Income Tax in Ireland

JD_PN17

The tax system in Ireland is long overdue a radical overhaul. Enough with the promised abolition of USC and now the possible merging of it with PRSI since Varadkar has been elected FG leader. There needs to be serious discussion about a straightforward and fair system which everyone pays towards and doesn't end up leaving a small section of society for paying for everything. I'm not advocating on letting the rich off with huge tax cuts and unfairly penalising the poor.

I'd propose doing away with the current tax system in it's current form entirely and starting from scratch. I'd completely do away with tax credits in their entirety, they complicate the system in my opinion and aren't fit for purpose. I'd propose putting in place one form of taxed charged on gross income, with each individual treated as a single tax unit doing away with the ability to lump a married/cohabiting couple as a single tax unit (no more tax benefits to marriage)

There'd be a simple four band system which is fair to all individuals. It'd be as follows;
~10% charged on the first €25,000
~30% charged on the next €25,000
~40% charged on the next €50,000
~50% charged on remaining income over €100,000

This is fair as nobody will pay more than .50c on each €1 earned. It also reduces the effective tax rate to below 50% and still ensures those who can pay more do, whilst introducing the lower paid into the tax system.

I've calculated with current projected figures that there will be c. 3.2 million individual tax units in Ireland in 2018 and under my proposal they would bring in c. €23.3 billion to revenue.

na1

With this system you'd have to make redundant many payroll people, not talking about revenue staff
Who would pay them the redundancy?)

Stheno

JD_PN17 wrote: »

I've calculated with current projected figures that there will be c. 3.2 million individual tax units in Ireland in 2018 and under my proposal they would bring in c. €23.3 billion to revenue.

Have you got a breakdown of your analysis?

Am I imagining things of did you have the same thread in the old cafe a few weeks ago?

Cookie_Monster

Stheno wrote: »

Am I imagining things of did you have the same thread in the old cafe a few weeks ago?

It sounds similar but slightly different.

anyway I don't believe the above go far enough. Ireland is still far too high a taxation country. Rather than constantly looking for any changes to remain cost neutral the expenditure side needs to be address as part of any tax reform.

On a very casual comparison basis, here in NZ income is taxed as follows:
From To Rate Euro Equiv
$- $14,000 10.5% € 9,000
$14,001 $48,000 17.5% € 30,800
$48,001 $70,000 30.0% € 45,000
$70,000+ 33.0%


Along with VAT being only 15% (on everything though)

Both of these are considered too high and moves have been made this year to increase bands and lower income tax burdens.
Australia is similar enough too but bands are bigger again, you have to earn over $180AUS to be on the top rate of 45%!

Geuze

Cookie_Monster wrote: »

Ireland is still far too high a taxation country.

Ireland is a low-to-middle tax country, all the data backs this up.

What is true is that the top MTR at 50% approx starts at a very low point, approx 32-34k. That is why people perceive Ireland as a high tax country, even though it isn't.

My parents earn 48k approx, and pay under 10% direct income taxes. This is very low compared to other countries.

A large amount of earners in Ireland pay zero direct taxes.

laugh

Leo the clown wants to reduce tax already with Brexit coming down the tracks, more social housing needed and our public services needing improvement.

Peregrinus

Cookie_Monster wrote: »

It sounds similar but slightly different.

anyway I don't believe the above go far enough. Ireland is still far too high a taxation country. Rather than constantly looking for any changes to remain cost neutral the expenditure side needs to be address as part of any tax reform.

On a very casual comparison basis, here in NZ income is taxed as follows:
From To Rate Euro Equiv
$- $14,000 10.5% € 9,000
$14,001 $48,000 17.5% € 30,800
$48,001 $70,000 30.0% € 45,000
$70,000+ 33.0%


Along with VAT being only 15% (on everything though)

Both of these are considered too high and moves have been made this year to increase bands and lower income tax burdens.
Australia is similar enough too but bands are bigger again, you have to earn over $180AUS to be on the top rate of 45%!

But taxes in New Zealand are, overall, a much higher burden than in Ireland. New Zealand taxes total 34.5% of GDP; Irish taxes total only 30.8%. So, if New Zealand income tax is lower, they more than make up for that with high taxes in other areas, e.g. property taxes, corporate taxes.

It may (or may not) be that the balance struck by New Zealand (or any other country) between income tax and other revenue sources is preferable to the one we strike. But I don't think it makes sense to point to another country's income tax laws and say "we should do something like that" without also addressing the corollary; we also have to consider the kind of things they do to make up revenue from other sources, and we have to address the social and economic policy implications of doing those things.

Pkiernan

laugh wrote: »

Leo the clown wants to reduce tax already with Brexit coming down the tracks, more social housing needed and our public services needing improvement.

Yeah..cos what the country really needs to do is tax workers more so layabouts can have more free stuff.

Idbatterim

http://www.independent.ie/business/irish/tax-cuts-for-hardworking-families-will-trump-social-welfare-hikes-varadkar-35876680.html

Tax cuts for hard-working families will trump social welfare increases in next year's budget, Taoiseach Leo Varadkar has indicated.
The Taoiseach is "determined" to find money for tax cuts in the next budget but is "not sure" if it will be possible to increase weekly payments for people with disabilities and carers.

why should there be welfare increases? to worldclass welfare rates. Maybe they have finally found some backbone. This bull**** of "shure we are all in this together, a great bunch of lads. Heres a few euro everyone" Get stuffed. Welfare should be frozen for years, its payback time for the workers, not the work shy.

