Tax the rich

KyussBishop

Monty Burnz wrote: »

AAAAGHGHGHGH.

Unbelievable. I'll try to make this simple: please flag at which number your understanding of my point breaks down.

1. Many companies rely on highly skilled, mobile workers (Google was the example)
2. Highly skilled mobile workers go where the pay is good (they are mobile)
3. Highly skilled mobile workers will be hit by higher taxes
4. This makes their pay less good (take home pay goes down)
5. They may leave and/or become harder to recruit as pay is less good
6. Companies will have to pay extra to recruit these highly skilled mobile workers (to restore after-tax pay levels)
7. This means companies' cost bases go up
8. If their cost base goes up, they may decamp to more business friendly economies

Ok? Now at what point does this thesis break down?

Seriously, this isn't even proper economics, this is basic common sense.

Maximizing condescension doesn't make your argument less flawed, particularly when you're deliberately ignoring half of my post: What multinational has more to lose from slightly increased spending on high-earners, than the hit they take losing low corporation tax?

Welease wrote: »

I'm not going to divulge personal information, but that statement is not true as I have previously received considerable payments as part of schemes to cover personal income shortfalls by relocating to Ireland.
Corporations do take into account the effect of taxation/pension & other benefits for their staff, and in many cases will have to spend extra in order to attract staff to those locations.

The bulk of the corporations being mentioned here won't leave Ireland directly.. but as they are already based in multiple locations around the world, they simply don't expand operations in Ireland further because of the extra costs involved.

It's also worth noting, that many staff can and will be located close to where the senior management reside.. If you force those senior staff elsewhere, then there is a good chance that within 5 years the bulk of those staff will also have been moved to the new location (again something I have seen happen again and again in corporations).

Okey fair point, though it is a stretch to say that entire companies will disappear due to it, as it doesn't make financial sense to do this in a productive market (though yes, it may slow expansion).

It seems unusual, that in the time (and expense) it would take them to move operations out of Ireland, workers that relocate would not just get replaced.


Also a wider point here (not directed at you, but a general point): Any assumption that business would suddenly run out of a supply of workers for the job positions, needs to be backed by proof as well.
There would need to be a very large exodus of high earning workers for a business to get to the point where it is looking at shutting down or permanently moving.

Particularly with the current level of unemployment, it seems unlikely that replacements could not be found.

Good loser

Welease wrote: »

I'm not going to divulge personal information, but that statement is not true as I have previously received considerable payments as part of schemes to cover personal income shortfalls by relocating to Ireland.
Corporations do take into account the effect of taxation/pension & other benefits for their staff, and in many cases will have to spend extra in order to attract staff to those locations.

The bulk of the corporations being mentioned here won't leave Ireland directly.. but as they are already based in multiple locations around the world, they simply don't expand operations in Ireland further because of the extra costs involved.

It's also worth noting, that many staff can and will be located close to where the senior management reside.. If you force those senior staff elsewhere, then there is a good chance that within 5 years the bulk of those staff will also have been moved to the new location (again something I have seen happen again and again in corporations).

Impressive stuff - practical and convincing.

Contrast the theoretician.

Monty Burnz

KyussBishop wrote: »

Maximizing condescension doesn't make your argument less flawed, particularly when you're deliberately ignoring half of my post: What multinational has more to lose from slightly increased spending on high-earners, than the hit they take losing low corporation tax?

There is no flaw in the argument - otherwise you would presumably have pointed it out. How many companies would be hit by this is hard to judge - if I had to guess, I would suggest service companies, particularly those that rely on intellectual property and R&D and have low levels of capital investment would be the most severely effected.

The obvious flaw in your logic is that you seem to be labouring under the misapprehension that Ireland is the only low-corporation tax economy. It isn't. The point has been made repeatedly that even high-tax France has a lower effective rate of corporation tax than we do. And corporation tax is only of many factors that determine an organisation's bottom line.

Monty Burnz

hognef wrote: »

Who are 'us' in the quoted sentence? The Irish? Can the Irish work in other countries more easily than other nationalities? Which nationalities are you comparing with?

We can work in our first language in the USA (the largest economy in the world), the UK (seventh largest), Canada, Australia, New Zealand, India and several others. Compared with - say - the Danes who can work in...well, Icelandic, Swedish and Norwegian are similar. If you combined all their economies, you are approaching the size of the Australian economy. Or compare with the French...who can work in some parts of Africa in their first language. Germans...can work in Austria or parts of Switzerland.

Can you cite another nationality who can move so easily to so many other countries with such a large aggregate market and have realistic prospects of well-paid work in their first language?

KyussBishop

Monty Burnz wrote: »

There is no flaw in the argument - otherwise you would presumably have pointed it out. How many companies would be hit by this is hard to judge - if I had to guess, I would suggest service companies, particularly those that rely on intellectual property and R&D and have low levels of capital investment would be the most severely effected.

The obvious flaw in your logic is that you seem to be labouring under the misapprehension that Ireland is the only low-corporation tax economy. It isn't. The point has been made repeatedly that even high-tax France has a lower effective rate of corporation tax than we do. And corporation tax is only of many factors that determine an organisation's bottom line.

Yes I did point it out, the fact that any losses incurred can't hope to make up for the loss of corporation tax (maybe not even recovering the cost of moving the business for many years).

The specific benefits that French corporations need to make use of in order to have a lower effective corporate tax than Ireland, also heavily constrain the variety of business that is likely to consider leaving the country.


In general, the argument that increasing taxes on high earners, will make enough people (or corporations) leave to make the tax counterproductive, is severely lacking.
There's legitimate evidence and arguments of some negative effect, but far from enough to show the tax is not worth it..

