Kerrigan: Rich have been left alone for too long

Manco

Some common sense from one of the Sindo's few sane columnists. Hayes's kite-flying comments are looking increasingly out of step. http://www.independent.ie/opinion/columnists/gene-kerrigan/gene-kerrigan-rich-have-been-left-alone-for-too-long-3230006.html

woodoo

Yes the rich have been left alone and i would love to see them taxed a little more. But the really rich can now move their wealth wherever they want. The days of being able to tax people at 90% are long gone.

There must be a way to get the super rich to pay more. We live in hope.

I don't subscribe to the notion that all the pensioners are vulnerable and should be left alone. They should face a moderate cut like the rest of us, 5% or so. And some of the free stuff should be taken off the rich pensioners. I'd love to see the semi states face a cut too. They have rode this recession on the pigs back. No paycut no pension levy nothing.

Diarmuid

So according to Gene if you are paying marginal tax rate, you're rich

"marginal tax rate is 52 per cent".

Aw, gee. Those poor rich guys.

And he points to the US as a example of how to do it

By 1945, it was 94 per cent. And, you know what it was on top incomes through the 1950s and right up to 1964? Around 90 per cent"

Earn more than €36,000? Welcome to your future tax rate if Gene has his way. I, and my job, will be on a plane to some nice sunny country if that happens.

hidinginthebush

This is a notion that has always confused me. I'm far from being one of "the rich", but I've never seen why they should be get the bejaysus taxed out of them. Sure, they earn more, but why does that mean they should have to hand 60, 70, 90% of their hard earned cash over to the government just for doing well for themselves?

While I can see the reasoning behind encouraging lower tax rates for people on lower incomes, the astronomical tax rates proposed for high earners just never made sense to me. Can someone tell me why this is a good / necessary thing?

I know that my question might come across as ignorant/ childish. but I've never understood why the rich should have some social obligation to give an awful lot of their money to the government purely because they are rich.

avalon68

I feel that more people need to pay tax, not that people need to pay more tax. Just plucking numbers out of the air, but lets assume you take 20% of someones income in tax - then the person that earns 100,000 is still paying a lot more than the person that earns 40,000. The person on 100,000 can probably afford to pay more - but do they get anything extra in return for that? No....and as has been mentioned, they are far more mobile.

goose2005

hidinginthebush wrote: »

This is a notion that has always confused me. I'm far from being one of "the rich", but I've never seen why they should be get the bejaysus taxed out of them. Sure, they earn more, but why does that mean they should have to hand 60, 70, 90% of their hard earned cash over to the government just for doing well for themselves?

While I can see the reasoning behind encouraging lower tax rates for people on lower incomes, the astronomical tax rates proposed for high earners just never made sense to me. Can someone tell me why this is a good / necessary thing?

I know that my question might come across as ignorant/ childish. but I've never understood why the rich should have some social obligation to give an awful lot of their money to the government purely because they are rich.

Because we're living in a society?

Count Dooku

goose2005 wrote: »

Because we're living in a society?

"there is no such thing as society"(c)

KyussBishop

hidinginthebush wrote: »

This is a notion that has always confused me. I'm far from being one of "the rich", but I've never seen why they should be get the bejaysus taxed out of them. Sure, they earn more, but why does that mean they should have to hand 60, 70, 90% of their hard earned cash over to the government just for doing well for themselves?

While I can see the reasoning behind encouraging lower tax rates for people on lower incomes, the astronomical tax rates proposed for high earners just never made sense to me. Can someone tell me why this is a good / necessary thing?

I know that my question might come across as ignorant/ childish. but I've never understood why the rich should have some social obligation to give an awful lot of their money to the government purely because they are rich.

There are multiple reasons for it really; one is that they have a lot more income which is discretionary, thus is more justifiable to tax, another is that a lot of their earnings aren't commensurate with the benefit they provide to society.

If someone is earnings millions a year, what exact benefits are they providing to society that justify a wage up to 20x that of an average worker?

It is the case that a lot of wages (past a certain, hard-to-define, point) are excessive, particularly within the non-meritocratic hierarchy of most corporations, and a lot of unethical practices and corporate corruption are associated with obtaining such wages (just look at the state of the financial industry), so if you tax the shít out of them past a point, you dissuade a lot of those practices as well.


There's a lot more to arguments in favour of it as well, but those are some off the top of my head. It is very important though, not to set the tax bands too low, and to avoid punishing genuinely beneficial behaviour, where high payments are justified.

It is a good question, which probably doesn't get discussed enough.

Supermensch

hidinginthebush wrote: »

This is a notion that has always confused me. I'm far from being one of "the rich", but I've never seen why they should be get the bejaysus taxed out of them. Sure, they earn more, but why does that mean they should have to hand 60, 70, 90% of their hard earned cash over to the government just for doing well for themselves?

While I can see the reasoning behind encouraging lower tax rates for people on lower incomes, the astronomical tax rates proposed for high earners just never made sense to me. Can someone tell me why this is a good / necessary thing?

I know that my question might come across as ignorant/ childish. but I've never understood why the rich should have some social obligation to give an awful lot of their money to the government purely because they are rich.

There is no reasonable justification for higher taxation for high earners from an ethical stand point, which is the angle a lot of people try to come from. The only justification for higher taxes is that the government needs money, and the wealthy have more money that the less wealthy. Which is an arguably valid justification, don't get me wrong.

If we were to look at the arguments posed by KyussBishop (and I'm not attacking you or anything, I just like a good debate :P ). The first point made is that the higher wages earned by high-earners is of no benefit to society. Ignoring the non-essential markets created by disposable income (off the top of my head, jewelry and restaurants), the question that has to be asked is what obligation those who earn high-wages have to fund society. As for there wage being justified, really that's irrelevant. A company can pay someone millions to pick their nose, so long as it isn't my money that's being spent (as in, if a civil servant was being paid millions to pick his or her nose) I don't mind, and moreover it's none of my concern, and my opinion on the matter would be inconsequential.