Id be up for total welfare reform, but politically it probably wont be touched. So freeze it for years, I proposed this many times on boards...

Jack up property tax too. Taking more out of the tax net is idiotic. They should do something about the cost of living. Taxing income at outrageous rates from an extremely low level, is idiotic to the extreme!

Marcusm

Peregrinus wrote: »

But taxes in New Zealand are, overall, a much higher burden than in Ireland. New Zealand taxes total 34.5% of GDP; Irish taxes total only 30.8%. So, if New Zealand income tax is lower, they more than make up for that with high taxes in other areas, e.g. property taxes, corporate taxes.

It may (or may not) be that the balance struck by New Zealand (or any other country) between income tax and other revenue sources is preferable to the one we strike. But I don't think it makes sense to point to another country's income tax laws and say "we should do something like that" without also addressing the corollary; we also have to consider the kind of things they do to make up revenue from other sources, and we have to address the social and economic policy implications of doing those things.

Irish GDP is not a meaningful measure; take for example, the debt/GDP ratio which is now dramatically reducing. We still have the world's second highest indebtedness per capita in the world. That's not sustainable as we do not have a meaningful basis to tax much of "our" GDP.

Jawgap

Geuze wrote: »

Ireland is a low-to-middle tax country, all the data backs this up.

What is true is that the top MTR at 50% approx starts at a very low point, approx 32-34k. That is why people perceive Ireland as a high tax country, even though it isn't.

My parents earn 48k approx, and pay under 10% direct income taxes. This is very low compared to other countries.

A large amount of earners in Ireland pay zero direct taxes.

Sorry, but this just isn't true.

I'm in a PAYE position but I also do external work so have to submit a self-assessed return. Meaning I have paid most of my tax for the previous year before I calculate what's due on the extra income......

......I've just done my assessment for 2016 and - again - I find myself handing over 54% of what I earned to the government. If there's no incentive to go out and earn that extra Euro then the tax in the country is too high, imo.

.....and before anyone asks, this is contract work I committed to before realising how much it costs in tax......it's certainly not something I'll be perpetuating once the current contracts expire.

wordofwarning

Geuze wrote: »

Ireland is a low-to-middle tax country, all the data backs this up.

That is why people perceive Ireland as a high tax country, even though it isn't.

My parents earn 48k approx, and pay under 10% direct income taxes. This is very low compared to other countries.

A large amount of earners in Ireland pay zero direct taxes.

Ireland is a low tax country, if you are a low to median income earner. We have a highly progressive tax system. The people at the top pay most of the tax in the country. The top 10% pay around 70% of the income tax in Ireland

Capital Gains Tax in Ireland is among the highest in the developed world with a very low yearly allowance. We have very low threshold for inheritance (one of the lowest in the world)

Most people perceiver Ireland to be low tax country, as they are not paying tax. Go to Ballsbridge, Clontarf, Malahide etc and ask the residents what it is like to live in a low tax country. I think you know what the response will be...

Royale with Cheese

Jawgap wrote: »

Sorry, but this just isn't true.

I'm in a PAYE position but I also do external work so have to submit a self-assessed return. Meaning I have paid most of my tax for the previous year before I calculate what's due on the extra income......

......I've just done my assessment for 2016 and - again - I find myself handing over 54% of what I earned to the government. If there's no incentive to go out and earn that extra Euro then the tax in the country is too high, imo.

.....and before anyone asks, this is contract work I committed to before realising how much it costs in tax......it's certainly not something I'll be perpetuating once the current contracts expire.

You've low incentive to do extra work at the high end, with every extra euro you earn being taxed at 52%. You've low incentive to go out and work at the low end, with low paying jobs leaving you barely better off than being on welfare in a lot of situations. That right there is a total clusterfúck.

Idbatterim

I just read a article highlighting the shambolic tax system here. Good article, can't find link now though. There should be no more USC cuts or workers taken out of tax net. The issue isn't in that end. They want to raise the threshold at which you pay the outrageous rate. That missing the point. Taxing income a tax the rate of 51% is the major issue! I think it should be around 35% or so. From maybe 35-70k or thereabouts. Significant, but not enough to do stop people taking hours, extra work etc. I think any rate over 45% is taoimgbthe absolute piss regardless of income

Hollister11

Honestly, as someone else said in the thread. There should be no social welfare increases in this country.

If I remember correctly the figure spent on social welfare is €20B each year. Thats insane. It's entirely feasible to slash that by 20%. That could be redirected to tax decreases.

Another advantage is that people who suddenly need money, will actually work for it now, and contribute back to the tax base. So less payouts, and more revenue for the government.

There's a man who is 40 living on the road she grew up on. He was never worked a day in his life, he has received the dole since he left school at 17. He has inherited' his parents council house where he pays feck all rent. This is a 3 bed semi in a nice part of Dublin for a single man. There's families that need this.

He has spent the last 5 years doing his junior, leaving cert, and mickey mouse course just so he can keep his benefits.

Hollister11

Idbatterim wrote: »

I just read a article highlighting the shambolic tax system here. Good article, can't find link now though. There should be no more USC cuts or workers taken out of tax net. The issue isn't in that end. They want to raise the threshold at which you pay the outrageous rate. That missing the point. Taxing income a tax the rate of 51% is the major issue! I think it should be around 35% or so. From maybe 35-70k or thereabouts. Significant, but not enough to do stop people taking hours, extra work etc. I think any rate over 45% is taoimgbthe absolute piss regardless of income

A max of 35% would be fair game.