KyussBishop

Also another point: VISA's are another obvious limitation for non-EU countries, so the range of options are largely limited to the EU.

hognef

Monty Burnz wrote: »

We can work in our first language in the USA (the largest economy in the world), the UK (seventh largest), Canada, Australia, New Zealand, India and several others. Compared with - say - the Danes who can work in...well, Icelandic, Swedish and Norwegian are similar. If you combined all their economies, you are approaching the size of the Australian economy. Or compare with the French...who can work in some parts of Africa in their first language. Germans...can work in Austria or parts of Switzerland.

Can you cite another nationality who can move so easily to so many other countries with such a large aggregate market and have realistic prospects of well-paid work in their first language?

Well, to answer your question first: I agree that there aren't many nationalities that would fit into that category, but I don't agree that working in one's first language is the be all, end all that you make it out to be. Let me explain:

As you have correctly stated, a Dane would be able to use his first language in Norway and Sweden (not in Iceland, though, as Icelandic is too different).

What you have failed to account for is that, unlike Ireland, Denmark has a significant focus on teaching foreign languages, therefore most Danes (and other Nordic nationalities) would be reasonably competent in at least two foreign languages, the first being English. The second would normally be German (or to a lesser degree, French).

The Dane would hence be perfectly capable of working in any of the aforementioned English-speaking countries. In addition, he/she wouldn't need a lot of extra training in order to work through German (therefore Germany, Austria, Switzerland, etc. are actually within easier reach than you might imagine).

Bottom line, for the Dane, is that he/she would actually have a larger selection of countries to work in than the Irish person.

The same applies to a significant number of nationalities that don't have English as their first language, but that do have it as their second (or third), precisely because so many of the world's larger economies speak English.

In conclusion, I would in fact argue that the Irish (and other English-speaking nationalities) are actually at a disadvantage compared to many other nationalities (particularly European ones), because they are generally limited to English-speaking countries (I can't think of many countries in which Irish would be useful). This is presumably a significant reason why Irish emigrants tend to move halfway across the world to find work in the US or Australia, rather than to the stronger, more stable, and much nearer Norwegian and German economies.

Farmer Pudsey

KyussBishop wrote: »

In general, the argument that increasing taxes on high earners, will make enough people (or corporations) leave to make the tax counterproductive, is severely lacking.
There's legitimate evidence and arguments of some negative effect, but far from enough to show the tax is not worth it..

History rell us different, we only have to look at Dell, it moved it production base out of Ireland because it could not compete with the construction industry for low skilled workers. Multinationals do not need a big labour force to avail of low coporation tax. As well alot of other countries are putting low coporation tax in place to attract them in.

The last time we had a recession we tried the high tax route it failed and then labour was way less mobile and you could not travel from Ireland to the UK and back for 100 euro's/week. High taxes also encourage the black economy and they also give a huge incentive to buisness's to fiddle VAT and Income Tax.

In countries that have high taxes ( the nordic countries) they have huge back up in medical, education , childcare etc. They can afford these because they are not overpaying there public servants also there citizen's tend to be honest. Paddy is different he has different moral fibre basicly history tells us he will avoid tax and use any and every method to keep as much income as he can.

KyussBishop

Farmer Pudsey wrote: »

History rell us different, we only have to look at Dell, it moved it production base out of Ireland because it could not compete with the construction industry for low skilled workers. Multinationals do not need a big labour force to avail of low coporation tax. As well alot of other countries are putting low coporation tax in place to attract them in.

The last time we had a recession we tried the high tax route it failed and then labour was way less mobile and you could not travel from Ireland to the UK and back for 100 euro's/week. High taxes also encourage the black economy and they also give a huge incentive to buisness's to fiddle VAT and Income Tax.

In countries that have high taxes ( the nordic countries) they have huge back up in medical, education , childcare etc. They can afford these because they are not overpaying there public servants also there citizen's tend to be honest. Paddy is different he has different moral fibre basicly history tells us he will avoid tax and use any and every method to keep as much income as he can.

Dell is one company and they employed low skill earners though, not the high-income earners subject to discussion?

Most of your arguments there don't apply well to the high-income tax discussion.

Fair point though that multinationals do not need much activity here to avail of corporation tax; however though, it seems as if it would take a big shift in profitability and/or worker availability to push them out of Ireland, if it is still a productive market.

Diarmuid

KyussBishop wrote: »

If you disagree with me, you have to show the loss caused by such a tax, will be greater than the gain.

You claimed

it doesn't matter if high earners disappear, if someone else takes their job and thus income (which is still taxed at the higher rate).

I disproved that assertion by example.

Now you change the goalposts. How about you prove your theory instead?

Diarmuid

And can someone who is proposing a tax on the "rich" please define rich? Income, assets or both and how much of each?

Welease

KyussBishop wrote: »

Maximizing condescension doesn't make your argument less flawed, particularly when you're deliberately ignoring half of my post: What multinational has more to lose from slightly increased spending on high-earners, than the hit they take losing low corporation tax?


Okey fair point, though it is a stretch to say that entire companies will disappear due to it, as it doesn't make financial sense to do this in a productive market (though yes, it may slow expansion).

It seems unusual, that in the time (and expense) it would take them to move operations out of Ireland, workers that relocate would not just get replaced..

It's not specifically that companies would make a decision to instantly relocate from Ireland due to a taxation issues (unless of course we moved Corp. tax to 100% or something daft), it sets an series of connected events together which might cause a business to expand or contract, and what starts as a simple contraction due to one division expanding elsewhere can continue with other divisions/departments following suit. As a simple example, if Factory operations at a company decided to relocate elsewhere, then many of the supporting functions IT, HR, Finance, Canteen staff, Cleaners, Security etc etc will eventually relocate or reduce to the locally required amount. It will be a small amount of people (high earners) who will decide where to locate a factory, and depending on the taxation plans in place you can end up forcing them to be more inclinded to look elsewhere..