As for the second point, this argument assumes that most high wages are gained from corruption, and that the most efficient way of dealing with this is through taking this 'dirty' money off of the corrupt. Where this falls down is it punishes those who earn a high wage from being hard working, or from having an esoteric skill, or from being in someway entrepreneurial, simply because corporate regulations are not efficient enough at preventing corruption, thus discouraging pretty much the driving force of this capitalist society of ours. I'm not saying capitalism is the only way to organise society, I'm not even saying that it's a terribly good way to run society, but if we are to keep instated our current economic model, we cannot argue that higher taxation will cure the ails of corporate corruption while simultaneously being of no detriment to entrepreneurship. In short, you cannot have you're cake and eat it.

tl;dr: The only argument for higher tax is that the government needs money, which is a perfectly valid reason. There is nothing intrinsically wrong or heinous about being rich.

KyussBishop

Supermensch wrote: »

The first point made is that the higher wages earned by high-earners is of no benefit to society.

Well not quite More that it's not necessarily proportional.

Supermensch wrote: »

As for there wage being justified, really that's irrelevant. A company can pay someone millions to pick their nose, so long as it isn't my money that's being spent (as in, if a civil servant was being paid millions to pick his or her nose) I don't mind, and moreover it's none of my concern, and my opinion on the matter would be inconsequential.

It depends on how you look at it I guess (specifically, how you view money); in the end, what money comes down to is it is societies debt to the person holding that money.

So, if a person is earning a significantly larger amount of money than everyone else, it is worthwhile asking if the debt society then owes to him, is proportional to the benefits he provides to society in his work.

Supermensch wrote: »

As for the second point, this argument assumes that most high wages are gained from corruption, and that the most efficient way of dealing with this is through taking this 'dirty' money off of the corrupt. Where this falls down is it punishes those who earn a high wage from being hard working, or from having an esoteric skill, or from being in someway entrepreneurial, simply because corporate regulations are not efficient enough at preventing corruption, thus discouraging pretty much the driving force of this capitalist society of ours. I'm not saying capitalism is the only way to organise society, I'm not even saying that it's a terribly good way to run society, but if we are to keep instated our current economic model, we cannot argue that higher taxation will cure the ails of corporate corruption while simultaneously being of no detriment to entrepreneurship. In short, you cannot have you're cake and eat it.

You're definitely right that it's wrong to assume most wages come from corruption, and so it would be better to tackle the causes of the corrupt income instead, through laws/regulations.
Some of the unethical practices netting money though, can't easily be tackled through strictly-defined laws, so I think extra dissuasion's against these practices from high taxes (reducing the reward/incentive from them) is justified too.

It is important though, to accurately determine at what income brackets these unethical/corrupt practices become dominant; it is also important to balance out the potential impact on genuinely hard-earned profits, against the potential harm to society from incentivizing the unethical/corrupt practices.


So yes, good points all-round These are all pretty important things to consider when implementing a high-earnings tax.

PeadarCo

KyussBishop wrote: »

It is important though, to accurately determine at what income brackets these unethical/corrupt practices become dominant; it is also important to balance out the potential impact on genuinely hard-earned profits, against the potential harm to society from incentivizing the unethical/corrupt practices.

Is that not just assuming that only the rich are potentially corrupt. It can happen at all levels. For example a person on the dole my be doing jobs on the side and not declaring that income. That is corrupt behaviour and may potentially account for over half a persons income meaning it would dominant for that particular person even though they would not be rich.

Surely the opportunity for corruption exists at all levels of society. Taxation is about raising money for the services the public wants/is prepared to pay the government to operate not dealing with corruption. Laws that promote openness and accountability and are properly enforced are the way to deal with corruption.

Manach

The monies raised is to support the state, which historically is a entity aside from society. Extra monies go to buying off the plebian orders and ensuring that their supporters are rewarded. Has been so since the time of Caesars and continues to be so today.

Supermensch

KyussBishop wrote: »

Well not quite More that it's not necessarily proportional.


It depends on how you look at it I guess (specifically, how you view money); in the end, what money comes down to is it is societies debt to the person holding that money.

So, if a person is earning a significantly larger amount of money than everyone else, it is worthwhile asking if the debt society then owes to him, is proportional to the benefits he provides to society in his work.


You're definitely right that it's wrong to assume most wages come from corruption, and so it would be better to tackle the causes of the corrupt income instead, through laws/regulations.
Some of the unethical practices netting money though, can't easily be tackled through strictly-defined laws, so I think extra dissuasion's against these practices from high taxes (reducing the reward/incentive from them) is justified too.

It is important though, to accurately determine at what income brackets these unethical/corrupt practices become dominant; it is also important to balance out the potential impact on genuinely hard-earned profits, against the potential harm to society from incentivizing the unethical/corrupt practices.


So yes, good points all-round These are all pretty important things to consider when implementing a high-earnings tax.

I think, regardless of the ideal, we're both overall of the same opinion that money should more efficiently be directed to the greater betterment of society

Eod100

In the Irish Times article Kerrigan is referring to, Brian Hayes also states that “It’s not sustainable in my view that nearly 50 per cent of all kids going to college at the moment are getting a grant.” Source: http://www.irishtimes.com/newspaper/frontpage/2012/0915/1224324050036.html

I would be very interested to know where he sourced this figure from. To be honest I'd be very surprised if this was true. Anyone know where he might've got it from? I've tried the HEA, Department of Education and Dept. of Finance's websites to no avail. Perhaps it's just not publicly available?

KyussBishop

PeadarCo wrote: »

Is that not just assuming that only the rich are potentially corrupt. It can happen at all levels. For example a person on the dole my be doing jobs on the side and not declaring that income. That is corrupt behaviour and may potentially account for over half a persons income meaning it would dominant for that particular person even though they would not be rich.

Surely the opportunity for corruption exists at all levels of society. Taxation is about raising money for the services the public wants/is prepared to pay the government to operate not dealing with corruption. Laws that promote openness and accountability and are properly enforced are the way to deal with corruption.

It really depends on whether the unethical behaviour can be covered by laws/regulation, as some of it simply can't.

If you take solely, the situation where a company executive drives a company towards high short-term profits (and the litany of ethically-questionable practices that might encourage), in order to please stockholders/investors, so they will reward those execs with higher pay and bonuses, there are limited options you can take.