You always get people saying "The rich should pay more". The fact is they do, alot more, it's just at the same rate as you.

Idbatterim

Yeah. See the issue with ridiculous welfare rates and outrageous rates of tax on low income i.e. 34k creates a multitude of problems. I believe the welfare bill is 23 billion!!! I'd take an extra to it. But for political reasons that won't happen. But not raising rates isn't that contentious and should be done. I think people being squeezed more and more here are finally running out of patience. Good!

Idbatterim

http://www.newstalk.com/The-case-for-raising-the-income-tax-threshold

Yourself isit

Hollister11 wrote: »

A max of 35% would be fair game.

You always get people saying "The rich should pay more". The fact is they do, alot more, it's just at the same rate as you.

The actual rich often pay a lot less. Income tax is really a wage tax.

MayoSalmon

Yourself isit wrote:

The actual rich often pay a lot less. Income tax is really a wage tax.

Firstly define your definition of "rich" and explain how they in any way pay less tax than the majority of Irish citizens.

TheDoc

Many independent assessments label Ireland as having one of the most progressive systems in the OECD.

37% of our workforce is exempt from income tax.
A small portion of high income tax payers, account for over 55% of our income tax revenue.
The rest is made up by the middle.

So those on low incomes pay nothing or little to nothing. As you move up you pay more, and at the top you pay the most.

It's subjectively twisted by politics and opinion, but assessments are pretty clear on our tax system. Just like during the recession how politicians of a certain demographic would paint how the lower income earners were carrying the country through, well no, they weren't. The high income tax payers and upper part of the middle carried the country through the recession when it comes to income tax take.

I always refer back to this, and how it caused so many politcians, groups, lobbyist groups etc. to just lose their **** because it went against the narrative that it was X being hit hardest by austerity or the recession

http://www.ibec.ie/IBEC/Press/PressPublicationsdoclib3.nsf/vPages/Newsroom~new-ibec-report-debunking-irish-income-tax-myths-29-09-2014/$file/Debunking+Irish+income+tax+myths.pdf

Other assestments, some independant some not, all point to the same things. The system at a core is very progressive and suitable, but the short term Government attachments and promise givings have made it a bit bloated, convaluted, and have put fat on what was and still is a pretty decent system.

What really is required is a bit of trimming, and a long term strategy, not jumping from government to government to buy votes, which in fairness, is here for the long haul most likely.

Idbatterim

37% of our workforce is exempt from income tax.
A small portion of high income tax payers, account for over 55% of our income tax revenue.
The rest is made up by the middle.

there are big issues with having so many contribute so little and annihilating lowish to mid income earners with a 51% rate. Its such an outrageous rate as so low a figure, that I reckon economically it does a lot of damage to job creation, hours turned down, promotions not taken, extra hours worked, taken as time in lieu instead of overtime. People you actually want to stay in the country leaving or those who have valuable skills not returning home..

the problem is due to politics, it will never be sorted out properly. But this might be a middle ground, simply cut the marginal rate, even if 1% a year over the next 5 years. And yeah so what if it doesn't benefit low low income workers, even if it benefits low income workers on a portion of their salary from 34k+, great! which is what E34k is, or the higher earners, they are they ones being bled dry. They should be first in line for tax cuts. Of course when you have say 1 high earner, (say 100,000k plus) for every "high earner" there are 99 more votes to be won by taking out more of those people from the tax net that contribute virtually nothing. Increased propery taxes, when the review is carried out in 2019, should be used to lower marginal rate, invest in infrastructure and pay down debt...

Beta Ray Bill

JD_PN17 wrote: »

The tax system in Ireland is long overdue a radical overhaul. Enough with the promised abolition of USC and now the possible merging of it with PRSI since Varadkar has been elected FG leader.

Just to add

FG has back peddled on the most hated of all taxes USC.

It's going to be merged with PRSI...

Geuze wrote: »

Ireland is a low-to-middle tax country, all the data backs this up.

I'm in complete disagreement with you, we are very heavily taxed in this country, especially if you are a PAYE worker.
It's the "Stealth" taxes, which make our taxation level so high.
I define a "Tax" as Charge I have no choice on paying where the money goes to the state , a semi state body or a body nominated by the state.

So when you include:
Income Tax
VAT
USC
PRSI
VRT
Capital Gains Tax
DIRT
Household Charge
Motor Tax -- A Car is a necessity for me,
Heavy duty on items like Fuel
Levies on Insurance
Bin and Water charges (These should really be covered by the housing charge I'm now paying)
Tolls on Motorways (These should really be covered by Motor Tax)
Health Insurance Tax/Levy I'll have to pay if I ever go without health insurance for a period of time.

Also in relation to that we get very little for our tax in this country.
Infrastructure Infrastructure and Services are poor.

I do agree with the OP though, the Tax system needs a huge overhaul. It is defo not fit for purpose.
I think a better plan of action though would be to investigate where the Tax is actually going?

I'd imagines a huge portion of it is going on Social Welfare.
If they could curtail that we'd all have to pay less.

Idbatterim

Household Charge
Motor Tax -- A Car is a necessity for me,
Heavy duty on items like Fuel
Levies on Insurance
Bin and Water charges

this is part of the problem, there is no serious household charge, no water charges. Other countries have both of them at reasonable levels. the world class welfare system here. 3 things that most other countries don't have. so income at mid - and in particularly higher level here, is taxed at penal and immoral rates and those citizens bent over backwards!

