Tax the rich

Monty Burnz

waster81 wrote: »

So you think it was a large significant factor - thats even worse

So you can't even back up your claim that I said it was a 'small' factor?

Why am I not surprised. :rolleyes:

waster81

Monty Burnz wrote: »

So you can't even back up your claim that I said it was a 'small' factor?

Why am I not surprised. :rolleyes:

Factors are either small or large which one do you believe it was in contributing to Ronaldos transfer

Still waiting on the quotes from your evidence to prove your point ,

Monty Burnz

waster81 wrote: »

Factors are either small or large which one do you believe it was in contributing to Ronaldos transfer

Still waiting on the quotes from your evidence to prove your point ,

Why would I waste time posting more evidence for you, waster? You have posted absolutely nothing. Look up 'quid pro quo' somewhere.

KyussBishop

Welease wrote:

But as per my comment.. If the average wage is 35K, then by the same logic anything above could be considered disposable.. So why not tax all above of that? (f we dont need to consider discrectionary income for high earners then would it not also be relevant to lower income earners..)

You don't want to tax all of that, because it's more fair to tax more, those with a significantly greater amount of disposable income than average; it is meant as a progressive tax on the high end, not a flat-tax.

The point at which the tax band starts, doesn't have to have a rigid ideological consistency; it just needs to start high enough to be considered fair.

Welease wrote:

True.. but that does nothing to prove the claim that those people are unlikely to move countries and take jobs with them.. It just proves the guys emptying the bins don't earn 100K+ which we knew..

What it does do though, is open the line of argument regarding management/exec positions, where the costs of moving relative to staying make less sense.

Simply increasing management/exec wages seems (without needing to delve into stats) an incredibly less costly solution than moving the company (and losing a lot of their workforce who aren't mobile enough to move with, having to rehire/retrain).

Welease wrote:

Again, you have provided no such statistical information.. You have provided proof that the highest paid are in executive/managerial positions.. Nothing else.. Noone has disputed this fact.. Everything from that point onwards is your opinion.

I think in the context of multinational companies big enough and with the opportunity to actually make the move, the costs of just paying managers more seems unlikely to exceed the costs of moving; get into this more a bit below.

Welease wrote:

Incorrect.. No 100K+ manager I know (and I know plenty) sets their own salary, but they can and do decide where resources are located.

Ya but it would be a collaborative decision between all tiers of management in a company, in deciding to move a company like that; since that's a big financial move, it stands to reason that people within that deciding group (some of them, maybe higher up) would be in enough of a position of influence to just modify salaries instead.

Welease wrote:

No.. it shows that high paid positions tend to be managerial/executive etc.. noone disputes this..
It shows that in % terms its less than overall employees..noone disputes this.
It does not show any costs for staying/leaving relative or otherwise, it does not demonstrate the likelyhood or business choosing to stay or go, and it does not determine the impact (high or low) of variances to your plan if business decided to relocate as you admit can happen.. These are the issues being raised which remain unaddressed.

Well I think it would be self evident enough really, that just upping peoples salary would be less costly; it will be hard to find stats showing this, since it is not easy to get a breakdown of company employment or expenditure on management/administration.

If we start with €150k in finance type jobs, that narrows it down to a few job positions:
http://www.irishjobs.ie/ForumWW/SalarySurvey.aspx?SalarySurveyID=725&BannorID=a2f5bc73&BZoneID=82&ParentID=75&CID=160

Managing director (just one of those), Head of Finance (again one of those), Chief Financial Officer (again one), Financial Director (not going to be many of these, if more than one).
That is not a lot of people, so for the finance industry it does not look like (at the €150k band) the cost of upping these peoples salary in line with tax, will break the bank?

You can even take the tax band up to €275k, and it makes even less financial sense to move companies; would you agree that at the €275k mark, it is unlikely for there to be reasonable financial reasons for companies to move?

Welease wrote: »

And thats I said this will go round in circles

You have provided data on types of jobs which earn high wages, and the numbers of people who earn high wages.. anything beyond that has been mere opinion with no data or facts to backup the claims.
If you can't provide data, then you really can't dispute counter claims either.. it's all opinion, and it's probably clear at this stage the differences in opinion..

Well that's ok so long as we further solidify our stats/arguments each time we go round

Welease wrote:

Edit - Its worth noting in cost terms.. Replacing even 50K taken from a manager will cost the company 500K per year for each manager (with 90%/450K going straight to the government). That gets colossaly expensive very quickly, as is not as cheap as some would consider.

Fair point, which leads to the question of determining how many people are likely to be earning such salaries (lets set it at €150k+ for sake of simplicity); in my financial firm example above, this looks unlikely to exceed about half a dozen.

That's a lot of money indeed, but not one which would break the bank; you can reduce the figures further by using the €275k+ starting point, which pretty much starts targeting the highest executives exclusively.

It's also worth considering: How valuable are these managers? Are they really worth the pay increase?
For some positions it would take a bit of time for train-in, but is the cost of training someone in at a lesser salary worth the transitionary cost of the tax? (and how many of these managers will even have options enough to move anyway?)

Count Dooku wrote:

Only after you provide reliable stats how many wealthy will stay here after increase top rate to 95%

Heh, okey so I guess the exiles argument is unsubstantiated then.

Monty Burnz

It is bizarre how one side of this discussion thinks they are making a good fist of their position without posting anything that supports what they are saying. Nothing.

KyussBishop

Welease wrote: »

Some rough numbers examples on costs, and the required funding to bridge the tax gap as suggested (head is fried today, so poke away at the numbers.. I'm sure some errors are there )..

1 Dept/Small Company/Software Team

Current Costs
Executive - €160K
8 Employees - €50K per head
Total Wage bill per year - €560K

New tax Costs (90% rate over 100K)
Executive - €547 (Basic Executive - €117K & Additional Extra Cost to cover €43K shortfall - €430K (€387 in taxes to faciliate))
8 Employees - €50K per head
Total Wage bill per year - €947K

For the same wage costs (given we are already not considered a low cost wage zone).. The company could be moved elsewhere and at the same cost reconfigure to..

Executive - €160K
15 Employees - €50K per head
Total Wage Bill - €910K

Almost twice the number of employees at a saving on €37K.. PER YEAR.