I'm not sure it's possible to regulate such practices, or to specifically disincentivize them, so the use of a wide-ranging high-income tax may be justifiable to target that, past a certain point of income.
That is not necessarily an instance of corruption either, so it wouldn't be assuming all high-earners (distinguishing from rich here, since it's more about income) are corrupt, it would be attempting to disincentivize potentially unethical behaviour.

You want to do this while affecting as few genuinely ethical and innocent people as possible though, so the income level at which the disincentive would begin, would need to be appropriately high to minimize affected people (even if proportionally, percentage wise, a lot of innocent people may still be affected at that tax band).

Supermensch wrote: »

I think, regardless of the ideal, we're both overall of the same opinion that money should more efficiently be directed to the greater betterment of society

Indeed I guess to sum-up my take on tax, is I'm also advocating using it to disincentivize potentially undesirable behaviour, which goes beyond this somewhat and is far more debatable.

Farmer Pudsey

At present a single person earning 150K pay's 45% of there income in tax,USC and PRSI and any money earned above that is at 52%. Now if you tax them at a higher rate at what rate should it be. When a worker (in this case a well paid worker) sees over half there money going in tax and there is also a perception that they should receive no other transfers from the state such as CB and be made pay 3rd level fees and also we have no medical benefit package for workers that is available in other EU countries.. How long is it before we also force them to contribute towards primary and post primary education and also refuse them the OAP.

In the state we are developing a section of society that are being looked after from cradle to grave but people who work and save will receive nothing from the state. In it last few submissions on Ireland the trioka seem to be adapting this strategy as well encouraging the means testing of CB and the elimination of the difference between contributory and non contributory pensions.

If we do raise marginal rates of tax to 65% or greater then a high earner will be more likely to move abroad ( all of them will not). Micheal O'Leary could run Ryan Air from any other country and companies like Kerry Group and Glanbia could be ran from anywhere in the world.

You see at a marginal rate of 52% it is quite possible if earning 500K it may be worth 100K to go abroad but at a marginal rate of 70% suddenly it becomes worth 200K to move abroad even for a person earning 250K it may well be worth 80-90K to go abroad.

It would also encourage wealthy pensioners to move to sunnier climates. I would have no ideological issues with what Gene Kerrigan is proposing however it would be unlikely to work. Also there is no way a sole trader would pay a marginal rate of 70% the black economy would become widespread as cash would be king.

Godge

KyussBishop wrote: »

There are multiple reasons for it really; one is that they have a lot more income which is discretionary, thus is more justifiable to tax, another is that a lot of their earnings aren't commensurate with the benefit they provide to society.

If someone is earnings millions a year, what exact benefits are they providing to society that justify a wage up to 20x that of an average worker?

It is the case that a lot of wages (past a certain, hard-to-define, point) are excessive, particularly within the non-meritocratic hierarchy of most corporations, and a lot of unethical practices and corporate corruption are associated with obtaining such wages (just look at the state of the financial industry), so if you tax the shít out of them past a point, you dissuade a lot of those practices as well.


There's a lot more to arguments in favour of it as well, but those are some off the top of my head. It is very important though, not to set the tax bands too low, and to avoid punishing genuinely beneficial behaviour, where high payments are justified.

It is a good question, which probably doesn't get discussed enough.

Your main point is that earnings should be commensurate with the benefit provided to society.

Now let us extend that analogy downwards. It makes a compelling argument for cuts in social welfare to ensure that anyone working and providing a benefit to society with the sweat of their work should be better off than
someone on welfare who is not contributing anything.

woodoo

Farmer Pudsey wrote: »

In the state we are developing a section of society that are being looked after from cradle to grave but people who work and save will receive nothing from the state.

The class of society that haven't worked in many years and some that have probably never worked should be on an absolute basic rate of dole. Basics such as a roof over their head, basic medical care and enough food is all they should be entitled to. No more than €100 per week and basic accommodation. Why are they endlessly getting the same as people who have worked, contributed and lost their job.

KyussBishop

Godge wrote: »

Your main point is that earnings should be commensurate with the benefit provided to society.

Now let us extend that analogy downwards. It makes a compelling argument for cuts in social welfare to ensure that anyone working and providing a benefit to society with the sweat of their work should be better off than
someone on welfare who is not contributing anything.

Social Welfare is based on completely separate ideological roots to those used to justify taxation on high-earners; although I do totally advocate that those on social welfare, be put back into a position where they benefit society as soon as possible (I've much discussed a job guarantee as of late, but am not sold on that idea).

Though that doesn't mean I support cutting people off welfare while it's their only potential income; again, the reasons for it (welfare) have completely separate ideological roots to high-income taxation.

Good loser

I find Gene Kerrigan's articles invariably, and this week's egregiously, to be economically and politically directed at the whingers and begrudgers in Irish society.

Nothing constructive but specious and tendentious in the extreme.

As a public service pensioner I agree with Brian Hayes's views and found nothing in GK's piece to vary my position. Further I can see no reason whatsoever why all pensions are not cut by 5% in the budget.
There is no reasoning worth talking about in the article to rebut in detail.

The public pensions currently paid are merely a result of FF's largesse with cash from the construction boom - no science whatsoever involved in their design.

Eod100

I don't think Hayes said anything that radical re wealthy pensioners. A lot of the various responses I've read have simply fixated on the pensioners part and not the wealthy pensioners that Hayes mentioned.

I don't think every person should get free travel, free tv license etc. just because they've reached a certain age. This shouldn't be a universal right but should be means-tested so that those who need it get it and those who are well off can do without.

But at the same time, I'd like to see a reduction in the wages we're paying T.D's circa €90,000 with many claiming expenses of circa €40,000 every year on top of this (http://www.thejournal.ie/this-is-how-much-your-td-claimed-in-expenses-in-2011-344683-Feb2012/).