I do agree with the OP though, the Tax system needs a huge overhaul. It is defo not fit for purpose.
I think a better plan of action though would be to investigate where the Tax is actually going? I'd imagines a huge portion of it is going on Social Welfare.
If they could curtail that we'd all have to pay less.

I totally agree, I would radically reform it , but this is Ireland. At best you could hope for it to be frozen for years like I have long suggested. It should be literal pay back time now for certain workers! Wait for it (welfare) to be increased again this year, several hundred million more that could be used to reward the hard working, infrastructure, debt repayment!

na1

You forgot to mention FIS & child benefits: the single earner family (with a  wage around 22-25k) with 2 children pay NEGATIVE tax.
So effectively they take more than contribute.

For Reals

na1 wrote: »

You forgot to mention FIS & child benefits: the single earner family (with a  wage around 22-25k) with 2 children pay NEGATIVE tax.
So effectively they take more than contribute.

That's because the system is so poorly designed even some working people need a dig out just to make it through the week. If we tackled why there is a need in the first place it might work out great for everyone.
Like many areas of poor management of the state it's all too often answered by throwing tax money at it to 'fix' any short comings.

The announcement of a tax break for the top 11% is a good one.

Yourself isit

MayoSalmon wrote: »

Firstly define your definition of "rich" and explain how they in any way pay less tax than the majority of Irish citizens.

You can't think of somebody off hand who is a multi millionaire or a billionaire paying 0%?

If you are rich and paying 51% you have a very bad accountant.

MayoSalmon

Yourself isit wrote:

If you are rich and paying 51% you have a very bad accountant.

Yourself isit wrote:

You can't think of somebody off hand who is a multi millionaire or a billionaire paying 0%?

So multi millionaire is rich in your eyes and also because the tax code will allow them to somehow to pay under 51% that's their fault?!

Think you need to take your issue up with the government and not the capitalist

chicorytip

Geuze wrote:

A large amount of earners in Ireland pay zero direct taxes.

Yes, such as those earning the minimum wage.
Why should they be exempted from paying income tax?

Beta Ray Bill

chicorytip wrote: »

Yes, such as those earning the minimum wage.
Why should they be exempted from paying income tax?

I believe this is correct

Even if you're on min wage you should be paying tax (People on min wage are paying tax now via USC right?). IE you should be contributing.

But on the broad scale of it, if you're a low earner with a few kids or a very wealthy person, the chances are you pay very little tax relative to what you earn.

If you're a PAYE person earning anything over €45k PA, you may bring your vaseline and assume the position. Cause the tax man is going to hockey you.
The Gas thing is, that it's these people that are keeping the country afloat and they get no recognition for it.
Each time a new Tax is introduced, it's these people that are hit hardest by it.

Also from my previous post I forgot about the following Taxes:
TV Tax (TV Licence)
Inheritance Tax

Idbatterim

I watched renua tax policy video the other day, it mentions the total lack of recognition for those here picking up the tab for everything. I then read a piece by Willie O'Dea in todays irish independent, wants to hike up all forms of welfare again. FG are far from perfect, but FF need to be kept as the junior party, FG are the lesser of two evils by a long shot. I really hope Renua win a few seats...

fliball123

Its amazing how they have targetted the middle and higher tax payer..No one should be paying more than 40% of their earnings to the tax man.

Its also mad when you think that those on the lower end get a lot of freebies that those earning a bit more dont, dental, medical, etc.

Also if the USC is being kept why are paycuts for public sector workers not being kept. I find that very unfair.

For Reals

fliball123 wrote: »

Its amazing how they have targetted the middle and higher tax payer..No one should be paying more than 40% of their earnings to the tax man.

Its also mad when you think that those on the lower end get a lot of freebies that those earning a bit more dont, dental, medical, etc.

Also if the USC is being kept why are paycuts for public sector workers not being kept. I find that very unfair.

I agree with you.
As regards 'freebies'; this is the system we have. We need state aide so private business can maintain profits. It's wrong IMO, but our system is designed to stick it to the tax payer in favour or private profit, yes those people mostly pay tax too, but this set up is why we've a housing crisis, poverty crisis, people needing 'freebies' etc.
I want to charge you as much as I can. You can't afford it. The state gives you tax funded aide so you can pay me. You survive, I make profit. That's the Fine Gael way.

markodaly

For Reals wrote: »

I agree with you.
As regards 'freebies'; this is the system we have. We need state aide so private business can maintain profits. It's wrong IMO, but our system is designed to stick it to the tax payer in favour or private profit, yes those people mostly pay tax too, but this set up is why we've a housing crisis, poverty crisis, people needing 'freebies' etc.
I want to charge you as much as I can. You can't afford it. The state gives you tax funded aide so you can pay me. You survive, I make profit. That's the Fine Gael way.

Can you elaborate on your notion that the tax system is designed to help private businesses as I think you are making it up by just trying to have the usual dig at FG.

The tax system is designed to fund public services first and foremost, that is the whole concept of tax, to pay for services like health, education, old age pensions and so forth. If you can show that a sizeable % of tax money goes to private business on a yearly basis by all means show us.

For Reals

markodaly wrote: »

Can you elaborate on your notion that the tax system is designed to help private businesses as I think you are making it up by just trying to have the usual dig at FG.

The tax system is designed to fund public services first and foremost, that is the whole concept of tax, to pay for services like health, education, old age pensions and so forth. If you can show that a sizeable % of tax money goes to private business on a yearly basis by all means show us.

