about the extra pain caused by a crap economy? Reward those who create jobs and/or take on greater responsibility in a company, these are the people who drive our economy.

AngryPensioner

reprazant wrote: »

So where does the money to fill the massive hole is state coffers come from if the tax is reduced to 10%?

Or is the theory just lower the tax and then there will be loads of jobs?

The coffers can feck off. Lower the tax rate and market the country as a tax haven. Remove practically all public services and transfer control to the private sector. We would be on our feet in no time. Look at Monaco for instance. Legalise prostitution, drugs and gambling too. Controversial. Perhaps. But it would work.

juan.kerr

reprazant wrote: »

If it was a flat rate of tax for everybody, the rate would be at least 40% -50% , probably higher, or so.

So, the poor would lose the most really.

Is that 'Lose the most' or contribute a more equitable amount? Depends on your perspective and your marginal tax rate I suspect.

Benny_Cake

smash wrote: »

They'll still be ably to buy a can or 2 with their dole. And lets face it, I'm not talking about people who just lost their job, I'm talking about scroungers. More than 3 years on the dole? switched to stamps!

But why do you care if they're buying alcohol and tobacco anyway? By the way, did you consider the loss in revenue to the exchequer caused by the decline in alcohol and tobacco sales?

smash

I think adding a new tax bracket for higher earners is suicide to be honest. There's less incentives to reach that income level and business owners and trained staff will leave the country.

Benny_Cake

AngryPensioner wrote: »

reprazant wrote: »

So where does the money to fill the massive hole is state coffers come from if the tax is reduced to 10%?

Or is the theory just lower the tax and then there will be loads of jobs?

The coffers can feck off. Lower the tax rate and market the country as a tax haven. Remove practically all public services and transfer control to the private sector. We would be on our feet in no time. Look at Monaco for instance. Legalise prostitution, drugs and gambling too. Controversial. Perhaps. But it would work.

Because a 2km territory with a population of 30000 is just like Ireland :rolleyes:

Temptamperu

smash wrote: »

They'll still be ably to buy a can or 2 with their dole. And lets face it, I'm not talking about people who just lost their job, I'm talking about scroungers. More than 3 years on the dole? switched to stamps!

some drug dealers in america take food stamps

smash

Temptamperu wrote: »

some drug dealers in america take food stamps

Dumb drug dealers then.

Mark200

Someone on minimum wage losing/"contributing" (hypothetically) 30% of their income is a lot different to someone on 60k+ giving away 30% of their income. Ideally we'd have no taxes, but certain services need to be paid for and I think it's only fair that those who can afford to give more do give more. Obviously with a flat tax rate, higher earners would give more anyway. But it's just unfeasible to ask a low earner to give the same portion of their income as a high earner.

Galtee

Zascar wrote: »

Have a look at these:

http://www.colly.tv/wp-content/uploads/income-distribution-ireland.png
http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax

54% of the population earn under 30k – In total they pay 3.1% of the tax.
16% of the population earn over 60k – They pay 74% of the tax.

Doesn't seem fair to me. We often hear people proclaiming "Tax the Rich" - I wonder if they understood the real statistics would they still think the same? Everyone should pay their fair share...

That ronanlyons link seems a little strange to and very weighted.

juan.kerr

Mark200 wrote: »

I think it's only fair that those who can afford to give more do give more.

I don't 'get' this point, naver have.

It may make sense in an ideal world but there are so many distortions and inequities in the the current system.

A system where claiming welfare (and the associated add ons - medical card, rent allowance etc) is more attractive than working has failed us (the taxpayer).

smash

Mark200 wrote: »

Someone on minimum wage losing/"contributing" (hypothetically) 30% of their income is a lot different to someone on 60k+ giving away 30% of their income. Ideally we'd have no taxes, but certain services need to be paid for and I think it's only fair that those who can afford to give more do give more.

Bullsh*t.

It's all relative, and someone on 60k (which lets face it isn't a massive wage) will have higher outgoings than someone on a low wage.

Galtee

smash wrote: »

I think adding a new tax bracket for higher earners is suicide to be honest. There's less incentives to reach that income level and business owners and trained staff will leave the country.

But there are already two tax brackets. Why not remove the top one and have everyone taxed at the 20% across the board?

juan.kerr

smash wrote: »

Bullsh*t.

