Cyprus bail out deal

antoobrien

cson wrote: »

The madness of this being two depositors; one with €99,999 and the other with €100,001. The latter potentially loses everything.

This appears to be wrong, the EU guarantee protects deposits up to the value of €100,000. Depositors in Laiki Bank (the one being closed) could lose all their deposits above €100,000, but the guarantee will pay out on the first €100,000.

Scofflaw

hmmm wrote: »

If a bank is bankrupt, the savings are gone. I've seen people say today that the Germans are "robbing" the deposits of the Cypriots. That's a complete lack of understanding of how banking works. The deposits are gone, the question now is how much is Germany willing to pay to help prop up the Cypriot economy and allow the banks to recover in time, which should allow them to repay deposits.

Yes - apparently the Germans are "robbing" the deposits eve though the money involved is used to lighten the public debt load of Cyprus and save Cypriot banks, and the Germans never get any money except perhaps what they're then loaning Cyprus in addition to save their banks.

It's an interesting redefinition of the term, I suppose.

cordially,
Scofflaw

Scofflaw

antoobrien wrote: »

This appears to be wrong, the EU guarantee protects deposits up to the value of €100,000. Depositors in Laiki Bank (the one being closed) could lose all their deposits above €100,000, but the guarantee will pay out on the first €100,000.

Necessarily so, since the deposit guarantee specifically pays out when a bank cannot make up the deposits as a result of financial difficulty. Laiki is being liquidated, which is exactly when the deposit guarantee applies.

cordially,
Scofflaw

Sponge Bob

Not much talk of Lebanese money among the Russian Mafia headlines but according to one chap I spoke to around 20% of Lebanese GDP has gone poof but this is hidden in the mandatory bank closures of the past week.

His fear ( he is a doctor) is that when the Lebanese banks in Cyprus open there will be a run which will crash their parents at home in Beirut (mainly) as these banks are not guaranteed by the ECB in the main.

We shall see.

Godge

Duiske wrote: »

Deal appears to have been done. A massive 40% hit on deposits over €100,000. That is just savage.

http://www.news.com.au/breaking-news/world/cyprus-in-last-ditch-bailout-talks/story-e6frfkui-1226605081089

A once-off wealth tax of 40%, now that is an interesting idea on how to pay off our debt. Say we applied it to property (other than the family home) as well as bank accounts, we could wipe out our debt overnight.

No more austerity for the ordinary guy without any wealth and the wealthy only lose 40% of what they own, still leaves them a lot.

Eoin247

Godge wrote: »

A once-off wealth tax of 40%, now that is an interesting idea on how to pay off our debt. Say we applied it to property (other than the family home) as well as bank accounts, we could wipe out our debt overnight.

No more austerity for the ordinary guy without any wealth and the wealthy only lose 40% of what they own, still leaves them a lot.

It's not as simple as 'the rich will be half as wealthy so it's great for the rest of us who won't have to pay". International investment in Ireland would be horribly affected. Not to mention large losses of jobs as business owners have to cut costs.

amacca

Godge wrote: »

No more austerity for the ordinary guy without any wealth and the wealthy only lose 40% of what they own, still leaves them a lot.

depends very much on what you define as wealthy - do you consider the financially prudent sitting on top of some modest investments as wealthy?

do you consider someone with say 500k in their bank accounts as wealthy? (perhaps they sold a property and have it in a deposit account waiting to buy another property - a property which may be their only livelihood)


depends also on what you define as the ordinary guy - the ordinary guy who took out a credit union loan in order to have a deposit for a mortgage and then furnished the entire house with a credit card who now has huge outstanding debts and a property which has plummeted in value and not a penny to his name sort of ordinary guy?


40% is a gigantic hit and could be a bitter pill to swallow for the so called wealthy (depending on your definition many of whom may simply be sensible people) while the so called ordinary guy gets away scot free

Godge

amacca wrote: »

depends very much on what you define as wealthy - do you consider the financially prudent sitting on top of some modest investments as wealthy?

Yes, wealthy

amacca wrote: »

do you consider someone with say 500k in their bank accounts as wealthy? (perhaps they sold a property and have it in a deposit account waiting to buy another property - a property which may be their only livelihood)

Yes, wealthy

amacca wrote: »

depends also on what you define as the ordinary guy - the ordinary guy who took out a credit union loan in order to have a deposit for a mortgage and then furnished the entire house with a credit card who now has huge outstanding debts and a property which has plummeted in value and not a penny to his name sort of ordinary guy?