On the language front (which someone else) mentioned, I find it less and less a major point when expansions or contractions occur, as most multinationals (or at least ones Euro/US) will work in English, and finding English speaking (secondary language.. but perfect English) is not difficult.. To use Intel as an example again, off the top of my head they have European offices (several in some countries) in Ireland, UK, Italy, Germany, Poland, Russia, Finland, Denmark, Sweden, Egypt, Turkey,
Netherlands, Greece, Spain, Portugal etc etc.. of various sizes.. Many functions have been moved around those countries previously with ease, and will continue to do so as requirements dictate.

KyussBishop wrote: »

Also a wider point here (not directed at you, but a general point): Any assumption that business would suddenly run out of a supply of workers for the job positions, needs to be backed by proof as well.
There would need to be a very large exodus of high earning workers for a business to get to the point where it is looking at shutting down or permanently moving.

Particularly with the current level of unemployment, it seems unlikely that replacements could not be found.

But thats not the point (I know it wasn't directed at me, but.. ) it's those high earners that make the decisions on where functions will be located (and obviously where the jobs will be required), and many of them will make those decisions based on their comfort zone (which is why when new managers take over you often see a large shift in direction and scope etc.).. If you implement a tax regime that they feel (irrespective of whether they are right or wrong) is unfair on them they will potentially decide to locate themselves and those functions elsewhere over time. Simply put, the replacements will not be needed as the jobs wont be located here anymore.. The same outcome as (but for different cost reasons) why we saw many companies pick up their business and relocate to Poland etc over the first few years of the bust here.. There was plenty of trained workforce available here, but those senior staff decided that the financial benefits of moving elsewhere were worth it.

Thats not to say they we shouldn't have higher tax rates.. We should look into every option.. I'm just pointing out that no decision made will ever have no potential negative ramifications.. If you push too much in any direction you will see a reaction, and that potential reaction needs to be understood and comprehended as part of the decision.

Monty Burnz

KyussBishop wrote: »

Also a wider point here (not directed at you, but a general point): Any assumption that business would suddenly run out of a supply of workers for the job positions, needs to be backed by proof as well.

I love your notion that 'workers' are completely homogeneous and can be swapped in and out of an organisation like machine parts. Does it not occur to you that the best people (for those jobs) are currently in situ, and if you chase out the best people with higher taxes, you are replacing them with the second-raters? Do you think companies are more likely to succeed with excellent staff or merely good staff? Which has the competitive advantage? Are companies more or less likely to hang around/establish themselves in areas where they can't hire the best people?

As I've said, this stuff isn't even economics - it is common sense.

KyussBishop

Diarmuid wrote: »

You claimed

I disproved that assertion by example.

Now you change the goalposts. How about you prove your theory instead?

You did not disprove that, you proved it is not true in all cases (where I did not assert it was); you have not shown the losses incurred by people similar to your example, are greater than the benefit.

Welease wrote:

It's not specifically that companies would make a decision to instantly relocate from Ireland due to a taxation issues (unless of course we moved Corp. tax to 100% or something daft), it sets an series of connected events together which might cause a business to expand or contract, and what starts as a simple contraction due to one division expanding elsewhere can continue with other divisions/departments following suit. As a simple example, if Factory operations at a company decided to relocate elsewhere, then many of the supporting functions IT, HR, Finance, Canteen staff, Cleaners, Security etc etc will eventually relocate or reduce to the locally required amount. It will be a small amount of people (high earners) who will decide where to locate a factory, and depending on the taxation plans in place you can end up forcing them to be more inclinded to look elsewhere..

I understand your argument, but it's still the case that for most business, they would be deciding to take a big hit on corporation tax; and if managerial/executive losses are the motivation for this, they could simply up managerial/executive salary instead.

Whatever way you look at it, the loss from increased high-earner taxes looks extremely unlikely to trump corporate tax; not unless the business is slim on profit margins to begin with (or is in a specialist industry that can take advantage of specific corporate tax breaks elsewhere).

Welease wrote:

On the language front (which someone else) mentioned, I find it less and less a major point when expansions or contractions occur, as most multinationals (or at least ones Euro/US) will work in English, and finding English speaking (secondary language.. but perfect English) is not difficult.. To use Intel as an example again, off the top of my head they have European offices (several in some countries) in Ireland, UK, Italy, Germany, Poland, Russia, Finland, Denmark, Sweden, Egypt, Turkey,
Netherlands, Greece, Spain, Portugal etc etc.. of various sizes.. Many functions have been moved around those countries previously with ease, and will continue to do so as requirements dictate.

Indeed I don't see language being an overly problematic issue, but an additional issue for non-EU countries are VISA's and achieving permanent residence; it constrains things a bit more to EU areas (which is still diverse enough a place to look).

Welease wrote:

But thats not the point (I know it wasn't directed at me, but.. ) it's those high earners that make the decisions on where functions will be located (and obviously where the jobs will be required), and many of them will make those decisions based on their comfort zone (which is why when new managers take over you often see a large shift in direction and scope etc.).. If you implement a tax regime that they feel (irrespective of whether they are right or wrong) is unfair on them they will potentially decide to locate themselves and those functions elsewhere over time. Simply put, the replacements will not be needed as the jobs wont be located here anymore.. The same outcome as (but for different cost reasons) why we saw many companies pick up their business and relocate to Poland etc over the first few years of the bust here.. There was plenty of trained workforce available here, but those senior staff decided that the financial benefits of moving elsewhere were worth it.

Ya but, as addressed above, the management location decision argument is a relatively weak one especially where multinationals who do not have headquarters in Ireland are concerned, where it's less likely for company in Ireland to have much influence in those decisions anyway.

Still, even discounting that it doesn't seem likely that packing up and moving is less costly than just increasing managerial salaries.

Welease wrote:

Thats not to say they we shouldn't have higher tax rates.. We should look into every option.. I'm just pointing out that no decision made will ever have no potential negative ramifications.. If you push too much in any direction you will see a reaction, and that potential reaction needs to be understood and comprehended as part of the decision.

