What if everyone actually paid their tax? Would things be a lot easier?

NIMAN

The recent stories about 'effective' corporation tax, both here and in the UK, got me thinking as to whether the situation in the country would be eased much if the likes of Intel, Google, Apple, Dell etc etc actually paid 12.5% tax.

And if all the shrewd millionaires actually paid the higher rate of tax themselves rather than using every loophole under the sun to minimise their tax liability.

What if every loophole was closed and everyone paid what they were meant to? Would it raise much more for the economy as a whole?

srsly78

Nope we would be screwed, since many multinationals use Ireland to evade tax in other countries.

noodler

Well, we have tax rates of 20% an 41% for incomet tax but, due to tax credits, the effective income tax rate can be much lower!

NIMAN

Do millionaires need tax credits?

@srsly78, do you mean these companies would up and leave if actually forced to pay 12.5% effect rate?

srsly78

No I mean they are only here because we are a tax haven. Other countries are the ones losing out. If the companies were to be honest, it is us that would lose out.

Scortho

NIMAN wrote: »

Do millionaires need tax credits?

@srsly78, do you mean these companies would up and leave if actually forced to pay 12.5% effect rate?

A lot of multinationals base them selves here in Ireland to use our tax system to their advantage. It's known as the double irish and a Dutch sandwich!

In return they employ large amounts of people in high tech jobs as well as sponsoring universities through donations and research funding as well as internships etc.
we should keep allowing this for as long as we can as companies can up ship fairly readily! They're not here for our low wages after all!

catch.23

NIMAN wrote: »

The recent stories about 'effective' corporation tax, both here and in the UK, got me thinking as to whether the situation in the country would be eased much if the likes of Intel, Google, Apple, Dell etc etc actually paid 12.5% tax.

And if all the shrewd millionaires actually paid the higher rate of tax themselves rather than using every loophole under the sun to minimise their tax liability.

What if every loophole was closed and everyone paid what they were meant to? Would it raise much more for the economy as a whole?

It would make an even bigger difference if everyone who worked cash in hand paid the tax due.

Icepick

The government should not have more money. It should spend less.

KyussBishop

Icepick wrote: »

The government should not have more money. It should spend less.

If the government spend less, that inherently means less money will get into the private economy; the private economy needs more money than it has now, in order to recover, so a policy like that damages the entire economy (in addition to decimating public services).

Government should certainly utilize the money it has more efficiently, but a vote for government spending less (thus putting less money into the private economy), is a vote for destroying the wider economy even further.

Head The Wall

Considering how much they divert it into their own and their friends pockets i.e. storage contacts for e-voting machines they should start by spending it better to rebuild peoples trusts. I left the country as its sickening to see some of the crap taxes get wasted on.

Icepick

KyussBishop wrote: »

If the government spend less, that inherently means less money will get into the private economy

No it does not in the long run.
You want the government to do what they did when they created one of the biggest property bubbles in history.

johnnyskeleton

KyussBishop wrote: »

If the government spend less, that inherently means less money will get into the private economy; the private economy needs more money than it has now, in order to recover, so a policy like that damages the entire economy (in addition to decimating public services).

Government should certainly utilize the money it has more efficiently, but a vote for government spending less (thus putting less money into the private economy), is a vote for destroying the wider economy even further.

The point is that the government doesn't have this money to spend, they are borrowing it. The level of government spending is unsustainable and if they continue as is that will destroy the economy far worse than current spending cuts ever could.

KyussBishop

Icepick wrote: »

No it does not in the long run.

'In the long run' here means completely destroying the economy in the short-term, until maximum damage has been achieved and it can't possibly get any worse, and then, when the only possible way is up, starting a slow crawl to recovery, and eventually (after an extremely long time, the best part of a decade if not more) more money getting in to the economy.

That is still destroying our economy, and ensuring maximum possible damage, and maximum suffering to the people in society (which includes a lot of people dying, a lot of peoples health being harmed, and a lot of peoples futures being destroyed).


You could drop a nuke on Ireland and 'in the long run' the country will at some stage be more prosperous than it is now, so in this context, saying that things will be better in the long run, is a totally meaningless statement, that you can use to justify ignoring anything that happens in the short-term.

Icepick wrote: »

You want the government to do what they did when they created one of the biggest property bubbles in history.

Deficit spending did not cause the property bubble.

KyussBishop

johnnyskeleton wrote: »

The point is that the government doesn't have this money to spend, they are borrowing it. The level of government spending is unsustainable and if they continue as is that will destroy the economy far worse than current spending cuts ever could.