Edit - Already seen that the numbers above don't allow for the difference in current rates vs extended rates (39%+ difference, so my numbers are well overcooked).. but someone else will have to do the figures.. My brain will take no more today..

The general point worth remember is.. the increased costs are in terms of multiple employee costs.. If you offered me the option of employing 3-4 more people or paying the extra tax, which would be better for the country?

Good points, though an essential part that is missing is corporation tax; would need to factor that into company profits vs expenses on salaries.

Count Dooku

waster81 wrote: »

Again another post that doesn't prove that if tax is increased the people will leave the country in droves

It was only to show low income tax take is due low taxes for low earners, not low taxes for rich

Count Dooku

KyussBishop wrote: »

I think in the context of multinational companies big enough and with the opportunity to actually make the move, the costs of just paying managers more seems unlikely to exceed the costs of moving; get into this more a bit below.

Definitely it won't create any new jobs, this is why government excluded top management of multinationals from paying tax above 75K
http://www.rte.ie/news/2012/0208/budget.html

KyussBishop wrote: »

It's also worth considering: How valuable are these managers? Are they really worth the pay increase?

Are you comparing multinational with public sector where nearly most of management doesn't worst their money because final decision always belongs to trade unions?

KyussBishop wrote: »

Heh, okey so I guess the exiles argument is unsubstantiated then.

At least I had some figures, you didn't produce anything apart from few illogical statements

Monty Burnz

Count Dooku wrote: »

At least I had some figures, you didn't produce anything apart from few illogical statements

Seriously, this is a waste of time. We are pushing against an open door here - there is no counter-argument being provided.

waster81

Monty Burnz wrote: »

Why would I waste time posting more evidence for you, waster? You have posted absolutely nothing. Look up 'quid pro quo' somewhere.

You provided what you perceive to be evidence

Welease

KyussBishop wrote: »

Good points, though an essential part that is missing is corporation tax; would need to factor that into company profits vs expenses on salaries.

Yes and No.. If they decide to relocate then Corp tax could be an issue (also on the assumption that the company is making enough profit to actually generate a significant difference.. in the current climate many are merely attempting to exist)..

If they decide to stay located here... best case scenario is they wont hire 3-4 employees that the extra tax cost consumed (150-200K) (and those folks will stay on the dole consuming a % of the taxes collected), worst case scenario is the they decide to keep costs the same immediately, and make 3-4 staff redundant (essentially keeping 6-8 people on the dole who could have been employed)..

There are direct SW ramifications to all taxes collected, and those need to be deducted from any potential tax collected. In this example you could potentially lose 8 x €50K salary taxation gains and replace with 8 x SW/Medical Card etc. costs which all need to be deduced from the gains from the 1 x Taxation gain, while also restricting the ability of the company to compete on an international level..

Its worth also noting, that your continual mention of multinationals while relevant is not quantified in terms of % coverage of those in that salary range. A % of those in that range will be working for sucessful local companies, where the only option available to the senior members/owners will be to reduce staff levels to cover the new taxation requirements. You may raise more taxes.. but you will redcuce employment levels in doing so..

KyussBishop

Count Dooku wrote: »

Definitely it won't create any new jobs, this is why government excluded top management of multinationals from paying tax above 75K
http://www.rte.ie/news/2012/0208/budget.html

It's not supposed to create jobs it's supposed to bring in more tax; that tax break applies to very specific industries and will only last 3 years.

Count Dooku wrote: »

Are you comparing multinational with public sector where nearly most of management doesn't worst their money because final decision always belongs to trade unions?

? No.

Count Dooku wrote: »

At least I had some figures, you didn't produce anything apart from few illogical statements

lol, okey lets step through those figures and your argument:
10,677 earners at or above €270k
10,686 tax exiles of unknown income
???
therefore, 10,686 tax exiles all earn €270k or above

Your argument might fundamentally not make any sense but hey, at least you had some figures.

KyussBishop

Welease wrote: »

Yes and No.. If they decide to relocate then Corp tax could be an issue (also on the assumption that the company is making enough profit to actually generate a significant difference.. in the current climate many are merely attempting to exist)..

If they decide to stay located here... best case scenario is they wont hire 3-4 employees that the extra tax cost consumed (150-200K) (and those folks will stay on the dole consuming a % of the taxes collected), worst case scenario is the they decide to keep costs the same immediately, and make 3-4 staff redundant (essentially keeping 6-8 people on the dole who could have been employed)..

There are direct SW ramifications to all taxes collected, and those need to be deducted from any potential tax collected. In this example you could potentially lose 8 x €50K salary taxation gains and replace with 8 x SW/Medical Card etc. costs which all need to be deduced from the gains from the 1 x Taxation gain, while also restricting the ability of the company to compete on an international level..

Well, if a companies profit margin was low to the point that they were just trying to exist, they likely wouldn't have the option of moving (which would be an expensive thing to undertake); they would likely have to put up with the tax whether they like it or not.

Companies capable of moving, can also decide to instead not alter managerial/executive salaries after tax changes, keeping the companies balance sheet mostly the same; the tax could even be introduced slowly over 5-10 years, making it unlikely for those workers to be caught unprepared (give them time enough to avoid significant debt issues from mortgages, as they have those extra years to prepare for the hit).
Such a graduated introduction would also give companies plenty of time to train up new managers for those they anticipate will move away, allowing them to keep on managers at a lower after-tax pay.


When you think about it I suppose, it is primarily the transitionary period when introducing the tax that is an issue (when worker debt, and potential movement of workers is an issue); it may cause some restructuring of companies in the short term, but in the long term you are likely to increase tax intake, so long as you don't set the tax bar (salary it's introduced at) at too low a figure.

When you look at €275k+, it seems to affect a small enough number of people, and provides roughly half of the potential tax intake on high earners, that there does not seem to be anything to lose taxing that high.
When you get to €150k/€100k though, it does get a bit more muddied as there are cases in that earnings bracket that you mention, which may indeed cause harm.

It's a good point also, that any potential increase in unemployment and whatnot, would need to be factored in here too.

Welease wrote:

Its worth also noting, that your continual mention of multinationals while relevant is not quantified in terms of % coverage of those in that salary range. A % of those in that range will be working for sucessful local companies, where the only option available to the senior members/owners will be to reduce staff levels to cover the new taxation requirements. You may raise more taxes.. but you will redcuce employment levels in doing so..