Nope, not an ordinary guy, bought beyond his means, but I did exclude family home from the idea so unless he borrowed all that money for a second home or a string of apartments in Dublin twenty-something, he wouldn't be liable. He is going bankrupt though unless he can pay his debts so he will end up with nothing unlike the wealthy who end up with 60% of something.

amacca wrote: »

40% is a gigantic hit and could be a bitter pill to swallow for the so called wealthy (depending on your definition many of whom may simply be sensible people) while the so called ordinary guy gets away scot free

It is a gigantic hit but it is a once-off. There are public servants who will have taken more than a 40% off their salary by July which is an ongoing hit for their income every year, yet there is no sympathy expressed for them (not that I am expressing sympathy).

I just put it out as an idea to see what reaction it would get, it would be a real left-wing solution to our problems.

Godge

Eoin247 wrote: »

It's not as simple as 'the rich will be half as wealthy so it's great for the rest of us who won't have to pay". International investment in Ireland would be horribly affected. Not to mention large losses of jobs as business owners have to cut costs.

I see the problem with the investment issue, perhaps if we exempted property covered by business rates, that issue would be solved. Any business that employed more than 1,000 people could also be exempted to address the jobs issue. Loud outcry from B&B owners and farmers though. In fact the wealth tax wouldn't need to be 40%. It is possible it would only need to be about 10-15% to cover the national debt anyway. Biggest issue would be liquidity of the wealth.

Blured

Godge wrote: »

It is possible it would only need to be about 10-15% to cover the national debt anyway. Biggest issue would be liquidity of the wealth.

I think the biggest issue would be a 10-15% Wealth Tax! Its fantasy to suggest that such a tax would be in any way viable

handlemaster

Godge wrote: »

I see the problem with the investment issue, perhaps if we exempted property covered by business rates, that issue would be solved. Any business that employed more than 1,000 people could also be exempted to address the jobs issue. Loud outcry from B&B owners and farmers though. In fact the wealth tax wouldn't need to be 40%. It is possible it would only need to be about 10-15% to cover the national debt anyway. Biggest issue would be liquidity of the wealth.

this is cuckoo economics at its best. any financially astute person could see this is just not possible for so may reasons. I can only assume you have nothing to lose or fail to understand risk and reward.

Scofflaw

Godge wrote: »

I see the problem with the investment issue, perhaps if we exempted property covered by business rates, that issue would be solved. Any business that employed more than 1,000 people could also be exempted to address the jobs issue. Loud outcry from B&B owners and farmers though. In fact the wealth tax wouldn't need to be 40%. It is possible it would only need to be about 10-15% to cover the national debt anyway. Biggest issue would be liquidity of the wealth.

Large businesses provide taxes rather than jobs. The vast majority of people work in small businesses.

cordially,
Scofflaw

JOB93

amacca wrote: »

do you consider someone with say 500k in their bank accounts as wealthy? (perhaps they sold a property and have it in a deposit account waiting to buy another property - a property which may be their only livelihood)

They should have never been allowed to borrow the capital for this sold property. It's clear now that deregulation of financial markets has caused capital to flow across borders without any consideration for who's responsible/who should pay in the event of it all blowing up. Had they never joined the Euro or the EMU, the individual you speak of wouldn't have gotten their hands on the European savings which allowed them to buy this property so they would be no worse off by losing 40% of the property's value now.

On the other hand, if this person had the cash to buy this property without the help of Cypriot banks fuelled by German savings, then I would class them as wealthy and able to take the hit.

Scofflaw

JOB93 wrote: »

They should have never been allowed to borrow the capital for this sold property. It's clear now that deregulation of financial markets has caused capital to flow across borders without any consideration for who's responsible/who should pay in the event of it all blowing up. Had they never joined the Euro or the EMU, the individual you speak of wouldn't have gotten their hands on the European savings which allowed them to buy this property so they would be no worse off by losing 40% of the property's value now.

On the other hand, if this person had the cash to buy this property without the help of Cypriot banks fuelled by German savings, then I would class them as wealthy and able to take the hit.