I see you're in to defend the government and a way of doing business Kenny himself derided and believed flawed.
You are describing what tax is. I agree that's what tax is.

Tax relief for land lords, rent allowance for renters, grants and subsidies for the sale/purchase of homes, emergency accommodation for people the system fails, state aid for those living in poverty, state aide for those working whose salary isn't sufficient. All funded by the tax payer. All designed to keep a system, proven not fit for purpose, afloat. That's how our system, funded by our tax is set up and operates.
The ironic thing is, if not for welfare/various tax funded state aide, the arse would fall out of the whole shebang. Eventually they'll be another crash of course, but they are par for the course.

markodaly

For Reals wrote: »

I see you're in to defend the government and a way of doing business Kenny himself derided and believed flawed.

Excuse me but stop putting words into my mouth. I never mentioned Kenny in my previous post so spare me the poor character assassination attempt. Lets stick with the topic at hand shall we that is Taxation in Ireland rather then wade into the usual all encompassing negativity that you like to engage in.

For Reals wrote: »

You are describing what tax is. I agree that's what tax is.

Good, we are agreed on that then, so in essence you perform a u-turn from your previous post.

For Reals wrote: »

Tax relief for land lords,

What tax relief specifically as I can tell you from experience landlords get very little tax relief.

For Reals wrote: »

rent allowance for renters,

By all means advocate for removing rent allowance. You will have the poverty/misery lobby out in force the minute this would be suggested. Oh, we are not alone in the EU by paying rent allowance.

For Reals wrote: »

grants and subsidies for the sale/purchase of homes,

Say what? What grants/subsidies are these that a buyer can avail off. Are you talking about the first buyers grant that was brought in the last budget and looks to be scraped fairly soonish?

For Reals wrote: »

emergency accommodation for people the system fails,

Agreed that its a waste but you have to look at local authorities really as its under their remit mostly.

For Reals wrote: »

state aid for those living in poverty,

You mean social welfare? Something every OECD country has. Are you advocating scraping social welfare, if not what exactly are you saying?

For Reals wrote: »

state aide for those working whose salary isn't sufficient.

You mean people who work and pay no income tax? The same people who refuse to pay for water, which you also agree with. That is the problem with your theories, you get tied up in knots sooner or later.

For Reals wrote: »

All funded by the tax payer. All designed to keep a system, proven not fit for purpose, afloat. That's how our system, funded by our tax is set up and operates.

Correct to some extent, the system needs reform but those at the bottom end would more the likely start paying more tax as per European norms. I presume you would be against this also.

For Reals wrote: »

The ironic thing is, if not for welfare/various tax funded state aide, the arse would fall out of the whole shebang. Eventually they'll be another crash of course, but they are par for the course.

So in other words your grand statement that "We need state aide so private business can maintain profits" or "our system is designed to stick it to the tax payer in favour or private profit" has no basis for being correct as you have not shown one iota of evidence to back up this claim. Thought as much.

For Reals

I was responding to a comment about freebies and I'm saying the state needs freebies by way of tax to function.
You stated what tax is and I agree. How it's used by differing governments is another thing.

I want to charge you as much as I can. You can't afford it. The state gives you tax funded aide so you can pay me. You survive, I make profit.

Explained it quite plainly. You can't afford a house? tax payer. You can't afford rent? tax payer, and so on and so on, while the landlord and developer charge what they like. Not getting paid enough? tax payer. To maintain private business profit margins; tax payer.

As to how it's currently used? Housing/health/poverty crises, state aid needed to function. You tell me?
Is the reduction for the top 11% helping or hindering?

PeadarCo

For Reals wrote:

Explained it quite plainly. You can't afford a house? tax payer. You can't afford rent? tax payer, and so on and so on, while the landlord and developer charge what they like. Not getting paid enough? tax payer. To maintain private business profit margins; tax payer.

You do understand people have to be paid to work that means they have to make a profit unless you want us all to work for nothing. Your analysis of the housing situation is very simplistic. The reason we have a housing issue in certain part of the country is one they take time to build two you need certain skill sets(bricklayers, plumbers etc) that take time to train up, three you need to get planning permission ( locals may object to new houses), four new central bank rules while keeping control of house prices also make it harder for people to buy and force them to rent longer,five you've alot of people looking for houses in a relatively small area six alot of the developers who know how to manage large projects either went bust and or are far more cautious about big new developments. There are probably even more that some one who works in the area could point out.

Blaming tax rates and headline rents and house prices is only looking at the symptoms. Tinkering around with income tax rates and allowable expenses isn't going to sort out the housing problems we have.

For Reals

PeadarCo wrote: »

You do understand people have to be paid to work that means they have to make a profit unless you want us all to work for nothing. Your analysis of the housing situation is very simplistic. The reason we have a housing issue in certain part of the country is one they take time to build two you need certain skill sets(bricklayers, plumbers etc) that take time to train up, three you need to get planning permission ( locals may object to new houses), four new central bank rules while keeping control of house prices also make it harder for people to buy and force them to rent longer,five you've alot of people looking for houses in a relatively small area six alot of the developers who know how to manage large projects either went bust and or are far more cautious about big new developments. There are probably even more that some one who works in the area could point out.

Blaming tax rates and headline rents and house prices is only looking at the symptoms. Tinkering around with income tax rates and allowable expenses isn't going to sort out the housing problems we have.