Well the thing about the tax, is that the execs/management aren't required to pass that cost on to the lower paid employees (or the company itself) to compensate themselves; it's a zero-sum game for them as well, where if they pass it on to employees they affect profitability through that, as well as if they took it directly from profits themselves.

The only thing they have to worry about, if they just let the managers sink the cost, is turnover of managers; if they have time from a graduated introduction of the tax, to train new managers to replace possible turnover, that is only a one-time cost to the company that can let them keep on going with a relatively intact balance sheet (except perhaps for execs who take it upon themselves to up salary).

Count Dooku

KyussBishop wrote: »

It's not supposed to create jobs it's supposed to bring in more tax;

Do you mean that highest priority for government must be preserving as much as possible people on dole?

KyussBishop wrote: »

lol, okey lets step through those figures and your argument:
10,677 earners at or above €270k
10,686 tax exiles of unknown income
???
therefore, 10,686 tax exiles all earn €270k or above

Your argument might fundamentally not make any sense but hey, at least you had some figures.

So what is the reason to be a tax exile on average industrial wage?

KyussBishop wrote: »

Your argument might fundamentally not make any sense but hey, at least you had some figures.

While you had nothing

Welease

KyussBishop wrote: »

Well, if a companies profit margin was low to the point that they were just trying to exist, they likely wouldn't have the option of moving (which would be an expensive thing to undertake); they would likely have to put up with the tax whether they like it or not.

So you force them to reduce employment levels by making people redundant..There are very few situations that making people redundant is a good idea.. this is not one of them.

KyussBishop wrote: »

Companies capable of moving, can also decide to instead not alter managerial/executive salaries after tax changes, keeping the companies balance sheet mostly the same; the tax could even be introduced slowly over 5-10 years, making it unlikely for those workers to be caught unprepared (give them time enough to avoid significant debt issues from mortgages, as they have those extra years to prepare for the hit).
Such a graduated introduction would also give companies plenty of time to train up new managers for those they anticipate will move away, allowing them to keep on managers at a lower after-tax pay..

So now the plan is to remove the top performing people in organisations around Ireland (and Entrepreneurs) to make your tax fit?
This is also not taking into account small business/entrepreneurs who are the pinnacle/owner of those business's you will force them to go elsewhere. You don't hand over the reigns to someone else and have to pay them, and you don't bother to create new business (with the all the cost and risk involved) if you won't see any value at the end.

KyussBishop wrote: »

When you think about it I suppose, it is primarily the transitionary period when introducing the tax that is an issue (when worker debt, and potential movement of workers is an issue); it may cause some restructuring of companies in the short term, but in the long term you are likely to increase tax intake, so long as you don't set the tax bar (salary it's introduced at) at too low a figure...

It's nothing of the sort, it's a bad plan.. If you re-ran you figures with the real impact of what you are asking then you would see why it doesn't work.. If it did, then it would exist already and you could point me to figures that supported the case.. It's not the first time someone has asked for the rich to be taxed out of existance.

KyussBishop wrote: »

When you look at €275k+, it seems to affect a small enough number of people, and provides roughly half of the potential tax intake on high earners, that there does not seem to be anything to lose taxing that high.
When you get to €150k/€100k though, it does get a bit more muddied as there are cases in that earnings bracket that you mention, which may indeed cause harm.

You've just gone from taxing 100K people to 10K people.. You have also managed to guarantee bankrupcy of the vast majority of those people.. While someone on 120K can arguably swallow a reduction of 15K or so.. The majority on 300K will not have the facility to absorb a reduction in the order of 150K per year.. You have put them in a position whereby they will have to move their business abroad in order to remain solvent, and those jobs will go with them.

KyussBishop wrote: »

It's a good point also, that any potential increase in unemployment and whatnot, would need to be factored in here too..

But thats the issue, you don't factor in any of the points.. You say "good point" then move on.. Not once have you reran your figures or attempted to include the cost both financially and business wise into your plan.. and those costs are colossal.

KyussBishop wrote: »

Well the thing about the tax, is that the execs/management aren't required to pass that cost on to the lower paid employees (or the company itself) to compensate themselves; it's a zero-sum game for them as well, where if they pass it on to employees they affect profitability through that, as well as if they took it directly from profits themselves...

I'm not sure the point you are making now.. Earlier you said they could just up the salaries of executives to cover.. I pointed out the cost and impact of that (which was large) and now they should just eat the cost? That won't happen, they will look to move their business elsewhere..
We have companies located here because of the low corporation taxation (incl. domestic companies).. If a low taxation regieme is considered a valid reason for them being here, why do you not consider taxing the arse out of them personally as a valid reason for them leaving.. It's the same reason.. they are here to make money, and the decision makers will go where they can and will make the most money.

KyussBishop wrote: »

The only thing they have to worry about, if they just let the managers sink the cost, is turnover of managers; if they have time from a graduated introduction of the tax, to train new managers to replace possible turnover, that is only a one-time cost to the company that can let them keep on going with a relatively intact balance sheet (except perhaps for execs who take it upon themselves to up salary).

Sorry but we have now hit borderline rediculous.. Those managers will leave becuase they know they can earn more elsewhere.. Fair enough I agree (So will their replacements btw). Their replacements are not being paid the massive sums you were taxing.. so you now have caused major turnover at companies.. and the end result is people are no longer being paid the massive wages you wanted to tax, so you get 0 extra tax at the end of this cycle..

Whats the point then?

At the end of your plan
- People in this country won't earn those larger salaries (so you dont get the tax)
- Some companies will have relocated
- Some Entrepreneurs/Business owners will be bankrupt
- More people will be on the dole
- Less people will have been employed in the interm..

- And my guess, is you actually obtain less tax overall..

As I said, there is a (or many) reason(s) why an often shouted plan by the looney left is not in existance in the free capital world.

Why not rerun your numbers taking into account all of the above... and see how much tax you believe you will raise now...

Cuddlesworth

Have you considered the implications for all workers.

You will have placed a artificial pay cap on all professions. What would stop graduating doctors from immediately jumping ship? Or any smart graduate professional/high earner currently? In my personal circumstances, I would leave and I don't earn 100k.