Absolutely, there will be some negatives, though a lot of posters don't seem to engage with arguing how such negatives might outweigh the gain; what seems to be missing in replies to my posts in general, is that they are all grounded in the context that any negatives or exceptions to my arguments, do not outweigh the gain.

That is really my wider argument that people are not engaging in, focusing instead on specific exceptions to the arguments I make (where I didn't apply those arguments so absolutely in the first place), instead of taking it in context.

Monty Burnz

KyussBishop wrote: »

Absolutely, there will be some negatives, though a lot of posters don't seem to engage with arguing how such negatives might outweigh the gain; what seems to be missing in replies to my posts in general, is that they are all grounded in the context that any negatives or exceptions to my arguments, do not outweigh the gain.

That is really my wider argument that people are not engaging in, focusing instead on specific exceptions to the arguments I make (where I didn't apply those arguments so absolutely in the first place), instead of taking it in context.

And I would suggest that, lost amongst all your demands that others provide proof for their claims, must be the evidence that you posted somewhere for your claim that there would be gains at all.

I'll have a look back at your posts and see if I can find it.

KyussBishop

Monty Burnz wrote: »

I love your notion that 'workers' are completely homogeneous and can be swapped in and out of an organisation like machine parts. Does it not occur to you that the best people (for those jobs) are currently in situ, and if you chase out the best people with higher taxes, you are replacing them with the second-raters? Do you think companies are more likely to succeed with excellent staff or merely good staff? Which has the competitive advantage? Are companies more or less likely to hang around/establish themselves in areas where they can't hire the best people?

As I've said, this stuff isn't even economics - it is common sense.

How is your notion that workers are infinitely mobile any more realistic? (I suppose none of the workers have any social, familial, property or other ties to Ireland?)
At least my argument is drawn from a gigantic pool of unemployed people, where the chances of finding (highly-willing) replacements is high; your argument is drawn from a universally-lacking supply of jobs, where you posit a very significant number of workers are going to magically find jobs and move away.

There is no 'common sense' to your arguments when you ignore the wider context of my arguments; you have not even engaged with the part of my argument, that says the benefits of such a tax outweigh the losses.
I've outlined many arguments that severely limit the likelihood of such an exodus of workers, and thus the potential losses; you seem to be implicitly claiming that the loss will outweigh the gain, without any arguments specifically backing that.

Arguments thus far, have largely been in pointing out exceptions to the arguments I make, where I did not posit those arguments were universally applicable anyway (but that they do apply to a significant number of affected workers/corporations); when considering the exceptions, my arguments still heavily constrain the extent of the negative effects posited, making the losses from them less likely to outweigh gains.

So, what are you arguments that explain how any of the negative effects posited, will outweigh overall gains from the tax? (especially considering the limitations put in place by my arguments)

KyussBishop

Monty Burnz wrote: »

And I would suggest that, lost amongst all your demands that others provide proof for their claims, must be the evidence that you posted somewhere for your claim that there would be gains at all.

I'll have a look back at your posts and see if I can find it.

Yes, obviously the gains will be an immediate increase in tax gains from high-earner workers; if you make counterclaims that workers/corporations will start leaving etc., you need to show (both that that will happen, and what quantity) and how that will outweigh the immediately obvious gains.

Welease

KyussBishop wrote: »

Absolutely, there will be some negatives, though a lot of posters don't seem to engage with arguing how such negatives might outweigh the gain; what seems to be missing in replies to my posts in general, is that they are all grounded in the context that any negatives or exceptions to my arguments, do not outweigh the gain.

That is really my wider argument that people are not engaging in, focusing instead on specific exceptions to the arguments I make (where I didn't apply those arguments so absolutely in the first place), instead of taking it in context.

But .. and this is a BIG but.. there is no context just a high level opinion with no specific detail (and counter arguements like mine with high level and little detail).. hence the circular arguements, there is essentially nothing of substance to debate..

A statement like tax the rich means nothing.. what income is "rich"? which assets are we talking about? How many people fit that segment? How much tax are we talking about? How much can be raised? What is the cost to business etc etc etc..

Once that is established as an arguement, then proper contextual counter arguements can begin around costs, benefits, negatives and loopholes (of which there will be many).

At the end of the day.. any implementation of a tax will have to be specific otherwise it doesn't exist.. You cannot state there will be a gain without knowing the answers to the questions above...

KyussBishop

Okey, lets say a 90% tax on income over €100,000, just to pin the argument down somewhat; that would largely cover executive/managerial/asset income I would think.

Monty Burnz

KyussBishop wrote: »

How is your notion that workers are infinitely mobile any more realistic? (I suppose none of the workers have any social, familial, property or other ties to Ireland?)

If you can't quote the post where I said that workers are 'infinitely mobile', I suggest that you are creating straw men and arguing in bad faith, and to be honest I can't be arsed wasting my time on people who do that.

Welease

KyussBishop wrote: »

Okey, lets say a 90% tax on income over €100,000, just to pin the argument down somewhat; that would largely cover executive/managerial/asset income I would think.

ok fair enough (and I assume you are somewhat joking but lets run with that)..

How much money would that raise? (i think someone did actually put an income breakdown chart on here, so we may be able to get an idea of the possible value), and what loop holes will exist (subcontracting work via a company and being paid via dividends for example.)

As an aside, those who earn more than 100K will largely have expenses (mortgages, cars, costs etc.) far in excess of those on 30K for example.. You now argueably put them in a position whereby they default on the mortgage. Within a multinational do you feel they will stay resident in this country to go bankrupts? What would be the impact of that person moving to another country and over time taking those departments with them (which I have seen done numerous times).

christmas2012

Taxing the poor certainly hasnt produced much wealth - I think its about time someone has asked the question,with regards to taxing the rich..