Also, look at all the expenses public servants are entitled to. The government is doing very little to tackle this €1.5 billion bill and is likely to only impose cuts on new entrants to the job. The only allowance cut that may effect current staff is the private sectaries one (whereby a private secretary will receive half of €20,685 or €24,427 for the rest of their career - on top of their basic salary - if they've served in the post for over a year. That this existed at all is farcical but even more farcical still is the fact that the government won't tackle this bill in any meaningful way!

jetfiremuck

woodoo wrote: »

The class of society that haven't worked in many years and some that have probably never worked should be on an absolute basic rate of dole. Basics such as a roof over their head, basic medical care and enough food is all they should be entitled to. No more than €100 per week and basic accommodation. Why are they endlessly getting the same as people who have worked, contributed and lost their job.

Thats why the word entitlement has created this huge divide in Irish society.....that able bodied people can sit on their arses and await a handout without any sense of conscience creates the begrudging mindset against those that are making the effort. Charging the wealthy more WILL not improve the standard of living of anyone .Does anyone know any person on the dole who is employing anyone??? If not who is employing who.ffs

jetfiremuck

KyussBishop wrote: »

Social Welfare is based on completely separate ideological roots to those used to justify taxation on high-earners; although I do totally advocate that those on social welfare, be put back into a position where they benefit society as soon as possible (I've much discussed a job guarantee as of late, but am not sold on that idea).

Though that doesn't mean I support cutting people off welfare while it's their only potential income; again, the reasons for it (welfare) have completely separate ideological roots to high-income taxation.

Its not income their getting its a handout. Income is derived!!!!

johnnyskeleton

People have to get away from concepts of fair or unfair because these are largely subjective.

put another way, if we had to introduce a third band of tax and it transpired that a rate of 30% over 200k generated more money for the state than a rate of 60%, then surely, even if you think it is unfair that the marginal rate for someone on 150k beig less than someone on 200k+ is unfair, would you really stand on ceremony and put in the higher rate? That would be to cut off your nose to spite your face.

So really shouldn't it be looked at from the point of what will actually serve the state best? Ask not what your country can do for you etc.

avalon68

johnnyskeleton wrote: »

So really shouldn't it be looked at from the point of what will actually serve the state best? Ask not what your country can do for you etc.

I think you will find that people who feel screwed over wont tend to think like that - rather in this age of global workplaces, they will head for greener fields where taxes actually come back in the form of services.....or at the very least the weather is better! What benefits do high tax payers currently get for living in Ireland? A health care service thats falling apart, a failing education system, unelected unions dictating how the country is run, goods such as cars and electronics costing a fortune relative to other countries....realistically, if it came down to it, Im sure a lot of people would up and leave. The last few years have shown us how easy it is for people with minimal resources/unemployed to migrate and start new lives all over the world - it would be infinitely easier for people with money to do this. Not all of them would leave, but if even half left, the country would be screwed as they already pay the majority of tax.

PeadarCo

KyussBishop wrote: »

It really depends on whether the unethical behaviour can be covered by laws/regulation, as some of it simply can't.

If you take solely, the situation where a company executive drives a company towards high short-term profits (and the litany of ethically-questionable practices that might encourage), in order to please stockholders/investors, so they will reward those execs with higher pay and bonuses, there are limited options you can take.

I'm not sure it's possible to regulate such practices, or to specifically disincentivize them, so the use of a wide-ranging high-income tax may be justifiable to target that, past a certain point of income.
That is not necessarily an instance of corruption either, so it wouldn't be assuming all high-earners (distinguishing from rich here, since it's more about income) are corrupt, it would be attempting to disincentivize potentially unethical behaviour.

You want to do this while affecting as few genuinely ethical and innocent people as possible though, so the income level at which the disincentive would begin, would need to be appropriately high to minimize affected people (even if proportionally, percentage wise, a lot of innocent people may still be affected at that tax band).

All of that assummes that only high earners are corrupt and that the majority of them are(No point punishing the majority if only a minority are the problem). Its possible to be corrupt even if you are a relatively poor person. "ethically-questionable practices" can happen at all levels from a person living on the dole to billionaires. High tax's can potentially encourage this by increasing the return on avoiding tax.

I assume you have evidence that suggests only high earners are corrupt and that taxation is an effective tool in combating this.

p1akuw47h5r3it

Eod100 wrote: »

In the Irish Times article Kerrigan is referring to, Brian Hayes also states that “It’s not sustainable in my view that nearly 50 per cent of all kids going to college at the moment are getting a grant.” Source: http://www.irishtimes.com/newspaper/frontpage/201u2/0915/1224324050036.html

I would be very interested to know where he sourced this figure from. To be honest I'd be very surprised if this was true. Anyone know where he might've got it from? I've tried the HEA, Department of Education and Dept. of Finance's websites to no avail. Perhaps it's just not publicly available?

http://www.hea.ie/files/files/file/statistics/50137%20HEA%20Eurostudent%20Survey%20IV%2009-10%20final.pdf

Look at the graph on Pg 30. I'm not sure if this just relates to Master's and PHD's though, as I was always under the impression that around 50%-60% of undergraduates, at least, receive grants. I was told this by an SU member in TCD. I could also back up this claim through circumstantial evidence. I know a large number of people who receive grants, more people who do then don't.

Eod100

DanDan6592 wrote: »

http://www.hea.ie/files/files/file/statistics/50137%20HEA%20Eurostudent%20Survey%20IV%2009-10%20final.pdf

Look at the graph on Pg 30. I'm not sure if this just relates to Master's and PHD's though, as I was always under the impression that around 50%-60% of undergraduates, at least, receive grants. I was told this by an SU member in TCD. I could also back up this claim through circumstantial evidence. I know a large number of people who receive grants, more people who do then don't.

Maybe it's true but I just find it very hard to believe that 50% of students are getting grants.. I'd be the opposite - I know very few people receiving grants but maybe it's just a case that people don't go around telling everyone that they do.

I guess Hayes doesn't make it very clear what students he's referring to. Does he mean all undergraduate students? Does he mean students attending colleges only (as opposed to institutes of technology/other third level institutions)? Does he mean all students (both undergraduate and postgraduate)?

Geuze

The rich do need to pay more tax.

But not by increasing the MTR.

Already, at approx 35k, the MTR is 52%. That is way too high.