Cypriot banks were not "fueled by German savings". Total eurozone deposits in Cypriot banks are only €4.7bn, 7% of the total deposits of €68.4bn.

cordially,
Scofflaw

Icepick

Kicking the can down the road .. again.

EU taxpayers are gonna lose 10bn as that is not gonna be repaid and Cypriots are just gonna prolong the inevitable bankruptcy.
The country built their economic growth on a mirage, which is gonna disappear very quickly.

Godge

handlemaster wrote: »

this is cuckoo economics at its best. any financially astute person could see this is just not possible for so may reasons. I can only assume you have nothing to lose or fail to understand risk and reward.

I know it is an extreme measure and very difficult on a practical level but it is also an extreme left-wing measure which is therefore unlikely to be popular. Can't see anyone on social welfare or homeless or low-paid complaining about it.

I do understand risk and reward but this is about accumulated wealth not economic activity. There is a difference.

We already tax inheritance of this wealth at 33%. All we would be doing is bringing that tax forward (if the average lifespan is 75, it represents half of 75 years of CAT, more if we don't allow any thresholds). We could allow it to be offset against future inheritance tax.

amacca

JOB93 wrote: »

They should have never been allowed to borrow the capital for this sold property.

there was never any mention of them borrowing this capital in my post, they could simply have sold a business that has been in their hands after being built up over a lifetime in order to buy another one and then got caught with a 40% "wealth" tax simply because they were unlucky enough to get the timing wrong

eg: pub or other business sold to buy another

eg: farm sold to buy another.....500k would buy you around 50acres of good quality land now which you would struggle to get a decent single persons wage off

I dont consider people like these wealthy in the event of such a tax...I for one would consider them unlucky - I know if it happened to me I would be out for blood (literally)

amacca

Godge wrote: »

We could allow it to be offset against future inheritance tax.

people want their money now...not some allowance which could very well turn out to be non-existent in the future

as if you would trust a state to honour a promise that takes 40% of the value of your assets off you now and then promises to not charge your children inheritance tax at some time in the future, possibly 40 years from now....when any number of governments have come and gone and the political landscape could be radically different.......

besides your kids need feeding now......a person would have to be an utter moron imo if they let a measly carrot like that mollify them in any way over an overnight deduction of 40% of their assets which may not even generate that much income in themselves

avalon68

Godge wrote: »

A once-off wealth tax of 40%, now that is an interesting idea on how to pay off our debt. Say we applied it to property (other than the family home) as well as bank accounts, we could wipe out our debt overnight.

No more austerity for the ordinary guy without any wealth and the wealthy only lose 40% of what they own, still leaves them a lot.

So you would essentially steal from the people who have been financially savvy, who didnt blow it all on overpriced property, cars etc. Nice. Why should the "ordinary guy" not pay his share? If you had 10k in the bank would you be happy to hand over 40% of it? I mean, you'd still have 6k ....right?

Scofflaw

amacca wrote: »

there was never any mention of them borrowing this capital in my post, they could simply have sold a business that has been in their hands after being built up over a lifetime in order to buy another one and then got caught with a 40% "wealth" tax simply because they were unlucky enough to get the timing wrong

eg: pub or other business sold to buy another

eg: farm sold to buy another.....500k would buy you around 50acres of good quality land now which you would struggle to get a decent single persons wage off

I dont consider people like these wealthy in the event of such a tax...I for one would consider them unlucky - I know if it happened to me I would be out for blood (literally)

That snapshot effect is very much an inequitable outcome, but it would be perfectly possible to eliminate those unlucky enough to be temporarily holding the results of a house sale from the bailin.

cordially,
Scofflaw

amacca

Scofflaw wrote: »

That snapshot effect is very much an inequitable outcome, but it would be perfectly possible to eliminate those unlucky enough to be temporarily holding the results of a house sale from the bailin.

cordially,
Scofflaw

very true...but will they I wonder?....or will it simply be a case of if you have over 100k you are rich and suck it up

their thinking being that the majority under 100k wont give a damn about those over 100k

even without my extreme examples above its very inequitable.....plenty of people with over 100k in savings are not what I would call particularly wealthy by any stretch of the imagination

if I had a large sum in savings I would now be looking to split it up into amounts below the guaranteed 100k and in a number of different banks at the very least

what has happened will surely cause ordinary retail deposits in periphal eu to redistribute in this way not to mention what larger depositors will do?

uncle_sam_ie

Because of a major loophole, it looks like the Russian oligarchs got their money out last week. http://www.zerohedge.com/news/2013-03-25/have-russians-already-quietly-withdrawn-all-their-cash-cyprus

The only ones getting screwed will be the local Cypriots.