But i think some heavy duty laws need to be fast tracked before taxing the rich,such as making it hard for them to pack up and leave,or introducing a levy for leaving,such as a leaving tax they have to pay before leaving and/or denouncing their citizenship.They should have a tax for that,and maybe make it higher than the tax they would get if they were to stay in the country they are being taxed in..

Welease

christmas2012 wrote: »

Taxing the poor certainly hasnt produced much wealth - I think its about time someone has asked the question,with regards to taxing the rich..

But i think some heavy duty laws need to be fast tracked before taxing the rich,such as making it hard for them to pack up and leave,or introducing a levy for leaving,such as a leaving tax they have to pay before leaving and/or denouncing their citizenship.They should have a tax for that,and maybe make it higher than the tax they would get if they were to stay in the country they are being taxed in..

Either you missed a :rolleyes: or WOW......

KyussBishop

Monty Burnz wrote: »

If you can't quote the post where I said that workers are 'infinitely mobile', I suggest that you are creating straw men and arguing in bad faith, and to be honest I can't be arsed wasting my time on people who do that.

What is implicit in your arguments, is you think a significant enough level of high earner workers will leave to make the losses from such a tax outweigh the benefits; 'infinitely mobile' may be an exaggeration, but you don't qualify how such a large number of workers would be capable of making such a move.

Count Dooku

KyussBishop wrote: »

Yes, obviously the gains will be an immediate increase in tax gains from high-earner workers; if you make counterclaims that workers/corporations will start leaving etc., you need to show (both that that will happen, and what quantity) and how that will outweigh the immediately obvious gains.

a) top 10% high earners pay about 50% of income taxes
b) Ireland with 52% top tax rate already in top 7

http://www.imf.org/external/pubs/ft/scr/2012/cr12265.pdf
c) it means that income tax can be increased only by 5-8%, otherwise only those who paid by state will stay, everybody else will leave to countries which deliver something for taxes apart from subsidies for left wing populism
d) even if you increase top tax by 10%, it will increase 50% income tax paid by 5-6% (about 500-700 millions)
e) if only 20% will leave, it will reduce total income tax take by 10% - 1.3Bn
net loss - 700 millions
net gain - happy left wing populists who can blame rich for everything

KyussBishop

Welease wrote: »

ok fair enough (and I assume you are somewhat joking but lets run with that)..

How much money would that raise? (i think someone did actually put an income breakdown chart on here, so we may be able to get an idea of the possible value), and what loop holes will exist (subcontracting work via a company and being paid via dividends for example.)

I've got a very conservative (and very inaccurate, biased towards low end) estimate from the chart on P69 of this:
http://www.nerinstitute.net/download/pdf/qef_summer_part_4_distribution_of_income_and_wealth.pdf

Assuming a 51% tax intake on income above €100,000 now, an increase of 39% tax intake on income over €100,000 would be about €1.16 billion (remember, this is a conservative estimate, based on the low-end of those stats).

There will probably be loopholes alright, but that's pretty hard to factor in, so all of this is just initial estimates.

Welease wrote:

As an aside, those who earn more than 100K will largely have expenses (mortgages, cars, costs etc.) far in excess of those on 30K for example.. You now argueably put them in a position whereby they default on the mortgage. Within a multinational do you feel they will stay resident in this country to go bankrupts? What would be the impact of that person moving to another country and over time taking those departments with them (which I have seen done numerous times).

It's hard to tell what the losses here would be really; some would probably have trouble with mortgages, but could probably still manageably pay it off over time by cutting down expenses.

Between €100-150-200k they'd lose something around an extra $0-24-49k; it's a lot but I don't think it would break the bank for many considering how much they earn, and the number having to default would not (I imagine) eat far into the tax gains.

I think there would be little to any effect on multinationals really; the arguments so far on that front, limit the effect to very specific industries that can get tax breaks elsewhere.
The whole idea of someone moving an entire multinational out of Ireland, over an increase in income tax is, I think, very unrealistic (especially when it would cost less to just increase salaries for the execs/managers).

KyussBishop

Count Dooku wrote: »

c) it means that income tax can be increased only by 5-8%, otherwise only those who paid by state will stay, everybody else will leave to countries which deliver something for taxes apart from subsidies for left wing populism

If you make the claim people will leave, got to back it up; I argue not many companies (and thus jobs) will leave, and arguments for the specific instances where they might are lacking.

Count Dooku wrote: »

d) even if you increase top tax by 10%, it will increase 50% income tax paid by 5-6% (about 500-700 millions)
e) if only 20% will leave, it will reduce total income tax take by 10% - 1.3Bn
net loss - 700 millions
net gain - happy left wing populists who can blame rich for everything

I don't want to increase it by 10% though, I want to increase it by 39% (and primarily for those over €100k)
There's not a lot of evidence that this will lead to an exodus, and your 20% figure doesn't breakdown the stats of who would be leaving or the income range you are talking about, so you will need new base figures to work from.

Welease

So in essence, as per Count's data..

The people who contribute the bulk of taxes to run this country (by a long way), and argueably the ones who create and maintain the industry that employ the rest, are the ones you want to hit hardest?

I'm guessing much like the other solutions in here.. its because you don't fall into that category?

(Not being an arse on that last point.. but why are you not suggesting that everyone else step up to the plate and pay their share? So those that actually can create more wealth in this country feel inclined to settle here )

KyussBishop

Welease wrote: »

So in essence, as per Count's data..

The people who contribute the bulk of taxes to run this country (by a long way), and argueably the ones who create and maintain the industry that employ the rest, are the ones you want to hit hardest?

No not per counts data as the rates and income brackets it's based on are not the same, in fact a revised (and still very conservative) estimate based on p70 of the document I linked, puts the increased income at €1.47 billion rather than my previous lower estimate.