Also, how the hell do you define rich? If a guy earns 150k a year and has a 2 million euro mortgage on a house worth half that, the bloke on the Dole in a council house with no debts has more net value.

creedp

Cuddlesworth wrote: »

Have you considered the implications for all workers.

You will have placed a artificial pay cap on all professions. What would stop graduating doctors from immediately jumping ship? Or any smart graduate professional/high earner currently? In my personal circumstances, I would leave and I don't earn 100k.

Also, how the hell do you define rich? If a guy earns 150k a year and has a 2 million euro mortgage on a house worth half that, the bloke on the Dole in a council house with no debts has more net value.

I think its difficult to argue that someone on €150k a year is not highly paid and could absorb taking on an additional tax burden, even if only for a temporary period. We're back to the ideological argument again .. we can't tax the well off any further cos .. a myriad of reasons (excuses) can be listed. Having said that I think the idea that you would tax people earning €100k, €150k, €200k, etc at 90% is not sustainable. However, the question is could you introduce a new rate of tax (say 50%) on all earnings over €150K? It won't solve our problems but just like cutting special needs assistants it will help close the gap. The problem I see is that many people will not entertain any possibility of increasing tax on well paid people even for a defined period of time. Why? We hear all the time about everybody having to feel the pain but yet we can't increase tax even marginally on persons earning over €150k. Its the same auld story - no problem cutting/taxing so long as its not me!! Or maybe the Sindo is correct and everyone (except all public servants of course) from the person earning €10k pa to above €250pa is suffering so badly that they can't take any more pain.

Welease

creedp wrote: »

I think its difficult to argue that someone on €150k a year is not highly paid and could absorb taking on an additional tax burden, even if only for a temporary period. We're back to the ideological argument again .. we can't tax the well off any further cos .. a myriad of reasons (excuses) can be listed. Having said that I think the idea that you would tax people earning €100k, €150k, €200k, etc at 90% is not sustainable. However, the question is could you introduce a new rate of tax (say 50%) on all earnings over €150K? It won't solve our problems but just like cutting special needs assistants it will help close the gap. The problem I see is that many people will not entertain any possibility of increasing tax on well paid people even for a defined period of time. Why? We hear all the time about everybody having to feel the pain but yet we can't increase tax even marginally on persons earning over €150k. Its the same auld story - no problem cutting/taxing so long as its not me!! Or maybe the Sindo is correct and everyone (except all public servants of course) from the person earning €10k pa to above €250pa is suffering so badly that they can't take any more pain.

As with most things it will depend on who you talk to, and their beliefs..

I do believe there is potential/need to tax people at higher levels including the top earners and I have always believed that.. But when levels of 90% are discussed it becomes rediculous..

The difficulty is always trying to tax those who can afford it, while minimising the damage to those who cannot afford it.. And that in itself is a nigh on impossible task (we all know people on 30K doing fine, and people on 60K+ who are up to their neck in debt.. income in isolation is no indicator on ability to pay). We have ecomically gotten ourselves into a situation whereby people feel entitled to ownership beyond their financial capability and have convinced themselves that everyone else is at fault.. It's an unsustainable position.

If anyone can afford to go on holidays, have xmas presents, iPads/iPhones or whatever.. they yes (and this is going to piss people off) they can afford to pay more tax.. It is as simple as that.. That applies to all income levels.

As per your "everyone but me" comment.. I totally agree.. These pages are full of new taxation suggestions, and they generally involving the suggestee being in the group that pays the minimum..

KyussBishop

Count dooku wrote:

Do you mean that highest priority for government must be preserving as much as possible people on dole?

Since you've replied to me on another thread where I advocate a job guarantee, I don't understand where you get that impression; even without that, this line of discussion and the dole don't seem logically connected.

Count dooku wrote:

So what is the reason to be a tax exile on average industrial wage?

What has that got to do with it though? Neither of us know the starting level of income of tax exiles, and we certainly don't have enough information to posit that each of them must at least start out at €275k+.

It's a bit of a silly line of argument really.

KyussBishop

Welease wrote:

So you force them to reduce employment levels by making people redundant..There are very few situations that making people redundant is a good idea.. this is not one of them.

That's not the logical conclusion though, it would be the employers that make people redundant because they value their own personal income over their workers, and there is no indication that this is what would happen.

The company could keep wages just as they were before, which would not put greater financial pressure on the company.

Welease wrote:

So now the plan is to remove the top performing people in organisations around Ireland (and Entrepreneurs) to make your tax fit?
This is also not taking into account small business/entrepreneurs who are the pinnacle/owner of those business's you will force them to go elsewhere. You don't hand over the reigns to someone else and have to pay them, and you don't bother to create new business (with the all the cost and risk involved) if you won't see any value at the end.

Why would it remove them, and why would (with a graduated introduction of the tax) there not be time to retrain replacements for those who may leave?

The tax does not force anyone to go elsewhere, it is a choice for the people affected whether they want to go elsewhere or not, and the motivations and decisions for/against leaving are a lot more complicated than just factoring in the tax.

The tax would also encourage business where the primary motive is not hierarchical profits for individuals running the company (which is the wrong motive for business, and an attitude which often justifies worsened worker conditions), keeping more money within business and more going to employees (depending on the company of course).

The tax can be set appropriately as well, so that small business creators can still make a nice personal profit (appropriately rewarding their efforts), but putting an upper cap on it so excessive executive/managerial salaries (and all the corrupting influences that places on business) can be discouraged.
I should clarify more: I still definitely want business creators to be rewarded (handsomely) for their efforts, and I don't want the tax set at too low a income bracket such that it discourages this, but there is a point where it becomes excessive so finding an appropriate starting point is important.

Welease wrote:

You've just gone from taxing 100K people to 10K people.. You have also managed to guarantee bankrupcy of the vast majority of those people.. While someone on 120K can arguably swallow a reduction of 15K or so.. The majority on 300K will not have the facility to absorb a reduction in the order of 150K per year.. You have put them in a position whereby they will have to move their business abroad in order to remain solvent, and those jobs will go with them.

How would I be guaranteeing bankruptcy thuogh? You would need to provide a more detailed argument showing that. Also, with a graduated introduction of the tax, these high earners can have plenty of warning and can avoid repercussions from an immediate fall in income.