Godge

avalon68 wrote: »

So you would essentially steal from the people who have been financially savvy, who didnt blow it all on overpriced property, cars etc. Nice. Why should the "ordinary guy" not pay his share? If you had 10k in the bank would you be happy to hand over 40% of it? I mean, you'd still have 6k ....right?

The guy who blew it on property would be caught for the tax (unless it was a family home and we could always apply it to houses above a certain size, say 2000 sq. ft which is enough for any family).

We could also extend it to luxury cars. Let us face it, the homeless, those on social welfare, those without property or big cars or big houses, with no second home will all escape the once-off wealth tax. What could be fairer than that?

handlemaster

uncle_sam_ie wrote: »

Because of a major loophole, it looks like the Russian oligarchs got their money out last week. http://www.zerohedge.com/news/2013-03-25/have-russians-already-quietly-withdrawn-all-their-cash-cyprus

The only ones getting screwed will be the local Cypriots.

if that is true its the cypriots themselves that are to blame should have know banks subsiduarys were giving out deposits.... even not should have been automatic shiuld down of all operations. they will pay for it now

Loco

Sorry if it has already been said, but won't this just mean there will be a massive run on the banks there after the tax. And that will need even more bailout cash as they would never be able to pay out

amacca

uncle_sam_ie wrote: »

Because of a major loophole, it looks like the Russian oligarchs got their money out last week.

The only ones getting screwed will be the local Cypriots.

This doesn't surprise me if its true

Godge wrote: »

Let us face it, the homeless, those on social welfare, those without property or big cars or big houses, with no second home will all escape the once-off wealth tax. What could be fairer than that?

You assuming that is a fair outcome would be on a par with me assuming the homeless, those on social welfare and those without property are in that state because they are feckless and lazy etc

ie: ridiculous

Loco

uncle_sam_ie wrote: »

Because of a major loophole, it looks like the Russian oligarchs got their money out last week. http://www.zerohedge.com/news/2013-03-25/have-russians-already-quietly-withdrawn-all-their-cash-cyprus

The only ones getting screwed will be the local Cypriots.

Sneaky russians!

http://www.youtube.com/watch?v=NfMB88KalsY

AlexisM

amacca wrote: »

do you consider someone with say 500k in their bank accounts as wealthy?

Godge wrote: »

Yes, wealthy

Unfunded public sector pension of 20K pa (total pension 32K including state pension) ~ untouched by a 40% 'wealth' tax

Private cost to buy a 20K pension = 400K to 600K. Hit for 40% ~ leaving revised pension savings of 240K to 360K (but still soooper-dooper wealthy...) and revised pension of 12K-ish, for total of 24K vs. untouched public pension of 32K.

Fair? Really?

[And this has already been done here at a lower level with the 2.4% grab from private pension funds]

Hotblack Desiato

AlexisM wrote: »

Unfunded public sector pension of 20K pa (total pension 32K including state pension) ~ untouched by a 40% 'wealth' tax

Fail. Public servants don't get the state pension on top of their occupational pension like the private sector do.

Bullseye1

No wonder they are so good at chess.

uncle_sam_ie wrote: »

Because of a major loophole, it looks like the Russian oligarchs got their money out last week. http://www.zerohedge.com/news/2013-03-25/have-russians-already-quietly-withdrawn-all-their-cash-cyprus

The only ones getting screwed will be the local Cypriots.

sock puppet

amacca wrote: »

40% is a gigantic hit and could be a bitter pill to swallow for the so called wealthy (depending on your definition many of whom may simply be sensible people) while the so called ordinary guy gets away scot free

Unless the money is in their account temporarily before making a transaction, then someone who isn't wealthy and has that amount of money in their bank account is anything but sensible.

amacca

sock puppet wrote: »

Unless the money is in their account temporarily before making a transaction, then someone who isn't wealthy and has that amount of money in their bank account is anything but sensible.

Where should a sensible person have that amount of money then?

sock puppet

amacca wrote: »

Where should a sensible person have that amount of money then?