I am proposing that those with (far and away) the most enormous amount of disposable income get taxed a greater amount.
If you propose that these people are 'job creators' or some such, you have to show that; note that some of them will be job creators, yes, but you have to show most of them are to argue against the tax, and you have to both qualify that claim and quantify it.

It seems odd to tie job creation to high (often excessive) salaries like that; you don't have any idea if (or how many of) these peoples income is used to create business or provide jobs.

Note that we are not talking about 'rich' people here, we are talking about high-earners; and as far as the wealthy go, the 'job creator' idea (just because they happen to have a lot of money) is largely mythical and unsubstantiated.

Welease wrote:

I'm guessing much like the other solutions in here.. its because you don't fall into that category?

(Not being an arse on that last point.. but why are you not suggesting that everyone else step up to the plate and pay their share? So those that actually can create more wealth in this country feel inclined to settle here )

Disclaimerizing this doesn't write over the barely concealed accusation of begrudgery; I mean, is it really a far-fetched idea, that there might be other reasons for taxing high income earners, other than irrational personal reasons?

Right now, everybody else in this country is stepping up to the plate, and the increasing costs of living are eating into peoples disposable income; increasing taxes on higher-earners, is increasing taxes on people with greater disposable income.

Count Dooku

KyussBishop wrote: »

If you make the claim people will leave, got to back it up;

Don't have data for France yet, but Maryland as example

The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a "millionaire's tax" pushed through by Gov. Martin O'Malley. The tax, which expired in 2010, in imposed a rate of 6.25 percent on incomes of more than $1 million a year.

The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.

http://www.cnbc.com/id/48120446/In_Maryland_Higher_Taxes_Chase_Out_Rich_Study
Do you have any data which will backup your claim that high earners will stay?

KyussBishop wrote: »

I argue not many companies (and thus jobs) will leave, and arguments for the specific instances where they might are lacking.

IFSC can easily move most of high paid staff without any loss for them

KyussBishop wrote: »

I don't want to increase it by 10% though, I want to increase it by 39% (and primarily for those over €100k)

Did it work in 1980's?

KyussBishop wrote: »

There's not a lot of evidence that this will lead to an exodus, and your 20% figure doesn't breakdown the stats of who would be leaving or the income range you are talking about, so you will need new base figures to work from.

Even small change in usc increased number of tax exiles from 3050 in 2006 to 10,686 in 2012

Quin_Dub

Monty Burnz wrote: »

Simplistic thinking - many high-skilled jobs attract people from around the world. Think Google HQ, for example. If companies find they can't attract the right people due to reduced take-home pay, or they are forced to increase salaries to compensate for these increased taxes, they may well shut up shop and open in a more friendly business environment.

This is the core point of this..

Yes - the People earning €100k+ a year may not move (at least initially) but their job will move fairly soon..

Who is earning €100k+ in the current climate?? - If we exclude the public sector senior staff and TD's who aren't going anywhere..What's left..

The majority of these positions are in High Tech Global Multi-nationals , IT , Pharma etc. - Highly mobile companies whose business has little or no concrete roots in Ireland - The staff in these companies by and large do not support the Irish market - They cover European or global responsibility. These jobs could be done ANYWHERE...

I work for one of those companies and they categorise each office location in terms of it's cost (High , Medium & Low) - There is a total embargo on hiring in any High cost location - They actively look to reduce headcount in those locations to the minimum.. When I want to hire more staff , I can only hire in Low or Medium locations...

Ireland is currently considered a "Medium" cost location - An increase in wage costs would push Ireland to High cost. Whilst they might not actively make people redundant what would happen is that new positions in the company would not be offered in Ireland , anyone leaving from the Irish office would not be replaced - the job would go elsewhere.

Yes - Everyone has to pay their fair share in terms of tax , but the SF/ULA refrain of "burn the rich" is simply pandering to the disenfranchised trying to win votes without actually evaluating the implications.

(BTW - ALL political parties do this kind of Bull**** trumpeting in their own spineless vote gathering way so not picking out SF/ULA in particular on this topic)

Welease

I was mid way though a detailed response to each and every point, and to be honest it's pointless.. This will go round and round in circles for days. We fundamentally disagree on the way forward, and little data exists to support the points being made (beyond how much potential income could be generated)

If you believe your plan is as failsafe and correct as you believe, then send it off to Enda and we shall await it's implementation..

Count Dooku

KyussBishop wrote: »

Note that we are not talking about 'rich' people here, we are talking about high-earners; and as far as the wealthy go, the 'job creator' idea (just because they happen to have a lot of money) is largely mythical and unsubstantiated.

Do you mean that jobs created by low earners?

KyussBishop

Count Dooku wrote: »

Don't have data for France yet, but Maryland as example

http://www.cnbc.com/id/48120446/In_Maryland_Higher_Taxes_Chase_Out_Rich_Study
Do you have any data which will backup your claim that high earners will stay?

Correlation does not equal causation, you do not know why those people moved, and the chairman heading Change Maryland is the owner of a very significant real estate business (working with money in the range of billions) which puts him in a position of conflict of interest there; the quality of the claims in that article are dubious as a result.

I don't have to prove high earners will stay, I've provided lots of arguments which heavily constrain their reasons for leaving; you have to prove both that they are capable of, likely to and will leave, and that enough will to make the benefits of the tax outweigh the costs.

Starting with something in the context of Europe might help a bit more there.

Count Dooku wrote: »

IFSC can easily move most of high paid staff without any loss for them

Okey; how much of their staff is mobile enough to do this, and what range of losses would there be?

Since not all of their staff will be mobile enough to move out, that may necessitate shutting down some operations and firing people, which would be a cost to them.

Count Dooku wrote: »

Did it work in 1980's?

The goal is increasing tax intake from high earners; if they increased the tax rate on high earners in the 80's, then yes I think it worked in getting greater income from them?