It's all relative, and someone on 60k (which lets face it isn't a massive wage) will have higher outgoings than someone on a low wage.

They probably don't get a medical card, rent allowance, bin charge waivers etc.

Benny_Cake

smash wrote: »

Mark200 wrote: »

Someone on minimum wage losing/"contributing" (hypothetically) 30% of their income is a lot different to someone on 60k+ giving away 30% of their income. Ideally we'd have no taxes, but certain services need to be paid for and I think it's only fair that those who can afford to give more do give more.

Bullsh*t.

It's all relative, and someone on 60k (which lets face it isn't a massive wage) will have higher outgoings than someone on a low wage.

Once you've paid for food, shelter, clothing and essentials, other outgoings are essentially optional. A person on 60k is still going have a lot more of their income left over than someone on 20k.

juan.kerr

Benny_Cake wrote: »

Once you've paid for food, shelter, clothing and essentials, other outgoings are essentially optional. A person on 60k is still going have a lot more of their income left over than someone on 20k.

So maybe we should ban those in receipt of any form of social welfare payment from smoking and drinking as a first step. Then we can worry about the tax rates.

Cool Mo D

Scanlas The 2nd wrote: »

What about the extra pain caused by a crap economy? Reward those who create jobs and/or take on greater responsibility in a company, these are the people who drive our economy.

What about it? There is no reason for a flat tax to create more jobs, and if it were to be revenue neutral, it would likely depress an economy in recession, as poor people, who spend nearly all their income, have to pay higher tax rates, and wealthy people who get a tax cut in a recession will probably save the money, reducing the amount of customers available to anyone trying to start a business, and create some jobs.

smash

Benny_Cake wrote: »

Once you've paid for food, shelter, clothing and essentials, other outgoings are essentially optional. A person on 60k is still going have a lot more of their income left over than someone on 20k.

Not true, because a person on 60k is probably paying a large mortgage and not getting a hand from the government.

Benny_Cake

juan.kerr wrote: »

Benny_Cake wrote: »

Once you've paid for food, shelter, clothing and essentials, other outgoings are essentially optional. A person on 60k is still going have a lot more of their income left over than someone on 20k.

So maybe we should ban those in receipt of any form of social welfare payment from smoking and drinking as a first step. Then we can worry about the tax rates.

But why do you care? Maybe we should insist they buy margarine instead of butter... there seems to be an odd combination of hard-right economics combined with a nanny state being advocated here.

Benny_Cake

smash wrote: »

Benny_Cake wrote: »

Once you've paid for food, shelter, clothing and essentials, other outgoings are essentially optional. A person on 60k is still going have a lot more of their income left over than someone on 20k.

Not true, because a person on 60k is probably paying a large mortgage and not getting a hand from the government.

If they're paying a large mortgage that's their choice, no one forced them to take one out. Following this logic, senior and middle management types should be applying for jobs in filling stations.

smash

Benny_Cake wrote: »

But why do you care? Maybe we should insist they buy margarine instead of butter... there seems to be an odd combination of hard-right economics combined with a nanny state being advocated here.

Well if you think that anything other than "food, shelter, clothing" aren't essentials, then why should the tax payer fund a luxury for people on the dole? Especially considering you want to tax the luxuries of the "rich" even further.

Benny_Cake wrote: »

If they're paying a large mortgage that's their choice, no one forced them to take one out.

But they can afford it... that is until you tax the fúck out of them!

Benny_Cake wrote: »

Following this logic, senior and middle management types should be applying for jobs in filling stations.

How so?

Ouchette

It'd have to be a really low rate to allow the lowest paid to pay it and still be able to pay for food and shelter. That rate isn't high enough to pay for things like schools and hospitals unless you've got a magic money tree to make up the difference. Simple.

Scanlas The 2nd

Cool Mo D wrote: »

What about it? There is no reason for a flat tax to create more jobs, and if it were to be revenue neutral, it would likely depress an economy in recession, as poor people, who spend nearly all their income, have to pay higher tax rates, and wealthy people who get a tax cut in a recession will probably save the money, reducing the amount of customers available to anyone trying to start a business, and create some jobs.

There is because we will encourage more entrepeneurs and encourage more effort from employees which will add to the output of the economy making everyone's economic standard of living better. We'd need to look at some hard figures before we can come to conclusions of what would and wouldn't happen as there are too many interrelated varialbles.