The solution is less tax incentives / reliefs, etc., not higher rates.

Eod100

Just another point on the statement that ''nearly 50 per cent of all kids going to college at the moment are getting a grant.'' Perhaps Hayes confused this with figures which show that ''close to 50 per cent of all self-employed people secure a college grant for their sons or daughters'' which obviously does not equate to 50 per cent of all kids going to college receiving a grant..

Finnbar01

We don't have a taxing problem in this country but a spending problem.

KyussBishop

PeadarCo wrote: »

All of that assummes that only high earners are corrupt and that the majority of them are(No point punishing the majority if only a minority are the problem). Its possible to be corrupt even if you are a relatively poor person. "ethically-questionable practices" can happen at all levels from a person living on the dole to billionaires. High tax's can potentially encourage this by increasing the return on avoiding tax.

I assume you have evidence that suggests only high earners are corrupt and that taxation is an effective tool in combating this.

No it's not assuming only high earners are corrupt, you're creating a straw man there; I explicitly said in my previous post it's about limiting harm to a greater number of innocent people by setting the starting band high.

I stated also that it's not fully about outright corruption either; you don't appear to have fully taken in my previous post, or are deliberately ignoring parts of it, as I made this very clear.

PeadarCo

KyussBishop wrote: »

No it's not assuming only high earners are corrupt, you're creating a straw man there; I explicitly said in my previous post it's about limiting harm to a greater number of innocent people by setting the starting band high.

I stated also that it's not fully about outright corruption either; you don't appear to have fully taken in my previous post, or are deliberately ignoring parts of it, as I made this very clear.

I appreciate you say its not about corruption/unethical behaviour but I honestly don't see where you make another argument. From my perspective the argument you are putting forward is that higher taxes on rich people would essentially protect the majority from a minority of corrupt rich people.
For that to effective the majority of rich people/target group must be engaged or benefit from corrupt/unethical behaviour. Feel free to correct me.

KyussBishop

PeadarCo wrote: »

I appreciate you say its not about corruption/unethical behaviour but I honestly don't see where you make another argument. From my perspective the argument you are putting forward is that higher taxes on rich people would essentially protect the majority from a minority of corrupt rich people.
For that to effective the majority of rich people/target group must be engaged or benefit from corrupt/unethical behaviour. Feel free to correct me.

It's less outright corruption, more unethical behaviour that can't be directly legislated against; stuff that you want to disincentivize like the previous mentioned dynamic between corporate execs and stockholders.

Lets say you set the tax band as high as €3 million, and you know that a significant percentage of people earning that and above have done so ethically; it would then become a matter of setting the tax at a balance, enough to dissuade earnings past a certain point which in turn dissuades the unethical practices, while also trying to mitigate harm to ethical earners and potential economic harm overall.

It is a blunt tool, but when you couple the various justifications regarding unethical earnings, with the separate justification that earnings past a point are not proportional with what the person adds to society, then a high tax at that point becomes justifiable.
This does not require the majority of people in this group to be engaging in unethical practices.

This all would have to be balanced against any economic harm it may cause, tweaking the tax so it provides more return than loss.
Note also that I'm talking about high-income earners here, not 'rich' people who already have a lot of money to invest.

PeadarCo

KyussBishop wrote: »

It's less outright corruption, more unethical behaviour that can't be directly legislated against; stuff that you want to disincentivize like the previous mentioned dynamic between corporate execs and stockholders.

Lets say you set the tax band as high as €3 million, and you know that a significant percentage of people earning that and above have done so ethically; it would then become a matter of setting the tax at a balance, enough to dissuade earnings past a certain point which in turn dissuades the unethical practices, while also trying to mitigate harm to ethical earners and potential economic harm overall.

It is a blunt tool, but when you couple the various justifications regarding unethical earnings, with the separate justification that earnings past a point are not proportional with what the person adds to society, then a high tax at that point becomes justifiable.
This does not require the majority of people in this group to be engaging in unethical practices.

This all would have to be balanced against any economic harm it may cause, tweaking the tax so it provides more return than loss.
Note also that I'm talking about high-income earners here, not 'rich' people who already have a lot of money to invest.

The problem with this idea is that it would be a waste of Dail time which could be better spent on doing other things. Anyone who earns anything near 3 million will have no problem relocating abroad. The risks to the general public from what would ultimately be destructive reward polices would still exist. The same rewards could be availed of within another jurisdiction and any bad decisions that are directly attributable to these polices would still happen. The public would still be at risk and will have lost the taxes associated with that job.

Also what a person adds to society is entirely subjective. A person earning 3 million plus I can imagine would have no problem justifying this wage in terms of their overall contribution to society. Whether anyone else agree is a separate issue.

Icepick

It's rather ironic how obsessed socialists are with wealth, other people's wealth that is. Their only ''solution'' is to take money from people who don't vote them.

KyussBishop

PeadarCo wrote: »

The problem with this idea is that it would be a waste of Dail time which could be better spent on doing other things. Anyone who earns anything near 3 million will have no problem relocating abroad. The risks to the general public from what would ultimately be destructive reward polices would still exist. The same rewards could be availed of within another jurisdiction and any bad decisions that are directly attributable to these polices would still happen. The public would still be at risk and will have lost the taxes associated with that job.

Also what a person adds to society is entirely subjective. A person earning 3 million plus I can imagine would have no problem justifying this wage in terms of their overall contribution to society. Whether anyone else agree is a separate issue.

Saying it's a waste of Dail time thus shouldn't be done is a specious argument really; a person earning €3 million would individually find it easier to move abroad, yes, but that does not guarantee keeping their income connections in Ireland intact, and it's that which is important, not the individual.

What exact contribution can a person provide to society, which makes income beyond €3 million proportionate, out of interest? We are talking about a wage that is at least 60 times that of the average wage; one year of that wage would set a person up for life.

OMD

KyussBishop wrote: »

What exact contribution can a person provide to society, which makes income beyond €3 million proportionate, out of interest? We are talking about a wage that is at least 60 times that of the average wage; one year of that wage would set a person up for life.

