Income Tax in Ireland

Geuze

ART6 wrote: »

So what does our government do with that money? Let's look beyond the routine running of the country that costs -- hospitals, public transport, Gardai, welfare to those in trouble, foreign relations, defense and all the other services that a modern country needs. Then what?

2016 data is all here

http://www.cso.ie/en/releasesandpublications/er/giea/governmentincomeexpenditurejuly2017/

Geuze

ART6 wrote: »

My expectations from the state are simple: I want to be told what you need from me from my income in direct tax to run the country without all of the sneaky stealth taxes, VRT, USC, "duty" and VAT doubled on the same product and so on down the endless list. I want to know what these major international corporations are paying into the pot and how that affects the demand upon me. I don't want to be lied to, or subjected to political spin in order to sneak votes from those who have not been paying attention.

There is no such thing as a "stealth" tax, that is a poor word used by the media.

There are several indirect taxes, like VAT, excise, etc., which are all justified, rationale, and common in many countries.

You want to know what CT revenue is?

http://www.revenue.ie/en/corporate/documents/research/corporation-tax-returns-2016.pdf

Geuze

ART6 wrote: »

My expectations from the state are simple: I want to be told what you need from me from my income in direct tax to run the country without all of the sneaky stealth taxes, VRT, USC, "duty" and VAT doubled on the same product and so on down the endless list. (

You seem to want to abolish all indirect taxes and replace them with direct income taxes?

Indirect taxes exist for a reason, there is an economic rationale for them.

For Reals

Geuze wrote: »

There is no such thing as a "stealth" tax, that is a poor word used by the media.
....

If the national media reporting, use it and the elected officials use it for over a decade, it's a valid term by any standards.

House levy a stealth tax on buyers, says FG
The Government will be imposing "crucifying" stealth taxes on house-buyers next year through the introduction of a levy on new homes, Fine Gael claimed in the D yesterday.
Party leader Mr Enda Kenny said that those buying newly-built houses could be forced to pay up to €600 million in "direct stealth taxes" through the levy.
The "development charge" is due to come into effect from March next year and could range from €6,000 to €28,000 depending on the county and the size of the house, said Mr Kenny. He said if an average of €10,000 was charged for each of the 60,000 houses being built in a year, "that is a direct stealth tax" of €600 million.
However, amid persistent heckling and interruption, the Taoiseach, Mr Ahern, insisted that such levies had been in place since 1964, but were limited for years to roads and sewerage schemes and were applied inconsistently. Charges would now be applied in a consistent way to provide recreational and community facilities for new developments. Mr Ahern also said the final decision on the levy amount "is a matter for the elected representatives in the local councils".https://www.irishtimes.com/news/house-levy-a-stealth-tax-on-buyers-says-fg-1.391564

Amusing to see Enda criticise the government and Bertie point to the LA's, now the roles are reversed, somewhat.

Builders will get a tax discount if they begin work on-site within 18 months of getting planning permission, under plans to be announced in Budget 2015.
http://www.independent.ie/business/budget/new-tax-deal-for-developers-who-build-homes-faster-30640723.html

BoatMad

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.

your comments like most " sound bites" seem reasonable to those that are largely ignorant of the facts

The truth of course is entirely different

by and large private business in this country is not supported by the tax base, certainly not in anyway that is significantly different to many other countries

private business simply works on the basis that there are enough people that want to buy your product or service , that you will make a profit and survive , you either get enough customers, or you lower your price point/chnage your products or you disappear

the tax is then paid from that " profit " , obviously since a loss making company cant pay tax

the tax system intervenes in some cases to try and protect certain sections of the population that for various reasons are disadvantaged

in that respect its not perfect , but its not a disaster either

as for socialism in reverse, this is not a socialist country and never will be , far too many farmers for that to happen

For Reals

BoatMad wrote: »

your comments like most " sound bites" seem reasonable to those that are largely ignorant of the facts