Somewhere where it might make a decent return. If it's for retirement pensions are more tax efficient. I'm not saying having 500k in a bank account is stupid in itself, but if you have 500k in a bank account and very little invested anywhere else they money could be put to much better use.

Of course if it is just there temporarily then you're getting an incredibly ****ty deal.

avalon68

sock puppet wrote: »

Somewhere where it might make a decent return. If it's for retirement pensions are more tax efficient. I'm not saying having 500k in a bank account is stupid in itself, but if you have 500k in a bank account and very little invested anywhere else they money could be put to much better use.

Of course if it is just there temporarily then you're getting an incredibly ****ty deal.

Not very well up on it , but didnt private pension schemes take a huge battering over the last few years ? Investing is a risk in itself - if people want to keep their money in the bank then thats their choice - it shouldn't mean a free for all on their money. Lots of people will have scrimped and saved over the years to have a nest egg - utterly insane that some people in here suggest stealing it out from under them is ok...... Seems like a lot of people condone extra taxes, paycuts and now outright stealing of cash.....all as long as it doesnt affect themselves of course. Everything is rosy as long as the "rich" are taking the hit.

creedp

AlexisM wrote: »

Unfunded public sector pension of 20K pa (total pension 32K including state pension) ~ untouched by a 40% 'wealth' tax

Private cost to buy a 20K pension = 400K to 600K. Hit for 40% ~ leaving revised pension savings of 240K to 360K (but still soooper-dooper wealthy...) and revised pension of 12K-ish, for total of 24K vs. untouched public pension of 32K.

Fair? Really?

[And this has already been done here at a lower level with the 2.4% grab from private pension funds]

It was about time to lash them pesky public servants again even if this is a Cyprus bailout thread - never pass up on an opportunity. Just don't forget also that the PS pay a 6.5% contribution for this fantastic gold plated unfunded pension and will pay the going rate in income tax when they collect this pension. Now what about the wealthy who have been funding fantastic private pensions to the tune of 40% on the backs on the taxpayer for years. Its great that they wouldn't be hit for a 40% hit on their pension pot isn't.

I would have though anyone with €500k sitting in a bank a/c could hardly be considered poor. Or are you arguing the opposite? In addition they didn't put that windfall together on the minimum wage now.

creedp

avalon68 wrote: »

So you would essentially steal from the people who have been financially savvy, who didnt blow it all on overpriced property, cars etc. Nice. Why should the "ordinary guy" not pay his share? If you had 10k in the bank would you be happy to hand over 40% of it? I mean, you'd still have 6k ....right?

This is the argument though. If a person invests in a property, shares, a business and it goes down in value .. then tough. Yet if you invest in a bank with your savings you should be untouchable. While I have no problem and indeed support the bank guarantee scheme for up to €100k . I can see why people with more than €100k in Cyprus are being asked to take a hit .. I do think though that a 40% hit is extremely harsh as it hits one category of the population very badly while others are let off scot free. However, this seems to be the way things are going now .. social solidarity is breaking down and people/institutions are hunting in packs. If your lucky you're not the hunted ..

Bob_Latchford

creedp wrote: »

This is the argument though. If a person invests in a property, shares, a business and it goes down in value .. then tough. Yet if you invest in a bank with your savings you should be untouchable.

When do we see the the first bank adverts with

Warning: The value of your savings may go down nominally as well as down in in real terms

osheen

sock puppet wrote: »

Somewhere where it might make a decent return. If it's for retirement pensions are more tax efficient. I'm not saying having 500k in a bank account is stupid in itself, but if you have 500k in a bank account and very little invested anywhere else they money could be put to much better use.

Of course if it is just there temporarily then you're getting an incredibly ****ty deal.

I believe that these cupriot banks had saving accounts that paid 5- 6% interest

snaps

Banks will stay shut until Thursday "to make sure of the smooth running of the banking system" what a contradiction, if the banks are shut there is no banking system running? As far as im aware too, electronic transfers have been suspended too.

AlexisM

ninja900 wrote: »

Fail. Public servants don't get the state pension on top of their occupational pension like the private sector do.

Epic fail back at you. Post-1995 civil servants have a pension integrated with the state pension - it's why they pay full PRSI. See Q9 on http://www.cspensions.gov.ie/faq2.pdf.