Well footballers in UK earn that. The people who pay them are the fans either through gates, tv or merchandise. The fans feel they are worth the 3 million. You may disagree.

KyussBishop

OMD wrote: »

Well footballers in UK earn that. The people who pay them are the fans either through gates, tv or merchandise. The fans feel they are worth the 3 million. You may disagree.

They get the majority of their funding through TV licensing if I recall correctly, which going on decades has been a long manipulated business of bidding for rights to broadcast, and such broadcasts being locked to expensive and exclusive subscriptions; it's a very lucrative business, and fans have literally no say at all in the setting the wages of the footballers.

Typically, when you're getting a TV channel subscription it's more a binary "sports"/"no-sports" decision for an entire package of channels (and you can guarantee all pubs, which pay the more expensive license afaik, get the sports subscription); even if you opt for "no-sports", some of the profits earned from your subscription are still going to go to paying for the sports broadcasting rights as well, whether you watch it or not (probably even if less than half of the subscribers watch the sports, since it's so lucrative).

At that stage, it then becomes a "subscription tv" or "no subscription tv" decision; so really, a complete illusion of choice at every level, people have literally no say at all on footballer wages, and are indirectly contributing to them if they have a subscription with any network that buys up broadcasting rights.

Supermensch

Supermensch wrote: »

tl;dr: The only argument for higher tax is that the government needs money, which is a perfectly valid reason. There is nothing intrinsically wrong or heinous about being rich.

What the government needs is to stop wasting money and then demanding more of it ad infinitum so that it never has to reform itself.
What the govt needs is a lot of things, but forcibly taking more and more money from people just to cover up its own uselessness is not one of them

PeadarCo

KyussBishop wrote: »

Saying it's a waste of Dail time thus shouldn't be done is a specious argument really; a person earning €3 million would individually find it easier to move abroad, yes, but that does not guarantee keeping their income connections in Ireland intact, and it's that which is important, not the individual.

For managers of companies its perfectly possible to manage any company from abroad in the age of the internet. The Dail has enough to be getting on with than wasting time that could be devoted to far bigger problems. If you feel this idea would be an effective use of Dail time far enough.

KyussBishop wrote: »

What exact contribution can a person provide to society, which makes income beyond €3 million proportionate, out of interest? We are talking about a wage that is at least 60 times that of the average wage; one year of that wage would set a person up for life.

As I said its subjective everyone has there own views. OMD gives a good example. For some people the wages soccer earn are grotesque, others on the other hand believe the earn every penny of it if the player helps the team win. Its up to society as a whole to make the decision. In the case of soccer players obviously a large number believe they are worth it given the support some teams get.

PeadarCo

In the case of footballers and anything in general consumers have a large impact on the wages of those involved. If everybody stopped buying Apple products tomorrow the company would go bust. If people don't want to watch football any more broadcasters will quickly change to showing people what they want to watch.

KyussBishop

bluewolf wrote: »

What the government needs is to stop wasting money and then demanding more of it ad infinitum so that it never has to reform itself.
What the govt needs is a lot of things, but forcibly taking more and more money from people just to cover up its own uselessness is not one of them

Government should constantly be getting reformed to be more efficient, sure, but even after sorting out the inefficiencies, taxation has to still come in and be progressively balanced.

PeadarCo wrote: »

For managers of companies its perfectly possible to manage any company from abroad in the age of the internet. The Dail has enough to be getting on with than wasting time that could be devoted to far bigger problems. If you feel this idea would be an effective use of Dail time far enough.

Directors fees are taxed in the country of origin, so any directors fees from a company within Ireland are taxed here, even if the person is resident elsewhere.
http://www.revenue.ie/en/practitioner/law/tax-treaties.html

PeadarCo wrote: »

As I said its subjective everyone has there own views. OMD gives a good example. For some people the wages soccer earn are grotesque, others on the other hand believe the earn every penny of it if the player helps the team win. Its up to society as a whole to make the decision. In the case of soccer players obviously a large number believe they are worth it given the support some teams get.

Football players wages are in no way determined by society as a whole, they are determined by the corporate configuration of their industry, and the related industries which share funding/business with them, which (as I outlined in my previous post) the public at large has pretty much no control over in determining wages.

The whole idea that "how much is too much?" is subjective, does not invalidate the idea of capping or taxing the crap out of income past a certain point, as my previous arguments in favour of it are not based on this question and explicitly acknowledge the effects it may have on genuinely earned income, but wants to counterbalance them against disincentivizing other negative/damaging effects (as well as simply having a more progressive tax system).

KyussBishop

PeadarCo wrote: »

In the case of footballers and anything in general consumers have a large impact on the wages of those involved. If everybody stopped buying Apple products tomorrow the company would go bust. If people don't want to watch football any more broadcasters will quickly change to showing people what they want to watch.

As I explained in my reply to OMD, the primary choice you have is "subscription TV" or "no subscription TV", as you don't have that fine a level of control.

Also, pubs especially have to pay a premium well beyond household costs for such subscriptions (making them a big profit point), which means when you go to a pub that shows sports (i.e. "when you go to a pub"), you are indirectly funding it still.

You have no choice (on wages). No choice you make individually will have an effect. Public apathy on the subject does not equal endorsement. This is a pretty good example of an 'illusion of choice' in a market.

PeadarCo

KyussBishop wrote: »

Directors fees are taxed in the country of origin, so any directors fees from a company within Ireland are taxed here, even if the person is resident elsewhere.
http://www.revenue.ie/en/practitioner/law/tax-treaties.html

What tax treaty are you referring to. The text in that link deals with corporation tax not personal tax.

KyussBishop wrote: »

Football players wages are in no way determined by society as a whole, they are determined by the corporate configuration of their industry, and the related industries which share funding/business with them, which (as I outlined in my previous post) the public at large has pretty much no control over in determining wages.

What determines the corporate structure of football is ultimately the consumer. It is a form of entertainment. There are countless alternatives on offer. TV revenue is only one element there are other such as sponsorship and match attendances that are just as important. Look at the ticket prices into top Premier League match's which still attract large attendances. If people lose interest the amount of money drops. Consumers don't influence individual wages by and large but ultimately they determine the size of the pot from which the wages must be paid.