My point is tax payer monies are used for the shortfall of our faux 'free' market economy. We are essentially socialism in reverse. The tax take is distributed to ensure profit margins remain propped up.
If you can't afford what I'm selling I need lower my price or my business goes to the wall. We need address how we function, why things cost so much and some people are making too little. But what we do is look to the tax take. You can't afford what I'm selling, either I get tax money to help me lower my pricing or you get tax money or a break to help you buy it. Tell me that's not how it works a lot of the time? My key point is people whinge about welfare/subsidies/rent allowance etc., fine, but the system we have would fall apart and not because 'dem that won't work are lazy' but because we can't function without it.
That's how tax is used, aside from the remaining costs of things Fine Gael/Fianna Fail haven't privatised or created a separate charge for.
Yes councils play a roll, this is the system we have, led top down. Kenny was on about a new way of doing business, calling it out pre 2011, but we don't talk about that now.
Here's Leo with a tax break for the top tier 11%. Maybe they do deserve a tax break, fair play, but let's not peddle it like some kind of fix to anything.

PeadarCo

For Reals wrote:

My point is tax payer monies are used for the shortfall of our faux 'free' market economy. We are essentially socialism in reverse. The tax take is distributed to ensure profit margins remain propped up. If you can't afford what I'm selling I need lower my price or my business goes to the wall. We need address how we function, why things cost so much and some people are making too little. But what we do is look to the tax take. You can't afford what I'm selling, either I get tax money to help me lower my pricing or you get tax money or a break to help you buy it. Tell me that's not how it works a lot of the time? My key point is people whinge about welfare/subsidies/rent allowance etc., fine, but the system we have would fall apart and not because 'dem that won't work are lazy' but because we can't function without it. That's how tax is used, aside from the remaining costs of things Fine Gael/Fianna Fail haven't privatised or created a separate charge for. Yes councils play a roll, this is the system we have, led top down. Kenny was on about a new way of doing business, calling it out pre 2011, but we don't talk about that now. Here's Leo with a tax break for the top tier 11%. Maybe they do deserve a tax break, fair play, but let's not peddle it like some kind of fix to anything.

Do you have any evidence specifically in terms of tax rates being used to bailout people. Actually one of the things that happened after the crash was alot of reliefs relating to property were removed. There was particular disquiet over the removal of Section 310 relief.( Forget the exact number of the Section). It was a key part of a lot of developers/landlords business plans. Its removal didn't exactly help struggling landlords and developers who were facing issues selling and renting houses. Some tax experts at the time it had elements of retrospective law in it because it was so unusual for governments to bring in long term tax reliefs and then suddenly pull them.From memory the amount of interest allowable in relation to houses was also reduced to 75% all in an effort to increase the tax take. Based on that after the crash the government at least in terms of the income tax laws didn't give a dam about landlords or developers. It was quite naturally looking to increase the tax take.

Could you list the changes in the income tax system that you feel were designed to help bailout developers.

Edit - app mutiquote function mistake sorry Oscarbravo

For Reals

PeadarCo wrote: »

Do you have any evidence specifically in terms of tax rates being used to bailout people. Actually one of the things that happened after the crash was alot of reliefs relating to property were removed. There was particular disquiet over the removal of Section 310 relief.( Forget the exact number of the Section). It was a key part of a lot of developers/landlords business plans. Its removal didn't exactly help struggling landlords and developers who were facing issues selling and renting houses. Some tax experts at the time it had elements of retrospective law in it because it was so unusual for governments to bring in long term tax reliefs and then suddenly pull them.From memory the amount of interest allowable in relation to houses was also reduced to 75% all in an effort to increase the tax take. Based on that after the crash the government at least in terms of the income tax laws didn't give a dam about landlords or developers. It was quite naturally looking to increase the tax take.

Could you list the changes in the income tax system that you feel were designed to help bailout developers.

Edit - app mutiquote function mistake sorry Oscarbravo

I'm responding to the idea of 'Freebies'. If we didn't have tax payer funded aid, the mechanics of our economy would break down as it doesn't work without 'freebies'.
People can't afford product, some can't afford to create; without tax payer monies.
As regards housing, are you unaware of the tax funded sweetners for selling, renting, buying?:

Revealed: Homebuyers race for deals as €20,000 grant faces axe
http://www.independent.ie/business/personal-finance/property-mortgages/revealed-homebuyers-race-for-deals-as-20000-grant-faces-axe-35744370.html

Government to change first-time buyers scheme
https://www.irishtimes.com/news/politics/government-to-change-first-time-buyers-scheme-1.2835860

Penny finally drops for Fine Gael as rent supplement limits rise
http://www.independent.ie/business/personal-finance/property-mortgages/penny-finally-drops-for-fine-gael-as-rent-supplement-limits-rise-34842150.html

Rent supplement increase is good news only for landlords
http://www.irishexaminer.com/ireland/rent-supplement-increase-is-good-news-only-for-landlords-407431.html

Tax Relief for Landlords: Fine Gael has reintroduced
enhanced tax relief for landlords who accept rent
supplement and HAP tenants and will maintain this in
a second term of government, in order to incentivise
landlords to take rent supplement and HAP tenants.
https://www.tcd.ie/Political_Science/staff/michael_gallagher/Manifestos2016/FGManifesto16.pdf

Again, I'm responding to 'freebies'. Rather than looking to the poorest to gripe at while giving a nod to tax relief for the top 11%, would it not serve everyone, equally well, if we started looking at why things are the way they are rather than balancing tax take with populist vote winners? The current way of doing business has failed and is failing.