The truth of course is entirely different

by and large private business in this country is not supported by the tax base, certainly not in anyway that is significantly different to many other countries

private business simply works on the basis that there are enough people that want to buy your product or service , that you will make a profit and survive , you either get enough customers, or you lower your price point/chnage your products or you disappear

the tax is then paid from that " profit " , obviously since a loss making company cant pay tax

the tax system intervenes in some cases to try and protect certain sections of the population that for various reasons are disadvantaged

in that respect its not perfect , but its not a disaster either

as for socialism in reverse, this is not a socialist country and never will be , far too many farmers for that to happen

You've not shown my point to be untrue, let alone, entirely different from your opinion you claim as fact.
You have given no facts to dispute my post but your view is welcome.

private business simply works on the basis that there are enough people that want to buy your product or service , that you will make a profit and survive , you either get enough customers, or you lower your price point/chnage your products or you disappear

You believe this to be how private business works? Some.

blanch152

For Reals wrote: »

If the national media reporting, use it and the elected officials use it for over a decade, it's a valid term by any standards.



Amusing to see Enda criticise the government and Bertie point to the LA's, now the roles are reversed, somewhat.

https://en.wikipedia.org/wiki/Stealth_tax


Yes, the media use it and the politicians use it, as the link shows its origins are political attacks by the right-wing Conservatives on left-wing Labour. Highly ironic to see it adopted by left-wingers in Ireland.

It is not a term that has its origins in economics.

BoatMad

For Reals wrote: »

You've not shown my point to be untrue, let alone, entirely different from your opinion you claim as fact.
You have given no facts to dispute my post but your view is welcome.



You believe this to be how private business works? Some.

yes its the basics of how a private business works, you need ( a) demand, ( b) and ability to purchase and ( c) the price point that makes a profit

have all three, you have success ( excluding the arguments around scale )

The tax system by and large does not interfere with that process, even if it skims a bit from the top and the bottom of the process ( i.e. VAT and corporate tax)

For Reals

BoatMad wrote: »

yes its the basics of how a private business works, you need ( a) demand, ( b) and ability to purchase and ( c) the price point that makes a profit

have all three, you have success ( excluding the arguments around scale )

The tax system by and large does not interfere with that process, even if it skims a bit from the top and the bottom of the process ( i.e. VAT and corporate tax)

The state has been interfering with the housing market with grants and subsidies for decades. No to mention the banks being bailed out. Add to that workers dependent on state aid. Renters and landlords, (although dependent might not stretch to landlords). These are the facets which make up my point. If you can show this not to be the case, okey doke.

BoatMad

For Reals wrote: »

The state has been interfering with the housing market with grants and subsidies for decades. No to mention the banks being bailed out. Add to that workers dependent on state aid. Renters and landlords, (although dependent might not stretch to landlords). These are the facets which make up my point. If you can show this not to be the case, okey doke.

The state primarily uses " economic " activity to raise taxes. Hence it seeks to levy taxes on such areas it determines , due to economic activity , it can raise the necessary revenues, This has been going on since King Arthur was a lad.

hence taxes on housing , hence taxes on motoring , hence taxes on income and capital acquisition / inheritance and disposal , not to mention corporate taxes

within that revenue raising the state seeks to allow affect social change by taxation policy , though most social change is carried out by direct legislation

The state also recognises that the simple application of taxes on economic activity can result in marginal groups being unfairly taxed and seeks by way of reliefs and exceptions to try and protect such sections. By its very nature , this is an iterative system and changes occur regularly

The bank bailout was not in reality funded by the tax system , The functioning banks were recapitalised ( this is an investment not a bailout ) primarily from the national pension reserve

Anglos liquidation was funded by a promissory note , from the ECB, which in essence , is the printing of money , ( thank goodness for a fiat currency eh)

While GDP debt ratios agreed by the EU , force ireland to use windfall gains to reduce GDP debt ratios ( well until we get below 3% then we can do what we like ) its not a particular burden on the taxpayer, merely the inability to use additional revenues freely

if you are contending that the taxation process, causes market distortions, sure of course, anything that interferes in the free market process, in essence distorts that process , some distortion is necessary , some is badly handled and some is unnecessary , such is the world of humans :rolleyes:

For Reals

Where does the state get it's money? Apart of course from our bailout loan. I'll agree not all money given to bolster private developers or subsidies to help create more customers for them, would fall under the differing terminology we get bandied about associated with the 'taxation system'. I smell an Irish water debate, no need

BoatMad wrote: »

...
if you are contending that the taxation process, causes market distortions, sure of course, anything that interferes in the free market process, in essence distorts that process , some distortion is necessary , some is badly handled and some is unnecessary , such is the world of humans :rolleyes:

In part, yes.