It also doesn't logically follow that they would have to move business abroad; for a company with probably just a single person earning €300k, I don't understand the motivations for moving the whole business like that and why solvency would be an issue (note that I don't assume any adjustments of salary after the tax; that would be the execs decision to cut into company profits).

Welease wrote:

But thats the issue, you don't factor in any of the points.. You say "good point" then move on.. Not once have you reran your figures or attempted to include the cost both financially and business wise into your plan.. and those costs are colossal.

If you claim the costs are colossal though, you have to show that; if I argue that they are not, I also have to show that, so it's not true to assert either way.

Simple fact here is, we don't have enough information on this point to determine the costs; the primary way to determine that, is to find out how many people are likely to leave, and how many businesses are likely to be affected.

I argue though, that most of the costs that may be pushed on to employees can be avoided by a graduated introduction of the tax; this would avoid immediate shocks in income, allowing those affected by the tax to avoid needing to increase their salary due to debt burdens.
After you adjust the policy to alleviate the problem of debt burdens like that, what is left that will make people affected need to increase their salary? (they still might, but I'm distinguishing from need)

Welease wrote:

I'm not sure the point you are making now.. Earlier you said they could just up the salaries of executives to cover.. I pointed out the cost and impact of that (which was large) and now they should just eat the cost? That won't happen, they will look to move their business elsewhere..

Why would that not happen though? (leaving salaries unadjusted) Especially if it was a graduated introduction of the tax, allowing them to avoid sharp increases in debt burdens.

You are right though, that part of my earlier arguments was that they could up the salaries to cover; however, I believe the graduated introduction reduces the need for almost all of this, since there will be ample time to adjust lifestyle to pay down the debt (e.g. given a 10 year introduction).

Welease wrote:

We have companies located here because of the low corporation taxation (incl. domestic companies).. If a low taxation regieme is considered a valid reason for them being here, why do you not consider taxing the arse out of them personally as a valid reason for them leaving.. It's the same reason.. they are here to make money, and the decision makers will go where they can and will make the most money.

The corporation tax and the personal income tax of high earners are pretty separate; the low corporate tax is to allow companies to be more competitive, not to provide high personal profits. We want the low corporation tax to create competitive companies, not to pad the pockets of a companies hierarchial managerial structure.

I think business owners and skilled management should definitely be rewarded for their talents and hard work etc., but there is a point where salaries can get excessive and it becomes justified to tax them more, and there is also a point where excessive salaries are not commensurate with better management.

Welease wrote:

Sorry but we have now hit borderline rediculous.. Those managers will leave becuase they know they can earn more elsewhere.. Fair enough I agree (So will their replacements btw).

Well I'm not saying they will all leave, I'm saying some will, so the graduated introduction gives time to reduce the impact of this managerial turnover.

If you say, with a graduated introduction of the tax, enough managers will still constantly leave to cause problems, you have to provide something to back that up.
It is highly likely that there will be managers who have ties to Ireland and will thus want to stay, and the same with managers in training too, so it has to reach a balance at some point.

Welease wrote:

Their replacements are not being paid the massive sums you were taxing.. so you now have caused major turnover at companies.. and the end result is people are no longer being paid the massive wages you wanted to tax, so you get 0 extra tax at the end of this cycle..

Whats the point then?

This part doesn't make sense? You jump to a lot of conclusions there without supporting points. There will be some turnover of managers, but with a graduated introduction of the tax this can be spread out over 10 years or so, reducing the problem to a manageable level.
The replacements will not have the same massive sums after-tax as before, but why would they not have the same salary? Lets say they do have a reduced salary though, then the companies wage expenses just reduced.

Welease wrote:

At the end of your plan
- People in this country won't earn those larger salaries (so you dont get the tax)
- Some companies will have relocated
- Some Entrepreneurs/Business owners will be bankrupt
- More people will be on the dole
- Less people will have been employed in the interm..

- And my guess, is you actually obtain less tax overall..

As I said, there is a (or many) reason(s) why an often shouted plan by the looney left is not in existance in the free capital world.

Why not rerun your numbers taking into account all of the above... and see how much tax you believe you will raise now...

Now you're even bringing out silly pejoratives here "looney left", and are piling up on ridicule when I have solutions to most of the problems you bring up; what does that add to the discussion?

I've adjusted the extent of the taxes, and the method of which they would be introduced, based on many of the valid problems you bring up; I'm not looking to enter trenches here.

KyussBishop

Cuddlesworth wrote: »

Have you considered the implications for all workers.

You will have placed a artificial pay cap on all professions. What would stop graduating doctors from immediately jumping ship? Or any smart graduate professional/high earner currently? In my personal circumstances, I would leave and I don't earn 100k.

Also, how the hell do you define rich? If a guy earns 150k a year and has a 2 million euro mortgage on a house worth half that, the bloke on the Dole in a council house with no debts has more net value.

It's important that the tax would be set at an appropriately high income level to avoid problems from creating too low an artificial income cap, but that just means finding the right level, not having no such tax.

A graduated introduction of the tax would also allow avoidance of debt paydown problems that may be caused by it.

kevthegaff

Where is the motivation to study hard to get into college, then to invest large amounts of money, time and effort to get a degree, masters or a Phd then go up through the employment ladder to gain a high salary when your taxed to pay the unemployed:mad:

Icepick

waster81 wrote: »

There was no evidence produced that the increase in tax was the only reason these people left

quote where i said it was good

I want them to pay their share even if it was 50% id be happy with that the fact is they dont

Their share? They already pay much more than you.

waster81

Icepick wrote: »

Their share? They already pay much more than you.

The tax rate is 41% they do not pay that I do -

Welease

KyussBishop wrote: »

Now you're even bringing out silly pejoratives here "looney left", and are piling up on ridicule when I have solutions to most of the problems you bring up; what does that add to the discussion?.

As I said this will just go around in circles.. You don't have solutions, you have opinions, and your expectation seems to be that I should be the one to collate the data to disprove your opinions, rather than the usual manner, which is you supply the data to prove your hypothesis..

I have no intention on spending days to disprove a taxation method which I know will fail, even if for the simple fact that its not the first time it has been proposed and (as far as I am aware) it has never seen any form of successful implementation in a modern capitalist society.,..

KyussBishop wrote: »

I've adjusted the extent of the taxes, and the method of which they would be introduced, based on many of the valid problems you bring up; I'm not looking to enter trenches here.