Count Dooku wrote: »

Even small change in usc increased number of tax exiles from 3050 in 2006 to 10,686 in 2012

Again, correlation does not equal causation; how do you equate one with the other?

waster81

Monty Burnz wrote: »

...and watch them leave.


I wonder how much tax income France will lose when this guy and thousands of others figure that the government taking three quarters of their earnings is just a bit too much?

Will any of our ULA/SF friends here explain why the same would not happen here under their "tax the rich" proposals? Especially considering that Irish people have even greater mobility than the French, able to work in the US, Canada, NZ, Aus, UK, India etc.

Please not I am not talking about the moral/ideological aspect of this - just the pragmatic view.

Because most of the would be unemployable in most other countries.

What other country in their right mind would hire any of our bankers, auditors etc.

They know they are onto a good thing here

KyussBishop

Welease wrote: »

I was mid way though a detailed response to each and every point, and to be honest it's pointless.. This will go round and round in circles for days. We fundamentally disagree on the way forward, and little data exists to support the points being made (beyond how much potential income could be generated)

If you believe your plan is as failsafe and correct as you believe, then send it off to Enda and we shall await it's implementation..

I'll accept that as a concession of argument so; I've provided well backed points, and stats showing the immediate gain from such policies, others have not quantified the level of harm to come from it at all.

waster81

oppenheimer1 wrote: »

Tax the rich and it will solve our problems - this is a fallacy perpetuated by the ULA on a somewhat naive electorate. First of all, there are not many high earners in Ireland and the majority of the owners of successful businesses do not pay themselves huge wages. Why would they take more than they need out of their companies when it is taxed at 55%? Most rich leave their wealth sitting in companies or investment vehicles and cannot be touched by income tax law or make investments with it. The only real high cash earners are in the IFSC and they are highly mobile. At the height of the boom less than 1000 people earned over €1m in the entire country. Even if you taxed these people at 100% it would generate an insignificant sum in reality. Theres simply not enough of these people.

The unfortunate and painful reality is that in order to raise significant sums is that you have to raise taxes on the largest co-hort of taxpayers, the middle income earners or business. I'm not saying higher earners should not see an increase in their taxes (they should in the interests of fairness), but the returns talked about by the ULA etc are clearly overstated. Low tax on business has been a cornerstone of our economic policy and is seen as untouchable. The idea of even tampering with it might do more harm than good and we cannot afford to see our major exporters leaving.

So what if some of the guys from the IFSC leave, as you say they are mobile, if they do leave then they can be replaced

Anyways the IFSC is where a lot of our problems occur

KyussBishop

Quin_Dub wrote: »

This is the core point of this..

Yes - the People earning €100k+ a year may not move (at least initially) but their job will move fairly soon..

Who is earning €100k+ in the current climate?? - If we exclude the public sector senior staff and TD's who aren't going anywhere..What's left..

The majority of these positions are in High Tech Global Multi-nationals , IT , Pharma etc. - Highly mobile companies whose business has little or no concrete roots in Ireland - The staff in these companies by and large do not support the Irish market - They cover European or global responsibility. These jobs could be done ANYWHERE...

I work for one of those companies and they categorise each office location in terms of it's cost (High , Medium & Low) - There is a total embargo on hiring in any High cost location - They actively look to reduce headcount in those locations to the minimum.. When I want to hire more staff , I can only hire in Low or Medium locations...

Ireland is currently considered a "Medium" cost location - An increase in wage costs would push Ireland to High cost. Whilst they might not actively make people redundant what would happen is that new positions in the company would not be offered in Ireland , anyone leaving from the Irish office would not be replaced - the job would go elsewhere.

Yes - Everyone has to pay their fair share in terms of tax , but the SF/ULA refrain of "burn the rich" is simply pandering to the disenfranchised trying to win votes without actually evaluating the implications.

(BTW - ALL political parties do this kind of Bull**** trumpeting in their own spineless vote gathering way so not picking out SF/ULA in particular on this topic)

It really depends on how many jobs and what kind we are looking at in those wage brackets; if we moved the tax band up to €150k, we'd still be looking at at least a €1.1 billion return in tax.

Even at €275k+, we would be looking at €720 million.

What kind of (and how many) jobs are we looking at in those income ranges?

Welease

KyussBishop wrote: »

I'll accept that as a concession of argument so; I've provided well backed points, and stats showing the immediate gain from such policies, others have not quantified the level of harm to come from it at all.

/shrug .. fair enough, If you believe your plan is perfect then as I said ship it off to Enda I'll gladly concede the arguement when the taxation you suggest is implemented...

If you want a decent discussion, then can I suggest you apply the normal rules of engagement here and you actually provide the data to support your position and plan, not expect others to provide data to counter your loose claims.

If you can show the level of disposable income available to those in the 100K bracket then please do so, if you can show that jobs won't move abroad or impact employment levels then again be my guest, if you can demonstrate that taxation implications are only beneficial then do so...

If you can't or won't then its a waste of time to continue the discussion...

Count Dooku

KyussBishop wrote: »

Even at €275k+, we would be looking at €720 million.

Half of them already abroad, it means that country already lost at least 1.6 Bn tax revenues

KyussBishop

Welease wrote: »

/shrug .. fair enough, If you believe your plan is perfect then as I said ship it off to Enda I'll gladly concede the arguement when the taxation you suggest is implemented...

If you want a decent discussion, then can I suggest you apply the normal rules of engagement here and you actually provide the data to support your position and plan, not expect others to provide data to counter your loose claims.

If you can show the level of disposable income available to those in the 100K bracket then please do so, if you can show that jobs won't move abroad or impact employment levels then again be my guest, if you can demonstrate that taxation implications are only beneficial then do so...

If you can't or won't then its a waste of time to continue the discussion...