Indeed, spending from borrowing is unsustainable; the EU needs to step in with money creation (without tacking that on to public debt), of which there are ample policy opportunities for making non-inflationary use of that money, while directly helping the economy recover.

I've been discussing that a lot in threads recently, with a larger one here giving some background on it.

eyescreamcone

catch.23 wrote: »

It would make an even bigger difference if everyone who worked cash in hand paid the tax due.

Instead of telling us what the budget was, noonan should have stood up and just said "I declare the black economy open"

It's all cash at the moment. The buyers think they can get a good deal and the seller is delighted to reduce his tax bill.
And it's only going to get worse.

noodler

KyussBishop wrote: »

Deficit spending did not cause the property bubble.

Well we were running structural deficits during the boom which did not help.

I know it is well-trodden ground at this stage but the Government's fiscal policy during the boom undoubtedly inflamed the property bubble.

KyussBishop

noodler wrote: »

Well we were running structural deficits during the boom which did not help.

I know it is well-trodden ground at this stage but the Government's fiscal policy during the boom undoubtedly inflamed the property bubble.

True enough; bad fiscal policy for sure, though not a problem with deficit spending itself

noodler

KyussBishop wrote: »

True enough; bad fiscal policy for sure, though not a problem with deficit spending itself

Well, we thought we were spending sustainable revenues (even if we probably didn't look into it in serious detail!).

A deficit is no problem when your debt is small to begin with and you have control over your own MP.

KyussBishop

noodler wrote: »

Well, we thought we were spending sustainable revenues (even if we probably didn't look into it in serious detail!).

A deficit is no problem when your debt is small to begin with and you have control over your own MP.

True ya; we certainly won't be able to do adequate deficit spending without EU help in any case, which is what needs to be pushed for.

jank

KyussBishop wrote: »

If the government spend less, that inherently means less money will get into the private economy; the private economy needs more money than it has now, in order to recover, so a policy like that damages the entire economy (in addition to decimating public services).

Government should certainly utilize the money it has more efficiently, but a vote for government spending less (thus putting less money into the private economy), is a vote for destroying the wider economy even further.

If government spends less money then private citizens and business's has more money to spend themselves on things they choose to spend it on as they get taxed less.
You seem to think that government spending is creating wealth. Government never creates or has ever created wealth for its citizens.

darkhorse

jank wrote: »

If government spends less money then private citizens and business's has more money to spend themselves on things they choose to spend it on as they get taxed less.
You seem to think that government spending is creating wealth. Government never creates or has ever created wealth for its citizens.

Most governments, the Irish government included, destroy wealth and growth, to the detriment of its people.

regi

nevermind

KyussBishop

jank wrote: »

If government spends less money then private citizens and business's has more money to spend themselves on things they choose to spend it on as they get taxed less.
You seem to think that government spending is creating wealth. Government never creates or has ever created wealth for its citizens.

Where did I say government spending creates wealth? Money does not equal wealth, the purpose of money is to facilitate the transaction of goods/wealth, and if there is not enough money in the private economy, such transactions (and thus the economy as a whole) must slow down.

Also, when government creates money (which needs to happen for there to be any money at all), how do you think it gets into the wider economy? Government has to spend it first, to introduce money into the private economy.


If all the money in the economy was based on personal debt, and government deficit spending did not happen, then how can interest payments on that debt ever be met?
You need the money supply to grow for that to happen, so how are you going to do that; more private debt? (and how will interest on that be paid, etc.)

For the money supply to grow in the private economy, government has to spend more than it taxes, has to deficit spend; deficit spending is not only good for the economy, it is required for a functioning economy, because you can't base the money supply on inherently unsustainable private debt (though I will bet, you will only selectively reply to parts of this, with arguments ignoring parts I've already addressed).

RoverZT

Icepick wrote: »

The government should not have more money. It should spend less.

Exactly.

Think someone here said New Zealand have 70,000 public sector workers with a population of 4.5 million.

While we have 220,000 public sector workers with the same population of 4.5 million.

We have both have similar GDP 160 -180 Billion per year.

We both have the same minimum wage too of 8.50.

Government shouldn't get a penny more.

What a bunch of clowns.

They should be getting their house in order.

noodler

RoverZT wrote: »

Exactly.

Think someone here said New Zealand have 70,000 public sector workers with a population of 4.5 million.