No you didn't.. thats the point you keep ignoring.. You said "good point", gave an opinion (with no data) on how you felt that it could be minimised.. and expect me to supply the data to disprove your opinion..
If you want to prove that this taxation will work, then you need to be the one to understand the complexities and issues that people have raised, and be able to calculate the implications of those issues..

Edit - There are many specific examples in this thread if you read back but let me pick one to show what I mean..

KyussBishop wrote: »

"It's a good point also, that any potential increase in unemployment and whatnot, would need to be factored in here too.".

By this statement alone, I have shown that your initial calculations are flawed (and this was only one of many points made).. So your hypothesis on the benefits of this level of taxation have been demonstated to be false. I have done all I need to do.. I don't need to determine by how much or when or where or how.. I have shown (and you have agreed) that your initial plan is flawed in it's simplicity. If you want to modify your intial plan (which is fine) into a new form of taxation, then its up to you to provide the figures to show how it works.. You cannot just ignore the flaws in the original plan and move on with dataless opinions on implementation extensions and expect others to prove you wrong, your not providing any data with which to determine the quality of the new plan you propose..

(On a personal note.. I hope you don't take my direct points as insults or attacks on you personally.. I know your idea is doomed to failure, but I don't intend to insult you or any personal beliefs you hold)

Farmer Pudsey

Icepick wrote: »

Their share? They already pay much more than you.

How much tax, PRSI and USC will a person on 150K pay in a year

Welease

Farmer Pudsey wrote: »

How much tax, PRSI and USC will a person on 150K pay in a year

150K (single person)
Tax - 54,612
USC - 9,818
PRSI - 5,735

http://taxcalc.ie/

Farmer Pudsey

Welease wrote: »

150K (single person)
Tax - 54,612
USC - 9,818
PRSI - 5,735

http://taxcalc.ie/

So at present his effective tax rate is 45% and on anything he earns on over that he pays 51ish% in tax, PRSI and USC there is little scope to tax him further.

There may be an argument to close loopholes that may be available to them but I cannot see any scope for to increase there tax.

KyussBishop

Welease wrote:

As I said this will just go around in circles.. You don't have solutions, you have opinions, and your expectation seems to be that I should be the one to collate the data to disprove your opinions, rather than the usual manner, which is you supply the data to prove your hypothesis..

If any of us make a claim other than "I don't know", then we need to back up that claim with evidence. That goes for you as much as me; if I have to backup my claims, it doesn't mean your diametrically opposed claims are automatically true until I refute them.

Welease wrote:

I have no intention on spending days to disprove a taxation method which I know will fail, even if for the simple fact that its not the first time it has been proposed and (as far as I am aware) it has never seen any form of successful implementation in a modern capitalist society.,..

Now you're simply making assertions once again, without any backing. The main determinant on whether or not such a tax is feasible is the rate of pay at which is starts; €100k may be low, €275k may even be low but the higher up you go, the more the potential damage is minimized and the better the returns.

For instance, it is well documented that the US had a 90% tax rate above €3 million up to the 70's; this clearly was workable for them, and there's no reason to suggest a tax here starting at that level would not work either (albeit the income from it would be hard to determine, but probably not much).
That puts a definite top-end at which such a tax will work, so it's a matter then of seeing how far down you can set its starting point whilst still remaining feasible.

Maybe my starting points are too low, but the best way to figure that out is to discuss it and see what issues come up.

Welease wrote: »

No you didn't.. thats the point you keep ignoring.. You said "good point", gave an opinion (with no data) on how you felt that it could be minimised.. and expect me to supply the data to disprove your opinion..
If you want to prove that this taxation will work, then you need to be the one to understand the complexities and issues that people have raised, and be able to calculate the implications of those issues..

I have, simply by making the introduction of the tax graduated over a time, you minimize some of the more immediate problems, and by raising the band at which it starts to €275k+ you minimize the people affected (primarily top execs, e.g. 1 or 2 people at most in a company) and thus corporate costs.

This is based on facts previously gathered, and is not merely opinion; this limits the remaining problems you propose.

There are also several claims you have brought up without adequate support; pointing out that they need to be backed up is not flipping the burden of proof.
You are also criticizing me for not factoring in considerations that I have acknowledged, but are impossible to calculate; that makes no sense.

It all goes back down to estimating the likely number of companies and people who would be affected, and what actions they are likely to take (if any), so the primary thing that can be done there is posit arguments that minimize the number of affected people, and minimize their reasons for leaving.

Welease wrote: »

KyussBishop wrote:

"It's a good point also, that any potential increase in unemployment and whatnot, would need to be factored in here too.".

By this statement alone, I have shown that your initial calculations are flawed (and this was only one of many points made).. So your hypothesis on the benefits of this level of taxation have been demonstated to be false. I have done all I need to do.. I don't need to determine by how much or when or where or how.. I have shown (and you have agreed) that your initial plan is flawed in it's simplicity. If you want to modify your intial plan (which is fine) into a new form of taxation, then its up to you to provide the figures to show how it works.. You cannot just ignore the flaws in the original plan and move on with dataless opinions on implementation extensions and expect others to prove you wrong, your not providing any data with which to determine the quality of the new plan you propose..

You're taking one cost that needs to be factored in, and positing that it brings the whole idea down, which is begging the question because it assumes that unemployment will catastrophically increase and will outweigh the benefits from the taxes; that is completely fallacious reasoning, not backed by anything.
You do not know this, and the figures are not possible to calculate; again, what is only possible is to tweak the tax to narrow down the number of affected people, to (indirectly) minimize such damage.

I also have not acknowledged that the plan is flawed, I acknowledged that you made a good point of a factor that needs to be considered; it is a cost (one not calculable), that is all.

Welease wrote:

(On a personal note.. I hope you don't take my direct points as insults or attacks on you personally.. I know your idea is doomed to failure, but I don't intend to insult you or any personal beliefs you hold)

No that's fair enough, I don't think that generally, despite a thing or two that can be read that way. Likewise as well; I'm probably a bit combative in my arguments across politics without realizing it, so if it comes across that way, it's not personal, it's an interesting debate

Good loser

KyussBishop I don't have the patience or stamina shown by Welease in examining your posts.

Thankfully I don't need either as I know from reading his posts that your proposals are absurd.