How are my pension and lump sum calculated? This scheme
provides pension benefits which take account of the State Pension
(Contributory). No account is taken of the State Pension in calculating
the lump sum. Subject to a minimum of 2 years qualifying service your
pension and lump sum are calculated as follows:

Pension: Up to the 31st December 2003, for the civil service pension,
pensionable remuneration is co-ordinated with the State Pension
(Contributory) payable to a Single Person. The pension is 1/80th of net
pensionable remuneration (as defined at 4 above) for each year of
service subject to a maximum of 40/80ths. This means that on
retirement with 40 years reckonable service the occupational pension
along with the State Pension amounts to one-half of pensionable
remuneration.
Effective from 1 January 2004, the formula for the calculation of
pension has been amended to: 1/200th of pensionable remuneration
up to less than 3 1/3rd times the State Pension, and 1/80th for

pensionable remuneration in excess of this limit.
The teachers schemes are also integrated. I haven't looked at the others but I'm pretty sure they have all moved to full prsi and integrated schemes.

The reason I split it out was to try to make it clearer what the private person has to fund for: both public and private get the 12K state pension; the private person has to fund 400K-600K to get an extra 20K pension whereas the public person builds this up as invisible wealth.

AlexisM

creedp wrote: »

It was about time to lash them pesky public servants again even if this is a Cyprus bailout thread - never pass up on an opportunity. Just don't forget also that the PS pay a 6.5% contribution for this fantastic gold plated unfunded pension

6.5% of what? It sure isn't 6.5% of salary.

creedp wrote: »

Now what about the wealthy who have been funding fantastic private pensions to the tune of 40% on the backs on the taxpayer for years.

I didn't mention building up 'wealth' in a pension scheme. Some people save for retirement outside pension schemes because they don't like the charges and/or can see that it is not tax relief but tax deferral.

creedp wrote: »

I would have though anyone with €500k sitting in a bank a/c could hardly be considered poor. Or are you arguing the opposite? In addition they didn't put that windfall together on the minimum wage now.

My point is that you consider someone with 500K in the bank to be wealthy and a fair target for a 40% smash and grab - without recognising that there is huge invisible wealth in a public sector pension which would remain untouched by the smash and grab. There was a calculation done a couple of years ago that showed that it would cost over €1M to provide a garda pension (it may have reduced to only several hundred thousand now) - yet that 'wealth' is not recognised by many.

creedp

AlexisM wrote: »

6.5% of what? It sure isn't 6.5% of salary.

What else is an employee pension contribution calculated on? I remenber seeing recently that Bank of Ireland staff only pay 2% of income towards their pension scheme.

I didn't mention building up 'wealth' in a pension scheme. Some people save for retirement outside pension schemes because they don't like the charges and/or can see that it is not tax relief but tax deferral.

You have no difficulty hammering one category of workers in Ireland who have a pension which they contribute to in the same way as any other worker who has an occupational pension scheme - they do exist you know! However, you choose to ignore another predominantly wealthy category of people who use tax subsidied private pension schemes to create pension windfalls for themselves. You're not very objective or impartial are you?

My point is that you consider someone with 500K in the bank to be wealthy and a fair target for a 40% smash and grab - without recognising that there is huge invisible wealth in a public sector pension which would remain untouched by the smash and grab. There was a calculation done a couple of years ago that showed that it would cost over €1M to provide a garda pension (it may have reduced to only several hundred thousand now) - yet that 'wealth' is not recognised by many.

My simple point is what the hell has a pension in Ireland got to do with the Cypriot bail-out. Open yet another thread on overinflated pay and pensions in the public sector if you wish!

By the way I did not say a 40% hit was fair if you look back I said it was incredibly harsh.

AlexisM

What else is an employee pension contribution calculated on?

Apologies - I assumed you knew what you were talking about as you knew the 6.5% rate. It's basically 3% of salary plus 3.5% of (salary minus twice the state pension amount). So someone on 30K pays 3.7% of salary (not 6.5%) and someone on 60K pays 5.1% of salary (not 6.5%)

My simple point is what the hell has a pension in Ireland got to do with the Cypriot bail-out. Open yet another thread on overinflated pay and pensions in the public sector if you wish!