PeadarCo

For Reals wrote:

Again, I'm responding to 'freebies'. Rather than looking to the poorest to gripe at while giving a nod to tax relief for the top 11%, would it not serve everyone, equally well, if we started looking at why things are the way they are rather than balancing tax take with populist vote winners? The current way of doing business has failed and is failing.

Alot of what your describing is a good idea. The home buyers belief was a stupid idea in the first place all it did was increase prices. I know people who work in taxation and they said the minute it was brought in prices immediately increased to take account of it. Again primarily due to lack of supply.

In terms of landlords we don't have enough. We need more particularly as we have a central bank that has learnt something from the bust. But it does mean that it will take longer for people to be in a position to buy a house. With landlords though I don't have an issue with increased reliefs. In terms of taxation rent is Case V income and classed differently to Case I/II. That distinction isn't academic. Different rules apply to different classes of income. Rent is tends to taxed more/less room for maneuver in terms of allowable expenses. Even though the issue with the rental market for landlords is the crap regulatory system the same goes for good tenants when dealing with bad landlords. The increased use of Air B&B is a case in point

I'd agree that increased incentives in terms of the various schemes for landlords is a bad idea pretty much for the same reason the first time home buyers relief is a bad idea. Lack of supply. Landlords have a valuable asset and will pick the most low risk tenants they can pick which as a tenant myself I can understand.

I don't really understand why your so hung up on the income tax system and the housing crisis. While it obviously has an impact on people's motivations the issues in my opinion are not due primarily to the taxation system.

For Reals

Just using grants etc. re: housing as an example of our tax money at work. An industry artificially propped up by the tax payer, IMO.

Basically the idea of giving someone on welfare a fiver increase should no more stick in the craw of the tax payer than all these subsidies, grants, tax relief etc. given under the guise of helping us all at the end of the day, when it's obviously not.

Our system of taxation feeds how we operate. Hence populist tax relief, attempting to cook the books with charges and so on. It's beyond Fine Gael. Each new government seems to just tinker to suit their own agenda.

PeadarCo

For Reals wrote:

Just using grants etc. re: housing as an example of our tax money at work. An industry artificially propped up by the tax payer, IMO.

I think the issue is more basic. The reason grants are used because its a very visible way of showing the public the government is doing something. Whether what they are doing works I. don't think matter as it gives them an answer when dealing with critics.

The housing industry in areas like Dublin isn't being propped up by the government. They might get extra money as an unintended consequence but if the developers need government support in the current market they will go bankrupt when the next recession hits.


Long-term solutions take longer to have an impact and as a result politicians risk not being rewarded. That's an issue for the voting public who want instant results.

But all this stuff is off topic and I won't be commenting on it any more in this thread.

markodaly

For Reals wrote: »

I was responding to a comment about freebies and I'm saying the state needs freebies by way of tax to function.

No, you clearly stated that the tax system was primarily a way to enrich and profit private enterprises. Something when called on you cannot back up.

Explained it quite plainly. You can't afford a house? tax payer. You can't afford rent? tax payer, and so on and so on, while the landlord and developer charge what they like. Not getting paid enough? tax payer. To maintain private business profit margins; tax payer.

You seem awfully confused, first of all there are now rules to what landlords can charge in terms of rental increases. Secondly, a developer cannot charge what they want for a house, if they did they would be flooding into the market to make loads of money like the Celtic Tiger. Central bank rules are seeing to this. Your simplistic view on problems that are often complicated and multi faceted is rather amusing.

Lastly, if a citizen cannot afford a house, or rent or are in a vulnerable state, the tax payer is there to bail them out. It is called a social safety net, something that is common the world over, well in the west anyway. It is the same in Germany, Sweden, Norway and so on. Do you write these countries off as well because they have a social safety net?

Is the reduction for the top 11% helping or hindering?

I would argue it will help, as if you have more high earners in the tax net you will increase the overall tax take. There is a well documented issue in attracting top talent in Dublin. Even nurses who by and large would be paying the top marginal rate do the math and say that they are better off in the UK, Dubai or elsewhere. It feels good of course to look at all these top earners of some cigar smoking vulture capitalist, but often they are they ordinary people like nurses.

markodaly

For Reals wrote: »

My point is tax payer monies are used for the shortfall of our faux 'free' market economy. We are essentially socialism in reverse. The tax take is distributed to ensure profit margins remain propped up.

How does the 20 plus billion distributed in the Dept of Social Welfare ensure that profit margins are propped up. How about the Dept. of Education and its 10 Billion or the Dept. of Health and its 18 Billion ensure profit margins are propped up?

For Reals

markodaly wrote: »

How does the 20 plus billion distributed in the Dept of Social Welfare ensure that profit margins are propped up. How about the Dept. of Education and its 10 Billion or the Dept. of Health and its 18 Billion ensure profit margins are propped up?

You missed the mark. We use tax to keep profits high for developers for one. You can't afford a house, there's possibly a grant. You can't afford rent, theres possible an allowance.
Not just welfare, grant, subsidies. I'll not repeat myself. Feel free to read back it's all there.

How does a tax break for the top 11% increase our tax take exactly?
As for attracting top talent, we need homes and hospital beds ffs. Rising povery and you want to concern yourself with drawing in CEO's or some ****e?

fliball123

For Reals wrote: »

You missed the mark. We use tax to keep profits high for developers for one. You can't afford a house, there's possibly a grant. You can't afford rent, theres possible an allowance.
Not just welfare, grant, subsidies. I'll not repeat myself. Feel free to read back it's all there.