KyussBishop

Good loser wrote: »

KyussBishop I don't have the patience or stamina shown by Welease in examining your posts.

Thankfully I don't need either as I know from reading his posts that your proposals are absurd.

So you admit complete ignorance, discarding my posts without any stated argument or even making the most minimal effort to read any of them? Stellar contribution to the thread.

Good loser

Oh but they're repeated in his replies, and comprehensively rebutted, which is good enough for me.

Count Dooku

KyussBishop wrote: »

Since you've replied to me on another thread where I advocate a job guarantee, I don't understand where you get that impression; even without that, this line of discussion and the dole don't seem logically connected.

High taxes will kill all growth before jg will be implemented

What has that got to do with it though? Neither of us know the starting level of income of tax exiles, and we certainly don't have enough information to posit that each of them must at least start out at €275k+.

It's a bit of a silly line of argument really.

We know where incomes ends, it allows to assume that most of tax exiles are wealthy
Do you have any facts to contribute?

KyussBishop

Count Dooku wrote: »

High taxes will kill all growth before jg will be implemented

That's kind of begging the question really, as (in the context of your original statement) the effect on jobs depends on where the band starts for the tax, and how high you set it.

Count Dooku wrote: »

We know where incomes ends, it allows to assume that most of tax exiles are wealthy
Do you have any facts to contribute?

That assumption doesn't make any sense; can you explain what "where income ends" means, and how it is logically connected to tax exiles?

Monty Burnz

KyussBishop wrote: »

That's kind of begging the question really, as (in the context of your original statement) the effect on jobs depends on where the band starts for the tax, and how high you set it.


That assumption doesn't make any sense; can you explain what "where income ends" means, and how it is logically connected to tax exiles?

Still making claims with no proof, I see, yet demanding it from others.

KyussBishop

Monty Burnz wrote: »

Still making claims with no proof, I see, yet demanding it from others.

lol, are you standing by that claim then, that all tax exiles must earn at least €275k+?

I don't think you understand how burden of proof works: If you make any claim other than "I don't know", it must be backed with proof.
If someone says "all tax exiles must earn at least €275k+", that must be backed with proof; if I say "you don't know that" or "your stats don't show that", the original statement is not then automatically true until I disprove it.


It's a laughably clear reversal of the burden of proof; by the logic underpinning it, I could say "the world is flat", you could say "no it's not" and then suddenly (by your logic) my original statement becomes automatically true and the burden of proof shifts to you on disproving it.

Monty Burnz

KyussBishop wrote: »

lol, are you standing by that claim then, that all tax exiles must earn at least €275k+?

Another strawman? Don't you get tired of making up both sides of an argument? Your hands must be raw from all that straw wrangling.

KyussBishop

Monty Burnz wrote: »

Another strawman? Don't you get tired of making up both sides of an argument? Your hands must be raw from all that straw wrangling.

Heh, are you actually interested in debating any issues, or are you just here to bash?

If you can point out how (in the post you quoted previously) I have demanded proof where something does not need proving, I'm all ears.

You seem to be backing Count Dooku's argument, but if not, excuse me.

Count Dooku

KyussBishop wrote: »

That assumption doesn't make any sense; can you explain what "where income ends" means, and how it is logically connected to tax exiles?

I mean top end of incomes of tax exiles, like incomes of Dennis O’Brien, JP McManus, Sir Anto O’Reilly etc

ShanePouch

KyussBishop wrote: »

It all goes back down to estimating the likely number of companies and people who would be affected, and what actions they are likely to take (if any), )

You don't have to speculate at all as there are plenty of examples of Irish people who have left Ireland due to the relatively high tax rates in Ireland already.

Your proposals would accelerate that exodus, as even higher taxes make leaving more attractive for those who are left behind.

It's always easy to shout "tax the rich" until you then realise its often the rich who provide the jobs for the rest of us, and who are already paying the bulk of income tax. Its often "the rich" who are also most mobile and more willing to leave high tax economies, after which the economy gets zero from them, and the result of such policies as you propose result in a lower tax take.

BFDCH.

ResearchWill wrote: »

I read recently need to find it again, that less than 12,000 people in this state pay 18% of the income tax collected. That scarry.

http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax/

how the **** does this work?

'Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.'
'he median earner, earning about €25,000, paid just 4% in income tax!'

i don't earn half of that and I pay 51% tax.

ResearchWill

BFDCH. wrote: »

how the **** does this work?

'Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.'
'he median earner, earning about €25,000, paid just 4% in income tax!'

i don't earn half of that and I pay 51% tax.

The top rate and actual tax paid are always different. Say €50,000 no deductions except the standard will pay €10,312 income tax €1,736 PRSI and €2,819 USC. So even added together it's not 51% of €50,000 the income tax element is 20.6% with all the other taxes it's 30%. By adding in rent relief, VHI and charitable donations doctors visits that % can be further reduced.

BFDCH.

ResearchWill wrote: »

The top rate and actual tax paid are always different. Say €50,000 no deductions except the standard will pay €10,312 income tax €1,736 PRSI and €2,819 USC. So even added together it's not 51% of €50,000 the income tax element is 20.6% with all the other taxes it's 30%. By adding in rent relief, VHI and charitable donations doctors visits that % can be further reduced.

really? i need to start adding those other things because i'vfe seen what leaves my pay check and it's definitely 51% or ever few months

ResearchWill

BFDCH. wrote: »

really? i need to start adding those other things because i'vfe seen what leaves my pay check and it's definitely 51% or ever few months

So yo are saying if for example you earn €50,000 per year you pay in excess of €25,000 in income tax.

OMD

BFDCH. wrote: »

really? i need to start adding those other things because i'vfe seen what leaves my pay check and it's definitely 51% or ever few months

You are only paying 51% on a portion of your income.
What is your yearly pretax income?
What is your yearly after tax income?
The difference is the tax you pay. Divide that by your pre-tax income, multiply by 100 and that is the percentage tax you are paying (as long as you include PRSI as tax)

Geuze

BFDCH. wrote: »

really? i need to start adding those other things because i'vfe seen what leaves my pay check and it's definitely 51% or ever few months

Nobody in Irl pays 51% of their income on tax.

Even including USC and PRSI, it's extremely unlikely.

KyussBishop

ShanePouch wrote: »

You don't have to speculate at all as there are plenty of examples of Irish people who have left Ireland due to the relatively high tax rates in Ireland already.