The connection, if it's difficult to see, is that some posters are saying that having 500K in the bank is a sign of a wealthy person and therefore they are fair game to be taxed on this wealth. However, a significant portion of savings are by people saving prudently for retirement - so hitting these is unfair - particularly when a large group of people (the public sector) have similar 'wealth' but it is invisible. I don't think it's that hard a concept really but I shall desist if I am confusing people.

creedp

AlexisM wrote: »

Apologies - I assumed you knew what you were talking about as you knew the 6.5% rate. It's basically 3% of salary plus 3.5% of (salary minus twice the state pension amount). So someone on 30K pays 3.7% of salary (not 6.5%) and someone on 60K pays 5.1% of salary (not 6.5%)
The connection, if it's difficult to see, is that some posters are saying that having 500K in the bank is a sign of a wealthy person and therefore they are fair game to be taxed on this wealth. However, a significant portion of savings are by people saving prudently for retirement - so hitting these is unfair - particularly when a large group of people (the public sector) have similar 'wealth' but it is invisible. I don't think it's that hard a concept really but I shall desist if I am confusing people.

Are you talking about the PS in Cyprus? Why are you comparing apples with oranges? As far as I know someone with €500k here is not being affected by the Cyprus bail-out deal unless they have cash stashed in Cyprus to earn the higher that sustainable returns. If so then they took a risk! Christ its difficult enough to be constantly hammered by reference to the av €600 pw private sector worker with no pension but now the PS is being compared unfavourably to a Cypriot with €500k in the bank.

AlexisM

creedp wrote: »

Are you talking about the PS in Cyprus? Why are you comparing apples with oranges?

Have you actually been reading this thread? A lot of the recent discussion has been around a similar tax here, in Ireland - triggered by Godge's:

Godge wrote: »

A once-off wealth tax of 40%, now that is an interesting idea on how to pay off our debt. Say we applied it to property (other than the family home) as well as bank accounts, we could wipe out our debt overnight.

No more austerity for the ordinary guy without any wealth and the wealthy only lose 40% of what they own, still leaves them a lot.

The thread should maybe be split into 2 - one to discuss Cyprus and the other to discuss whether it could happen here, issues, problems, unfairnesses etc.

Scofflaw

Can't really be split, because not everybody was talking about the same thing - but discussion of Godge's idea could move to another thread, yes.

moderately,
Scofflaw

creedp

AlexisM wrote: »

Have you actually been reading this thread? A lot of the recent discussion has been around a similar tax here, in Ireland - triggered by Godge's:The thread should maybe be split into 2 - one to discuss Cyprus and the other to discuss whether it could happen here, issues, problems, unfairnesses etc.

To be fair the Cyprus deal is a fact of life for them .. Godges's proposal is fantasy in the extreme .. e.g. there is no way in hell that a certain big farmer is Meath will be paying over 40% of his asset value to the Govt to pay off the debts contributed to by the financial sector who for a large part reside in the IFSC - ah there's the connection - he's also chairman of the IFSC as well as in receipt of some of the most shiny platinum public sector penions going.

Of course ignore him and his wealthy cabal and instead focus on the Guards so called €1m pension pot. Much more interesting and likely to keep the discussion going for a lot longer.

antoobrien

creedp wrote: »

Of course ignore him and his wealthy cabal and instead focus on the Guards so called €1m pension pot. Much more interesting and likely to keep the discussion going for a lot longer.

creedp, that "pot" is accurate and consistent with the projections made in my pension scheme. A pre 95 PS worker gets 50% salary, post 95 28% + state pension (bringing it up to 50%, based on the examples cited in this doc).

Based in my current provisions (allowing for no further increases in salary) I can look forward to getting 21% salary - provided the ar*e doesn't fall out of the investments its based on.

Scofflaw

If this becomes a pro/anti PS thread, it gets closed.

moderately,
Scofflaw

creedp

antoobrien wrote: »

creedp, that "pot" is accurate and consistent with the projections made in my pension scheme. A pre 95 PS worker gets 50% salary, post 95 28% + state pension (bringing it up to 50%, based on the examples cited in this doc).

Based in my current provisions (allowing for no further increases in salary) I can look forward to getting 21% salary - provided the ar*e doesn't fall out of the investments its based on.

As I said earlier discussions around whether one penson is better than another are for another thread as they have little to do with the subject at hand. I have to say though if I were you I'd be looking to provide for my retirement using an alternative route as unless you are on very good money you'll qualify for the means tested pension the way your going.