KyussBishop wrote: »

The whole idea that "how much is too much?" is subjective, does not invalidate the idea of capping or taxing the crap out of income past a certain point, as my previous arguments in favour of it are not based on this question and explicitly acknowledge the effects it may have on genuinely earned income, but wants to counterbalance them against disincentivizing other negative/damaging effects (as well as simply having a more progressive tax system).

Being subjective does invalidate your point as the view you have put forward is that is essentially unethical for a person to earn more than €X. If they are doing this then they must be involved or benefit from unethical behaviour. That figure is subjective and opinion is entirely subjective as seen from the issue with footballers. If have any empirical evidence that suggests a different view you are more than welcome to put it forward.

This is how I view your argument in another context at the other end of the scale. I can argue its unethical for a person in the local Spar to earn more than the cost of the electricity for a vending machine. They are depriving me of income that could spend on other things that a machine can't do. I can buy a bottle of water of both and the cost to supply that service is cheaper with the vending machine and hence I am being ripped off/the person is earning far too much which could be considered unethical.

If you have any empirical evidence that would support your claims it would help because at this stage we are beginning to argue in circles.

PeadarCo

KyussBishop wrote: »

As I explained in my reply to OMD, the primary choice you have is "subscription TV" or "no subscription TV", as you don't have that fine a level of control.

Also, pubs especially have to pay a premium well beyond household costs for such subscriptions (making them a big profit point), which means when you go to a pub that shows sports (i.e. "when you go to a pub"), you are indirectly funding it still.

You have no choice (on wages). No choice you make individually will have an effect. Public apathy on the subject does not equal endorsement. This is a pretty good example of an 'illusion of choice' in a market.

Look in the case of a footballer the FIFA world cup has audience figure that can numbered in billions. If they didn't watch it and nobody is forced to attend or watch any game the players would get there large wages. They get paid so much as they are at the top level of a sport in which commands such massive interest and participation levels.

Kinski

PeadarCo wrote: »

In the case of footballers and anything in general consumers have a large impact on the wages of those involved. If everybody stopped buying Apple products tomorrow the company would go bust. If people don't want to watch football any more broadcasters will quickly change to showing people what they want to watch.

/Goes on tangent

Football does not make for such straightforward comparisons with other industries. For one thing, football clubs in England have a special exemption from certain employment laws: footballers can't hand in their notice, they are bound by the length of the contracts they sign.

The amount of money funnelled into players' wages in England can be, in large part, traced back to changes in the structure of the industry which occurred during the late 80's and early 90's, when the Premier League was founded, granting top-flight club football commercial independence from the English FA.

And it's clearly a dysfunctional industry, with fifteen of the Premier League's twenty clubs recording losses in the 2010/11 season, including an almost £200m loss for soon-to-be champions Manchester City (which happens to be bankrolled by some very wealthy people, who are probably, like Roman Abramovich at Chelsea, seeking prestige rather than profits from football.)

/Gets off tangent

Supermensch

bluewolf wrote: »

What the government needs is to stop wasting money and then demanding more of it ad infinitum so that it never has to reform itself.
What the govt needs is a lot of things, but forcibly taking more and more money from people just to cover up its own uselessness is not one of them

I agree with you there, I do believe that the government should, and arguably needs to do more to improve the efficiency and equality at which it allocates public funding. The only point I was trying to make above is that there is no justification for higher income tax for high earners, or indeed income tax in general, other than that it is a method for the government of procuring funds. Whether this method is 'fair' or justifiable is another debate, but what I am arguing here is that there is no sound ethical justification to tax someone who earns a high wage highly. It is very attractive to fall into the Robin Hood, "Take from the rich, give to the poor" ideal, but this maxim is ethically flawed, and the point of my argument was to dispel the notion that such ideals make for sound basis for high income tax on high incomes.

KyussBishop

PeadarCo wrote:

What tax treaty are you referring to. The text in that link deals with corporation tax not personal tax.

Most of the treaties there in general, cover directors fees as well.

PeadarCo wrote:

What determines the corporate structure of football is ultimately the consumer. It is a form of entertainment. There are countless alternatives on offer. TV revenue is only one element there are other such as sponsorship and match attendances that are just as important. Look at the ticket prices into top Premier League match's which still attract large attendances. If people lose interest the amount of money drops. Consumers don't influence individual wages by and large but ultimately they determine the size of the pot from which the wages must be paid.

Here is an article outlining the profits involved:
http://www.sportingintelligence.com/2012/06/17/this-bubble-ain%E2%80%99t-bursting-yet-all-the-details-you%E2%80%99d-ever-want-to-know-about-the-premier-league%E2%80%99s-new-tv-deals-170601/

The TV rights are worth £3 billion (and that is in pounds) through 2013-16, i.e. £1 billion a year, with a significant portion of that funding coming from subscriptions from public places (pubs/clubs etc.).

The consumer has no choice over the costs for TV subscriptions in local places (pubs etc.), no choice in the cost of their TV package subscriptions, and no choice in the cost of stadium tickets either.
Customers don't influence anything basically, because the TV subscribers, the football associations selling the TV rights, and the clubs themselves are all the gatekeepers who get to decide all the prices

Any corporation (and especially an entire industry like football) can push as far as they like in any silly direction regarding ethics, salaries, bonuses, whatever, so long as it does not tip the balance of public apathy outside of their favour.
For an industry like football, which has rooted itself into a significant (albeit somewhat vapid) cultural position over time, and who are able to monopolize access (TV rights for one) to this part of 'culture', they can push pretty damn far and (if they want, if it benefits them) piss a lot of people off before they are going to lose support, just because it's so ingrained.

To make any difference with this industry, individual choice isn't going to do a single thing, you'd need an entire movement to fight public apathy on the issue (which of course is a tall order, as it's pretty insignificant compared to many other things).
Again worth repeating: Don't mistake public apathy for endorsement; just because momentum has not built up around an issue, to create an entire movement to change it, doesn't mean it is supported.


That is a large part of what makes the idea of consumer 'choice' an illusion/fallacy in certain warped markets; overcoming the inertia of public apathy can be a significant challenge.