How does a tax break for the top 11% increase our tax take exactly?
As for attracting top talent, we need homes and hospital beds ffs. Rising povery and you want to concern yourself with drawing in CEO's or some ****e?

You are looking at this and blaming a different set of people..you think its the richie righties and the other lad think its the loonie lefties..When if effect the middle class is squeezed for both sets to be propped up..Something that cant continue and the tax break is needed as there are good % of people who when they hit 33k odd in this county are paying through the nose for things and it cant continue. You may say we are low tax but when you bring in the stealth charges and back hands taxes we are not low tax in fact we pay a very high level of tax . The average worker in the country pays a lot of money for a p1ss poor return and in there lies the problem. We cant now take the life support away for the lefties and we are being raped by the public sector unions to pay overly generous pay and pensions and neither of these are going to be tackled. So any decrease in tax from the worker is welcome and more tax cuts are needed.

For Reals

fliball123 wrote: »

You are looking at this and blaming a different set of people..you think its the richie righties and the other lad think its the loonie lefties..When if effect the middle class is squeezed for both sets to be propped up..Something that cant continue and the tax break is needed as there are good % of people who when they hit 33k odd in this county are paying through the nose for things and it cant continue. You may say we are low tax but when you bring in the stealth charges and back hands taxes we are not low tax in fact we pay a very high level of tax . The average worker in the country pays a lot of money for a p1ss poor return and in there lies the problem. We cant now take the life support away for the lefties and we are being raped by the public sector unions to pay overly generous pay and pensions and neither of these are going to be tackled. So any decrease in tax from the worker is welcome and more tax cuts are needed.

You are mistaken. It seems we are in agreement.
It's just other posters are intent on making it an us/them scenario that way they've a defection. The 'loonie lefties' are on 4%, odd to make them a go to.
The answer for example is neither scrapping unions or bowing down to them. Unions are needed as long as we've employers naturally only interested in profits. The system as it stands requires we pay out 'freebies' to those unable to make it from one end of the week to another, even with a job. We need eliminate the need for that. Some people working full time can't afford rents, can't afford to buy a house. Looking to the tax payer should be a stop gap measure not par for the course.

markodaly

For Reals wrote: »

You missed the mark. We use tax to keep profits high for developers for one. You can't afford a house, there's possibly a grant. You can't afford rent, theres possible an allowance.
Not just welfare, grant, subsidies. I'll not repeat myself. Feel free to read back it's all there.

So, again for the 3rd time of asking no actual evidence to back up your claim. Fair enough.

The first time buyers grant from what I remember will cost the exchequer 50 million. Not to be sneezed at but in comparison to say the total Education budget of over 10 Billion well you can see how your claim falls apart. Your repeated assertion does not hold up to scrutiny.

How does the 10 Billion euro the tax payer put into Education prop up profit for private companies. Its a simple enough question. One you cannot or will not an answer and just repeat your claim again as if repeating it somehow validates it.

How does a tax break for the top 11% increase our tax take exactly?
As for attracting top talent, we need homes and hospital beds ffs. Rising povery and you want to concern yourself with drawing in CEO's or some ****e?

I see your still playing the whole, everything in Ireland is crap, game

As to your question, how does a tax break for the top 11% increase our tax take, I take it you have never heard of the laffer curve? A more real world example would be the reduction of VAT for the hospitality industry, which has been a roaring success, or perhaps the reduction of the travel levy in Dublin Airport which in turn increased passenger foot fall. This is well documented. Decreaseing levies, tarrifs, prices can in the real world incraese the overall income from levies and tarrifs if done correctly.

A reduction of the top marginal rate of tax would in turn, increase the desirability of Dublin for professionals as a place to live. This is very important in the world of Brexit when there are tens of thousands of high paying jobs at play. It is also important to attract the professionals who have left Ireland over the past number of years to bring them back into the working economy.

The INMO have been very vocal and concerned with Irish nurses leaving over seas where it is almost impossible to fill vacancies. The HSE and Dept of Health have also acknowledged this problem. Cutting the top rate of tax will help a little in this regard.

http://www.independent.ie/irish-news/health/inmo-delays-pay-stance-amid-concern-over-recruitment-of-nurses-35882606.html

Again, not everyone on the top rate of tax is some cigar smoking CEO or venture capitalist, that is just nonsense I am afraid, a notion of propaganda.

markodaly

fliball123 wrote: »

The average worker in the country pays a lot of money for a p1ss poor return and in there lies the problem. .

This is arguably the most salient point of the entire thread. Why is it that we get poor value of return? Even ardent populists and leftists would agree with this statement. You cannot blame the private sector for this by the way, you cannot blame the banks or any other often used scape goat. The issue is the politician system we have coupled with the Unions hell bent on maintaining control and power through any means necessary.

At least after a few decades we the Irish people have coped on to the fact that throwing money at problems like the Health System is not the answer. We already spend enough, its just grossly mismanaged and over staff in some key areas and where there are numerous vested interests and stakeholders keen to maintain their cushy jobs and secure tenure.

I will put it that you will never get reform of the public Sector if you vote in left wing parties. The only hope we well ever get is a majority FG government, which will not be happening anytime soon. The next best hope is an actual coalition of FG and FF which is far more likely but FF will put on its populist hat so reform may be ruled out of the question.

So in other words we wont get reform because we the Irish people don't want it, or at least we want reform so long as out lives, jobs and conditions remain the same.