Before we get into some socialist utopia spiel; let's go back to the key point.
If we give welfare at rates based on the standard of being able to live/get by and as has been argued, it makes little economic sense for some to get a minimum wage job. We've people possibly not seeking work. Employers not supplying attractive, living salaries. Costs/charges/taxes are both causing and feeding this broad issue, IMO. We should be looking at the system we have and how to make improvements rather than populist balancing acts with taxation and/or looking to cut in places and give breaks in others to appease backers and supporters of the government of the day. Not everything is about Fine Gael, they just happen to be currently having their turn on the political merry-go-round often laughing-ling referred to as Government.

BoatMad

Where does the state get it's money? Apart of course from our bailout loan

financing a state is a complex process, in essence credit is advanced to a state in the form of a fiat currency , in reality the state effectively " prints money " but must ensure at all costs that confidence in that money supply is maintained.

hence in reality tax and spending is circular , the only debate is the distribution of the tax take rather then the principle

If we give welfare at rates based on the standard of being able to live/get by and as has been argued, it makes little economic sense for some to get a minimum wage job.

we are entering a period of change, going forward the preponderance of jobs will be low paid, largely service orientated , with a decreasing minority in skilled employment, the "gig" economy will predominate

hence we may yet see the living wage concept, where in effect tax is used to bolster low wages to allow society to function , personally , I think this is a better system then pure welfare, but many see it as simply subsiding low wage employers

Employers not supplying attractive, living salaries.

they are to an increasing smaller number of people, thats the issue

Costs/charges/taxes are both causing and feeding this broad issue

In Ireland we seek to deliver a very comprehensive range of social services, which is very difficult for a population of 4.5 million to finance , hence the excess struggle between tax distribution and the demand for services

The result of that demand for services, is in practice a high cost economy . the alternative is a US style situation , where the poor sink too despicable levels.

BoatMad

give breaks in others to appease backers and supporters of the government of the day

are you suggesting that voters in a small state with significant clientism arising from the PR-STV system and the local nature of irish politics will mean that Gov will not engage in policies that are orientated towards the voters that support that Gov,

to suggest otherwise is highly naive

every democratic Gov supports the voters that put it in power, see Tories, Trump, etc etc , its the nature of the beast

ART6

blanch152 wrote: »

If the state only takes income in direct tax from labour, those who inherit money, own property and shares and other wealth will benefit. That is why we need more indirect taxation such as water charges, bin charges, property tax, wealth tax, capital gains tax, inheritance tax, etc. so that we can reduce the direct taxation of labour. Business owners in particular get an easy ride from the taxman.

The failure of ordinary workers to understand this is absolutely astounding, but when you see political parties who claim to be left-wing opposing such indirect taxation, you can only despair.

I'm not sure that I understand your reasoning. Income tax is not levied solely upon the "labour" class. If you have an income then you pay tax upon it, and the higher your income the more tax you pay as a percentage. If you own shares in a company they are worthless until you either take a dividend from them or sell them and, in the former case, that dividend is part of your income and subject to income tax. If you sell the shares then you become subject to capital gains tax.

If you inherit a property that your parents bought from taxed income, and if it is more than the average price of a three-bedroomed semi in Dublin, then you could find yourself stuck with inheritance tax. Perhaps you and your family are in rented accommodation, can't afford a mortgage sufficient to buy a house, and there is this nice house left to you by your parents -- except that the government will immediately demand a substantial part of its value in tax that you can't pay without selling it. Oh well, there will become a residue of money left over, and you might invest that in a deposit account with a bank with a view to one day saving enough to have a mortgage deposit. Your government will then grab a slice in DIRT tax of any interest the bank pays you, even when bank interests rates are approaching zero. Your deposit might well not even keep place with inflation, but the Exchequer will still wants its money.