PeadarCo wrote:

KyussBishop wrote:

The whole idea that "how much is too much?" is subjective, does not invalidate the idea of capping or taxing the crap out of income past a certain point, as my previous arguments in favour of it are not based on this question and explicitly acknowledge the effects it may have on genuinely earned income, but wants to counterbalance them against disincentivizing other negative/damaging effects (as well as simply having a more progressive tax system).

Being subjective does invalidate your point as the view you have put forward is that is essentially unethical for a person to earn more than €X. If they are doing this then they must be involved or benefit from unethical behaviour.

No, I have explicitly not done this, you are deliberately ignoring pretty much all of my supporting arguments, and positing a straw man argument that I did not make.
Only by ignoring everything I said in my previous post can you come to the conclusion that I am labeling all people earning past 'x' as unethical; I have explicitly said that is not the case.

Just by reading the the bit you quoted, it can be seen straight away how I am counterbalancing the costs associated with unethical earnings, against the cost of impacting genuinely earned income.

If you want to avoid going around in circles, it would help by portraying my arguments honestly, as this is the second time you've warped my argument in exactly the same way.

KyussBishop

Supermensch wrote: »

The only point I was trying to make above is that there is no justification for higher income tax for high earners, or indeed income tax in general, other than that it is a method for the government of procuring funds.

Why not though? Subsidies and tax breaks, and indeed higher taxes on specific items, all get used to tweak incentives/disincentives in various industries; what is so unique about income tax?

Another potential policy I have read elsewhere for instance, which is a lot more explicit/well-defined than arguments I've put for taxing high-income before, is the idea of capping executive payments in a corporation to 40-60x (maybe even go to 100x if you like) that of the lowest salary earned within a corporation.

That idea tackles the problem of excessive executive salaries, whilst simultaneously incentivizing giving all workers of a corporation benefits from the profits, by raising the wage floor.

That is surely a lot less objectionable than my other generalized arguments in favour of high taxes? (specifically as a CEO can pay himself whatever he likes, so long as he pulls the bottom wages up with, after a point)

Supermensch wrote: »

Whether this method is 'fair' or justifiable is another debate, but what I am arguing here is that there is no sound ethical justification to tax someone who earns a high wage highly.

What about tackling growing income inequality, and all of the societal/political ills that creates? That is justification in itself really, as it's well documented that disproportionate political power is in line with disproportionate income (for one, among much else).

PeadarCo

KyussBishop wrote: »

Most of the treaties there in general, cover directors fees as well.

Could you point me towards one specific tax treaty as an example. I don't want to have to read 60+ tax treaties

KyussBishop wrote: »

Here is an article outlining the profits involved:
http://www.sportingintelligence.com/2012/06/17/this-bubble-ain%E2%80%99t-bursting-yet-all-the-details-you%E2%80%99d-ever-want-to-know-about-the-premier-league%E2%80%99s-new-tv-deals-170601/

The TV rights are worth £3 billion (and that is in pounds) through 2013-16, i.e. £1 billion a year, with a significant portion of that funding coming from subscriptions from public places (pubs/clubs etc.).

The consumer has no choice over the costs for TV subscriptions in local places (pubs etc.), no choice in the cost of their TV package subscriptions, and no choice in the cost of stadium tickets either.
Customers don't influence anything basically, because the TV subscribers, the football associations selling the TV rights, and the clubs themselves are all the gatekeepers who get to decide all the prices

Any corporation (and especially an entire industry like football) can push as far as they like in any silly direction regarding ethics, salaries, bonuses, whatever, so long as it does not tip the balance of public apathy outside of their favour.
For an industry like football, which has rooted itself into a significant (albeit somewhat vapid) cultural position over time, and who are able to monopolize access (TV rights for one) to this part of 'culture', they can push pretty damn far and (if they want, if it benefits them) piss a lot of people off before they are going to lose support, just because it's so ingrained.

To make any difference with this industry, individual choice isn't going to do a single thing, you'd need an entire movement to fight public apathy on the issue (which of course is a tall order, as it's pretty insignificant compared to many other things).
Again worth repeating: Don't mistake public apathy for endorsement; just because momentum has not built up around an issue, to create an entire movement to change it, doesn't mean it is supported.


That is a large part of what makes the idea of consumer 'choice' an illusion/fallacy in certain warped markets; overcoming the inertia of public apathy can be a significant challenge.

http://swissramble.blogspot.ie/2011/12/manchester-city-masterplan.html

My point was that TV revenue is only one element. Take Man City media revenues contribute less than half their income. I agree with Kinski that some clubs are arguably commercially unsustainable but I also make the point that clubs such as Bayern Munich can still pay large wages and be profitable year after year.The author notes in the paragraph above the 2 graph the German club have been profitable for 19years.

Also in this subsequent link a table which has a graph showing the contribution of TV revenue to clubs. For most its less than half. Also in Bayerns situation wages are only about half of their overall turnover.
http://swissramble.blogspot.ie/search/label/Bayern%20Munich

The point what you don't seem to get is that people are not forced to watch the sport. There are plenty of other things to watch.

KyussBishop wrote: »

No, I have explicitly not done this, you are deliberately ignoring pretty much all of my supporting arguments, and positing a straw man argument that I did not make.
Only by ignoring everything I said in my previous post can you come to the conclusion that I am labeling all people earning past 'x' as unethical; I have explicitly said that is not the case.

Just by reading the the bit you quoted, it can be seen straight away how I am counterbalancing the costs associated with unethical earnings, against the cost of impacting genuinely earned income.

If you want to avoid going around in circles, it would help by portraying my arguments honestly, as this is the second time you've warped my argument in exactly the same way.

Could I ask you to restate your arguments using empirical evidence to support your arguments. At this stage I see your argument as being that's its immoral to earn more than €X. You believe anyone earning more than €X is benefiting from unethical behaviour and hence should be taxed according. Any downsides to this are outweighed by the benefit to the general public. I could be wrong and am open to correction.

I obviously disagree with that and with no empirical evidence to support your position we end up going round in circles.