Your proposals would accelerate that exodus, as even higher taxes make leaving more attractive for those who are left behind.

It's always easy to shout "tax the rich" until you then realise its often the rich who provide the jobs for the rest of us, and who are already paying the bulk of income tax. Its often "the rich" who are also most mobile and more willing to leave high tax economies, after which the economy gets zero from them, and the result of such policies as you propose result in a lower tax take.

It's not about taxing 'the rich', it's about taxing high earners, and balancing the costs of people/companies who may leave against the returns in taxes.

It's already known some people will leave, what is not known is the tax band and rate that will provide an adequate balance, or the one that will tip the balance.

ShanePouch

KyussBishop wrote: »

It's not about taxing 'the rich', it's about taxing high earners, and balancing the costs of people/companies who may leave against the returns in taxes.

It's already known some people will leave, what is not known is the tax band and rate that will provide an adequate balance, or the one that will tip the balance.

Can you tell us some countries around the world who have done this who you admire, and what the ultimate outcome was for their tax take?

What if, as has happened elsewhere, the higher income taxes result in a lower tax take precisely because many of the higher paid leave the economy?

The higher paid are usually those responsible for employing others, by the way, and it's also known as the "brain drain".

Your proposals have not been thought through, and are merely copies of the old socialist policies of envy, where "the rich" are responsible for everything, and the must be made pay even it it means they are chased from the country, taking their riches with them which may include factories and businessess and investments in ireland.

The Corinthian

Taxing obscene levels of income is a necessity in a World where the gap between rich and poor is widening. However there is a price to this that seems to be largely overlooked here.

To begin with there appears to be far too much emphasis on the 'super rich'. Far too often examples given are of those earning hundred of thousands of Euro, if not millions or billions and in reality the threshold for being considered 'rich' is often much lower than that.

Indeed, the 'super rich' are going to be able to avoid such taxes anyway. Residency is a bureaucratic concept for them; in reality they're out of the country much of the year anyway, so changing residency or even nationality isn't a big deal. And they've people on retainer, or staff, who's job is to decrease their tax bill, so they're going to be ahead of the curve no matter what.

Once you're on over €100k, you already begin to fall into this category in Ireland. They're the ones who tend to get hit by such taxes, rather than the 'super rich'. That's actually quite a few people, BTW, many of whom are entrepreneurs and professionals.

Last week an old friend of mine, an engineer who's on over €100k, decided to emigrate. Various factors were at play, but ultimately the tax he was paying on his income was such that he could no longer really keep up with mortgage payments. So he secured a job in Oman, where not only will he be able to pay for his mortgage back home, but also set up a new home. He's not alone.

In other cases, they're just unlucky to be lucky. For example, one of my cousins in Italy wrote a successful mobile app. This is his hobby, as his day job is being a developer on a modest salary. However, under similar 'taxing the rich' laws, his income from the app is taxed at 50% because it is considered a second income, then on top of it additional taxes and charges are levied. Earning a net of 20% of the total revenue from his app, he eventually decided to open a company abroad to run his revenue through and now the Italian government gets nothing. He too will likely emigrate before long.

This is something you used to see in communist countries, as well as today in countries that place high taxes on higher earners. Norway and Sweden have serious problems convincing entrepreneurs to set up companies, and even if they do, to stay if those companies are successful. When the old DDR collapsed and reunified with West Germany, one major problem was that they had too few professionals - after all, why waste a few years earning nothing in university, when all you'll get is much the same salary as a factory worker who could start earning straight after school?

Few of these 'rich' are millionaires (if they are it's typically only on paper, such as the value of their company or house). They're well off, even 'rich', but like it or not society needs them; not only for their income tax, but also for the skills they possess and jobs they create. It may be a small number of people who'll leave as a result, but that small number is a much larger part of a small group to begin with and the economy does feel this brain drain before long - look at the medical profession; Irish graduates have been leaving in droves for greener pastures, long before the crisis, for better pay and opportunities, forcing us to import medical staff from abroad.

And it's a pretty difficult group to replace too; a factory worker is a lot easier to replace than an entrepreneur or engineer - if they weren't, factory workers would get paid more.

So taxing the 'rich' may be necessary at this stage. It may also be morally justified. But there's a price to pay when you do, and if you push things too far, they will vote with their feet and leave their country worse off for it.

ShanePouch

[ QUOTE=The Corinthian;80840726]Taxing obscene levels of income is a necessity in a World where the gap between rich and poor is widening.[/QUOTE]

The gap is not the issue. Even in years of plenty in Ireland, many invoked the gap between the rich and poor getting wider as a “bad” thing. If the rich are getting richer at a faster rate than the poor are getting “richer” then that’s a good thing, as everyone’s standard of living rises.

If a country decidesto tax the rich into leaving, the gap between the average rich person and the average poor person may well reduce, but no on can seriously claim that’s a benefit to anyone involved, nor a benefit to the overall economy.

QUOTE=The Corinthian;80840726]
To begin with there appears to be far too much emphasis on the 'super rich'. Far too often examples given are of those earning hundred of thousands of Euro, if not millions or billions and in reality the threshold for being considered 'rich' is often much lower than that.

Indeed, the 'super rich' are going to be able to avoid such taxes anyway. Residency is a bureaucratic concept for them; in reality they're out of the country much of the year anyway, so changing residency or even nationality isn't a big deal. And they've people on retainer, or staff, who's job is to decrease their tax bill, so they're going to be ahead of the curve no matter what.

[/QUOTE]

That’s a valuable point, and many of Irelands truly rich can afford good tax planning and advice which becomes more valuable the more tax they are liable to pay, and many will simply arrange their affairs to avoid paying it, even if this means they will move abroad for tax reasons. So Ireland Inc actually loses 100% of the tax they were previously paying, plus all the extra potential tax into the future.

Higher income taxes on “the rich” are more likely to be counterproductive, quite apart from reducing the incentive to work hard and make money.

It’s no coincidence one of the most successful countries in the world, the USA, has low taxes for the rich, and that many African countries are poor because taxes are so high that no one can afford to invest capital there and build factories etc.

Tax policy is more complicated than just “soak the rich”, and the ramifications for society go far beyond just they rich, many of whom will simply leave anyhow.