If you have a young family and are doing quite well in full time employment for both you and your wife, and if you can just about manage child care costs to permit your wife to work, you might elect to invest in private health insurance just in case any of your kids need medical treatment within ten years of the need arising. That might be barely affordable, but the government has glued on a "Health Insurance Levy" that increases your premium by several hundred Euros a year. Note that the levy is not dependent upon your income, and it doesn't matter if you are wealthy or impoverished.

But then your kids grow as they are prone to do, and the government requires them to be schooled. So now you face, in addition to the many other charges, fees, and levies, an education system that expects you to pay several hundreds of Euros a year in uniforms and school books for "Free education". Perhaps you might note that all of those costs are not income-related.

Perhaps you are someone who has stuck his neck out to create a new business -- those who are supposed to be the salvation of Ireland. Perhaps you are successful and can employ a couple of dozen people. Perhaps you put your (inherited) house on the line with a bank for an overdraft. You seek to reap the benefits of your twelve hours a day and you buy a nice new Ford Mondeo in order to impress your clients and seek new business. You will pay exactly the same VRT on that car as would Joe making widgets on the production line. You will pay the same VAT, and the same excise duty as the guy on the production line on every gallon of fuel you buy. You will pay the same motor tax.

But the business owner "Gets a free ride from the taxman". Does he really. Have you ever tried? Have you ever tried to submit revenue accounts annually for a business that was just you and your wife, paying your accountant three grand a year to file them? Have you ever seen the multiple incomprehensible pages of the Revenue on Line filings that want to know if you have even gained income from the sale of your old bed socks?

OK, back to basics. What does the government seek from every citizen irrespective of his wealth, and to what extent does that distinguish between the wealthy and the impoverished? Surely the general principle in any advanced society should be from him according to his means, to him according to his needs. That, I contest, is a philosophy that has been lost in the political hierarchy in all parties not just in Ireland but in Europe because the rich man pays a lot more that the poor man but the poor man does not escape the clutches of the revenue.

Now it is customary to defend the interests of the party at all cost in order to win the next election, and that requires a party manifesto and a programme for government. As always these will offer a blizzard of Manna from Heaven without any indication of who will pay for it although the voters will find out soon enough. Then the first budget and the tortuous wranglings of the great, the good, and the newly-elected. There ain't enough money lads!

Right so, if we slip a little levy on this, a fee on that, a charge on that? After all, these are not taxes are they? They are simply administrative charges to reflect the oversight of the government. It is unfortunate that all of those levies, fees, charges mainly affect the working population, but that is only because it is the majority and, with a bit of luck, they will never notice.

This is why I object so strongly to the tax code that is supposed to provide the money to run the country. It has become tainted by lies, obfuscation, and self-interest among the political elite. Don't accept that? Then tell me who is paying Enda Kenny's vast severance payment and pension for example? You are, but you have no means of knowing what your contribution is because it is hidden from you in all sorts of sneaky little subterfuges in the small print of the budgets that your TDs never read -- and believe me, I know a bit about this when I discovered that the 2016 Finance Act empowered the government to seize forty percent of my wife's small invested fund that she was saving for her funeral (hopefully) many years ahead. The excuse was that she had not drawn down on it as a pension, which would have been worth at least twenty Euros a year and somewhat insignificant compared with what we the proletariat pay to fund our political leaders who paid nothing.

So I don't accept your argument. All of the stealth taxes, fees, levies, duties, charges and all of the other sneaky robberies by corrupt and self-serving politicians are not there to equal the tax base between the rich and the working man, because none of them have any idea what it is like to be a working man. Their whole strategy is to defend the big international companies in order to minimise the taxes they should pay and make up the difference from those who have the least ability to protect themselves. Not so? Then why the hell are they opposing the EU tax ruling against one of the wealthiest corporations in the world?