While we have 220,000 public sector workers with the same population of 4.5 million.

We have both have similar GDP 160 -180 Billion per year.

Government shouldn't get a penny more.

They are **** with money.

We have over 280,000 PS workers! (full time equivalents anyway, there is actually 330,000 or so if we measure it on a part-time basis).

EDIT: The evidence (based on a comparison with other OECD countries) would seem to indicate our PS numbers are about average.
http://www.irishtimes.com/newspaper/finance/2012/0914/1224324008263.html

RoverZT

noodler wrote: »

We have over 280,000 PS workers! (full time equivalents anyway, there is actually 330,000 or so if we measure it on a part-time basis).

EDIT: The evidence (based on a comparison with other OECD countries) would seem to indicate our PS numbers are about average.
http://www.irishtimes.com/newspaper/finance/2012/0914/1224324008263.html

Jesus that is unreal.

Don't we have something like 2.3 million income tax payers in the country?

Almost 15% of the countries tax payers are PS workers

What the **** do they do all day :eek:

guinnessdrinker

I think Labour fudged the 3% increase in the USC for high earners. A third rate of tax would have been much fairer.

It would not have solved much in the grand scheme of things but would have raised over €350 million and would have negated the €325 million respite cut.

NIMAN

If this figure is accurate
http://www.independent.ie/business/irish/google-pays-just-014-tax-in-seven-years-3319796.html
then its shocking.

Global giant paid less than €70m in tax on sales of €47bn through its Irish operations

An effective tax rate of 0.14%.

thebman

NIMAN wrote: »

If this figure is accurate
http://www.independent.ie/business/irish/google-pays-just-014-tax-in-seven-years-3319796.html
then its shocking.

Global giant paid less than €70m in tax on sales of €47bn through its Irish operations

An effective tax rate of 0.14%.

This bit is true though:

"We have an obligation to our shareholders to run our business efficiently and we comply with all the tax rules in Ireland."

Can't blame the people there for doing their jobs well. Government policy needs to change to stop such things happening. Could end up costing Ireland jobs though so they probably won't.

And what is more, the government in general could learn from the above quote about how to run things. They have an obligation to the citizens of the state to run it efficiently and not waste money.

ArmaniJeanss

NIMAN wrote: »

Global giant paid less than €70m in tax on sales of €47bn through its Irish operations

An effective tax rate of 0.14%.

Very misleading, as you don't pay corporation tax on your sales.
You pay it on your profit.
(I'm sure Google are still paying an abnormally low effective rate even on profits, but a garbage article nonetheless).

jank

KyussBishop wrote: »

Also, when government creates money (which needs to happen for there to be any money at all), how do you think it gets into the wider economy? Government has to spend it first, to introduce money into the private economy

You dont really know much about money creation do you? Central banks create money, not governments unless the ECB is a government?

KyussBishop wrote: »

For the money supply to grow in the private economy, government has to spend more than it taxes, has to deficit spend; deficit spending is not only good for the economy, it is required for a functioning economy, because you can't base the money supply on inherently unsustainable private debt (though I will bet, you will only selectively reply to parts of this, with arguments ignoring parts I've already addressed).

Seriously, what a pile of $hite. If the above is true then Greece is in a great position!

KyussBishop

You don't even engage in argument here, you engage in semantics over the source of the money supply, and in a straw man over Greece.

itzme

NIMAN wrote: »

The recent stories about 'effective' corporation tax, both here and in the UK, got me thinking as to whether the situation in the country would be eased much if the likes of Intel, Google, Apple, Dell etc etc actually paid 12.5% tax.

And if all the shrewd millionaires actually paid the higher rate of tax themselves rather than using every loophole under the sun to minimise their tax liability.

What if every loophole was closed and everyone paid what they were meant to? Would it raise much more for the economy as a whole?

It seems the thread has been derailed a fair bit, so to just answer your original point it is definitely something that needs to be looked at. Last year google paid €8mn tax on €9000mn gross profit http://www.independent.ie/business/irish/google-pays-just-8m-tax-here-by-routing-9bn-profits-abroad-3251142.html

Everything needs to be looked at in Irelands income and expenditure, and just because there are serious problems in the PS, health, social welfare, banking.... shouldn't mean every thread descends into the same deflection.

As has been said we have to be careful about fully enforcing our 12.5%, the loopholes are one of the reasons some (not all) of the companies are here. That doesn't mean we should keep letting them get away with as much as they do.