Liam Byrne

smash wrote: »

Benny_Cake wrote: »

Once you've paid for food, shelter, clothing and essentials, other outgoings are essentially optional. A person on 60k is still going have a lot more of their income left over than someone on 20k.

Not true, because a person on 60k is probably paying a large mortgage and not getting a hand from the government.

They don't need a large mortgage.

Anything up to 15 or 20K is required to get by (and will be spent, therefore feeding the economy and paying 23% VAT on that amount) whereas anything above that is optional spending and may never end up in the economy.

juan.kerr

Benny_Cake wrote: »

But why do you care? Maybe we should insist they buy margarine instead of butter... there seems to be an odd combination of hard-right economics combined with a nanny state being advocated here.

Well now, once we start using lifestyle choices (i.e. optional outgoings as per previous post) as a justification for taxing the middle income earners, then we should apply the same principal to all sectors of society.

As for why do I care, why would I willingly want to pay more tax while the welfare system is left untouched?

We have a massive deficit. More taxes is not the solution - we need to cut costs and EVERYONE needs to contribute to that. Unfortunately the CPA has unfairly ring fenced one section of society from those cost cuts, so the rest of society needs to make up the difference.

smash

Liam Byrne wrote: »

They don't need a large mortgage.

They already have them.

Liam Byrne wrote: »

Anything up to 15 or 20K is required to get by (and will be spent, therefore feeding the economy and paying 23% VAT on that amount) whereas anything above that is optional spending and may never end up in the economy.

Talk about a communist view. I don't want to work my ass off to pay for sh*t for other people and fund the poor. I want to do it so I have enough money to live comfortably myself. Your attitude is that I shouldn't have that even though I'm working for it.

Benny_Cake

smash wrote: »

Benny_Cake wrote: »

But why do you care? Maybe we should insist they buy margarine instead of butter... there seems to be an odd combination of hard-right economics combined with a nanny state being advocated here.

Well if you think that anything other than "food, shelter, clothing" are essentials, then why should the tax payer fund a luxury for people on the dole? Especially considering you want to tax the luxuries of the "rich" even further.

I'm not arguing for an increase in the top rated of tax. What you are suggesting in relation to the unemployed buying tobacco and alcohol makes no sense, would cost a considerable amount to implement and would deprive the exchequer of taxation revenue in the long term. Not to mention the logistics of connecting every retailer in the country to the Social Welfare database.

juan.kerr

Liam Byrne wrote: »

They don't need a large mortgage.

The same argument could be used to justify removing rent allowance and providing these people with centralised accommodation similar to the accommodation centres used for asylum applicants.

Do they really need to be in private accommodation?

Galtee

There should indeed be a higher rate of tax for the higher earners. It's already in place, 20% and 41% so why stop there. The whole reason for the 41% tax rate is because the lower rate wouldn't be enough to cover the tax that's needed to be taken by exchequer, whilst still allowing lower paid workers to work and have something to show for it. We are now in a situation where the 41% isn't enough to cover the tax that's needed so why not bring in another rate the same as was done with the current higher tax rate?

juan.kerr

smash wrote: »

They already have them.

Talk about a communist view. I don't want to work my ass off to pay for sh*t for other people and fund the poor. I want to do it so I have enough money to live comfortably myself. Your attitude is that I shouldn't have that even though I'm working for it.

It's a generally the 'have nots' who have little to lose that advocate socialism/communism. (No offence Liam Byrne).

Benny_Cake

smash wrote: »

Talk about a communist view. I don't want to work my ass off to pay for sh*t for other people and fund the poor. I want to do it so I have enough money to live comfortably myself. Your attitude is that I shouldn't have that even though I'm working for it.

What you are advocating is libertarianism. I don't agree with that, in fact I think it's borderline immoral, but it's a political position. So why aren't you advocating the abolition of social welfare altogether instead of dreaming up schemes to stop welfare recipients from buying certain things?

juan.kerr

My opinion:

There's a status quo with regard to the tax rates & bands and it's funding of the social welfare system.

As a middle income earner I accept paying a considerable amount of tax in return for nothing.

I object to suggestions that I should pay considerably more tax, but accept that we must all play our part.

I strenuously object to suggestions that I should pay considerably more tax so that existing rates of social welfare and all the associated trimmings remain untouched.