I've provided quite a number of arguments to that extent, as well as (low-end) figures on potential tax income; it's safe enough to posit that most income beyond €100k will be disposable, and if people disagree than just take it up to the next notch of €150k, or even €270k, and we are significantly in the plus on tax intake.

I think insofar as the rules of engagement, people are pretty unclear on the burden of proof; it really isn't up to me to show that people or companies won't leave (indeed I acknowledge some will), I argue that not enough will leave to make it a net-negative effect, and I've provided arguments rationalizing this, which heavily constrain the types that are likely to leave.

At that point, the burden is on showing, out of the remaining small number people/jobs (and possibly companies) likely to leave, that the costs of that will exceed the benefits.

I'm more than happy to progress the discussion to comparing competing stats countering one another, but the level of sniping doesn't make the discussion so conducive to that.

KyussBishop

Count Dooku wrote: »

Half of them already abroad, it means that country already lost at least 1.6 Bn tax revenues

Can you provide any sources to back this up?

Welease

KyussBishop wrote: »

I've provided quite a number of arguments to that extent, as well as (low-end) figures on potential tax income;

You provided potential tax income.. thats all..

KyussBishop wrote: »

it's safe enough to posit that most income beyond €100k will be disposable, and if people disagree than just take it up to the next notch of €150k, or even €270k, and we are significantly in the plus on tax intake.

And.. here we go again.. are you going to provide any data sources to backup that claim? If not, then the claim is an opinion and has little value..

KyussBishop wrote: »

I think insofar as the rules of engagement, people are pretty unclear on the burden of proof; it really isn't up to me to show that people or companies won't leave (indeed I acknowledge some will), I argue that not enough will leave to make it a net-negative effect, and I've provided arguments rationalizing this, which heavily constrain the types that are likely to leave..

No you have provided opinion again.. not data or proof that your claim exists in reality. You want everyone else to provide data that your opinions are false.. that's not how it works..

KyussBishop wrote: »

At that point, the burden is on showing, out of the remaining small number people/jobs (and possibly companies) likely to leave, that the costs of that will exceed the benefits.

Again, do you have any data that supports a claim that only a small number of companies would leave?

KyussBishop wrote: »

I'm more than happy to progress the discussion to comparing competing stats countering one another, but the level of sniping doesn't make the discussion so conducive to that.

It's not sniping.. it's requesting that you either backup your claims so we can progress the discussion or your realise and understand it's just opinion and you have proven nothing..

I have spend the bulk to 20 years putting together plans for products and ventures. Each and everytime stakeholders will ask questions to determine what we do and don't know.. It is my job to answer those questions if I aim to be successful. It has never been acceptable for me to turn around and ask them to prove I am wrong.. I would be laughed out of the building.. It also applies in this case, it's not up for other to provide data to dispute your opinion.. it is your job (if you wish to engage them successfully) to prove your point to them. Once you provide that data, then discussion can begin in earnest..

(btw.. I am trying to avoid pointless arguement and discussion here which i why i have taken the time to respond... )

Edit to give a specific example..

If i take your figures and level of data required..

Around 800K people earn more than the industial average wage (35K).. As people can easily live on less than the average wage, we can assume this is primarily disposable income.. therefore why not expand your plan and tax anything above 35K at 90%.. which essentially would wipe out the defecit.. and lets face it.. folks on those wages definately don't have a say in where jobs are created... We all in for that? I'm guessing No.. and my point is.. I have provided essentially the same level of data as you have yet the opinion will likely now differ. Why?

Count Dooku

waster81 wrote: »

Because most of the would be unemployable in most other countries.

source please?

Count Dooku

KyussBishop wrote: »

Can you provide any sources to back this up?

number of 275K+ earners - 10,677
amount of tax paid - 1.738Bn
http://www.revenue.ie/en/about/publications/statistical/2010/income-distribution-statistics.pdf
Number of tax exiles - 10,686
http://www.independent.ie/national-news/lobbyists-tell-noonan-to-leave-tax-exiles-alone-3216981.html

Count Dooku

KyussBishop wrote: »

I've provided quite a number of arguments to that extent, as well as (low-end) figures on potential tax income; it's safe enough to posit that most income beyond €100k will be disposable, and if people disagree than just take it up to the next notch of €150k, or even €270k, and we are significantly in the plus on tax intake.

Haven't seen in your posts much external sources what will back your claim that most of high earners will stay and number which will leave will be insignificant for tax take

waster81

Count Dooku wrote: »

source please?

Well don't see Sean fitz, drumm etc hired by any banks do you

Welease

waster81 wrote: »

Well don't see Sean fitz, drumm etc hired by any banks do you

Busy working with developers
http://www.highbeam.com/doc/1G1-245211611.html

waster81

Count Dooku wrote: »

a) top 10% high earners pay about 50% of income taxes
b) Ireland with 52% top tax rate already in top 7

http://www.imf.org/external/pubs/ft/scr/2012/cr12265.pdf
c) it means that income tax can be increased only by 5-8%, otherwise only those who paid by state will stay, everybody else will leave to countries which deliver something for taxes apart from subsidies for left wing populism
d) even if you increase top tax by 10%, it will increase 50% income tax paid by 5-6% (about 500-700 millions)
e) if only 20% will leave, it will reduce total income tax take by 10% - 1.3Bn
net loss - 700 millions
net gain - happy left wing populists who can blame rich for everything

Point a,b,c don't prove that if we increase tax the rich will leave

e) those that leave will be replaced so income wont decrease by your 700 million

ardmacha

Point a,b,c don't prove that if we increase tax the rich will leave

e) those that leave will be replaced so income wont decrease by your 700 million

Taking ever more from those who work and giving it to those who don't work is not likely to lead to a successful economy. When income taxes go much beyond 50% various factors kick in to cause people to fail to earn taxable income, which is why they don't nowadays go much beyond this point.