Icepick

itzme wrote: »

It seems the thread has been derailed a fair bit, so to just answer your original point it is definitely something that needs to be looked at. Last year google paid €8mn tax on €9000mn gross profit http://www.independent.ie/business/irish/google-pays-just-8m-tax-here-by-routing-9bn-profits-abroad-3251142.html

Almost all the profit was generated abroad anyway. Employers should be liable for sick pay though. In return, they should pay less PRSI.

itzme

Icepick wrote: »

Almost all the profit was generated abroad anyway. Employers should be liable for sick pay though. In return, they should pay less PRSI.

I don't see your point, they are registered in Ireland as a company the profits are legally generated in Ireland. It doesn't matter where the money comes from.

Its not just Ireland that they are doing it in, large multinationals are not meeting their responsibilities when it comes to tax
Google 2.4% worldwide in the last three years
Double Irish /Double Dutch
They sheltered €2bn in tax worldwide in 2011 alone http://www.bloomberg.com/news/2012-12-10/google-revenues-sheltered-in-no-tax-bermuda-soar-to-10-billion.html

Unless there is a concerted international effort to close these tax loopholes then we have to be careful. Let's not forget though that this is clever international accounting. If they need to have their company HQ in romania they will that doesn't mean all the jobs they have in Ireland will just go either.

Icepick

itzme wrote: »

I don't see your point, they are registered in Ireland as a company the profits are legally generated in Ireland. It doesn't matter where the money comes from.

Its not just Ireland that they are doing it in, large multinationals are not meeting their responsibilities when it comes to tax
Google 2.4% worldwide in the last three years
Double Irish /Double Dutch
They sheltered €2bn in tax worldwide in 2011 alone http://www.bloomberg.com/news/2012-12-10/google-revenues-sheltered-in-no-tax-bermuda-soar-to-10-billion.html

Unless there is a concerted international effort to close these tax loopholes then we have to be careful. Let's not forget though that this is clever international accounting. If they need to have their company HQ in romania they will that doesn't mean all the jobs they have in Ireland will just go either.

It's not illegal and is the main reason why they are here.

jank

KyussBishop wrote: »

You don't even engage in argument here, you engage in semantics over the source of the money supply, and in a straw man over Greece.

Well the semantics of saying that governments that spends more then it taxes is good is utterly stupid reasoning. European governments have no control over the money supply maybe apart from germany so talking about money supply is all mute.

noodler

jank wrote: »

Well the semantics of saying that governments that spends more then it taxes is good is utterly stupid reasoning.

Not true, there are situations when running deficits are good for the economy (i.e. when we are in recession).

You simply need to have built up substantial surpluses during the good times for this to be an option (counter-cyclical policy and all that).

itzme

Icepick wrote: »

It's not illegal and is the main reason why they are here.

So you're in favour of multinationals in Ireland paying 0.14% tax on profits then?

noodler

itzme wrote: »

So you're in favour of multinationals in Ireland paying 0.14% tax on profits then?

Well, just Google right?

Scortho

So we get 8 million in tax from google for letting them have their double Irish and a Dutch Sandwich?
I think we should keep letting them do this. If we increase it, they'll just move headquarters to another jurisdiction and we'll have to find an extra 8 million!

KyussBishop

jank wrote: »

Well the semantics of saying that governments that spends more then it taxes is good is utterly stupid reasoning. European governments have no control over the money supply maybe apart from germany so talking about money supply is all mute.

Given that I'm getting warned for discussing theory in this forum, I don't yet know what I can discuss on this thread/forum without risking further warning, as I'm waiting for that to be cleared up; nonetheless, I have described in this post below, why it is irrelevant to distinguish between the central bank and government, regarding the money supply (unless you actually want to talk specifically about interactions between the central bank and government):
https://www.boards.ie/vbulletin/showthread.php?t=2056824375#post82168242

If you disagree with what's posted there, I can only reply to it in that thread.


In your wider post, you are not engaging with any of my arguments, as I have explained in detail in previous posts, exactly the reasoning why government spending more than it taxes, is necessary; I have also explicitly said policies need to be undertaken at an EU level, but you are ignoring that, and are selectively replying to my posts.

All of my arguments on that, are repeated in the first post, in the linked thread above; I can't discuss the theory behind all of that here without getting warned, so any replies will need to be in that thread.

Icepick

itzme wrote: »

So you're in favour of multinationals in Ireland paying 0.14% tax on profits then?

profits made outside Ireland