Ethics of our Corporation Tax

Franz Von Peppercorn

Rologyro wrote: »

Agree that the best thing to do for Ireland is to leave our corporation tax the way it is.

If these companies were taxed based on where they made their sales it would solve this without Ireland having to touch its tax rate. There would be huge resistance to that though.

They are. It’s a sales tax or vat.

Wheeliebin30

If your house goes on fire what happens?

You first and foremost put the fire out.

Then you get the money together.

Then you build it again.

That’s the way the recession went.

You have to get people working again and money in before starting to build things again.

But people can’t grasp this concept and think we should build first while the fire is going and with no money to do so.

It’s basic stuff.

prawnsambo

Matt Barrett wrote: »

Shouldn't be. We would need to change the way we do business if economic success was joined by problems for society.

If you quote something without attribution, it's meaningless.

Matt Barrett wrote: »

Not related to my query regarding social problems needing to be a result of economic growth, (they shouldn't) but a reasonable explanation of why we found ourselves in a housing crisis after the last crash. Not why we've record breaking worsening crises ongoing. This all relates back to possibly looking at the economy but ignoring or paying little heed to those crises? I would suggest there's a disconnect, which is my conclusion.

They're not a result of economic growth, you're just looking at two parallel indicators and linking them. Incorrectly

Matt Barrett wrote: »

Maybe initially, but we can see policies are making social matters worse not better. At this point we can't continue to blame the crash, unless the economy start rebuilding itself? My point is we need look at how economic decisions effect society not just the economic growth. If one is doing well and the other isn't we've got problems time won't solve.

The construction crash was massive. Not only did the sector crash, it disappeared. People in the industry left, in droves. Machinery was even shipped out to Poland and other parts of Europe. New builders can't get finance and have to fund themselves, which is in itself a massive brake on progress. You could only call it a decimation if that meant the opposite of its original meaning. One tenth left, not one tenth gone.

prawnsambo

Wheeliebin30 wrote: »

If your house goes on fire what happens?

You first and foremost put the fire out.

Then you get the money together.

Then you build it again.

That’s the way the recession went.

You have to get people working again and money in before starting to build things again.

But people can’t grasp this concept and think we should build first while the fire is going and with no money to do so.

It’s basic stuff.

Never mind that while the fire is still smouldering, there's a hurricane on the way called brexit.

Wanderer78

Wheeliebin30 wrote:

But people can’t grasp this concept and think we should build first while the fire is going and with no money to do so.

How and why did the fire start in the first place?

prawnsambo

Wanderer78 wrote: »

How and why did the fire start in the first place?

Lack of regulation in the banking sector.

Wanderer78

prawnsambo wrote:

Lack of regulation in the banking sector.

Agree, but that's only a start, it goes way deeper than that, but the banking sector played a major role in it, the fact that banks create the majority of our money via credit creation, do not behave as intermediates in the whole financial system, and our most predominant economic models still don't reflect these facts, is a major call for concern, but an argument for another day

PeadarCo

Wanderer78 wrote:

Agree, but that's only a start, it goes way deeper than that, but the banking sector played a major role in it, the fact that banks create the majority of our money via credit creation, do not behave as intermediates in the whole financial system, and our most predominant economic models still don't reflect these facts, is a major call for concern, but an argument for another day

The issue was far far more basic. The reckless lending of the banks enabled the government of the time to reduce taxes and increase spending at least in the short term. This is something nobody questioned because the alternative was higher taxes and reduced spending.

You have the same issue with corporation tax. You could increase it to 50 but you also are going to have to come up with a solution to deal with the loss of tax revenue from reduced employment and the companies that employ those people. Currently from reports a small number of companies contribute heavily to corporation tax revenue on which the country relies on. Remember we have only recently moved into surplus territory.

Schnitzler Hiyori Geta

prawnsambo wrote: »

Lack of regulation in the banking sector.

...Worldwide!


Additionally, bailing out AIB and Bank of Ireland was absolutely the correct decision (and we can see that on current performance and repayment to the State) - Anglo made themselves look too-big-to-fail by providing false books to Minister Lenihan Jr., who still wanted to let Anglo fail. He was over-ruled and the mistake of bailing out Anglo and its appendages was made. The people to blame for that are those at Anglo that lied, not the government.

James Brown

prawnsambo wrote: »

Never mind that while the fire is still smouldering, there's a hurricane on the way called brexit.

We should not have worsening, record breaking crises as part of a growing economy.

Arguing against a false narrative of your own creation is pointless. Nobody is expecting instant or magic anything.

It's expected that a growing economy causes strains, but we've crises at a level never seen before. That's not mere growing pains.
This is not expecting magic anything, just better management. We're years into it now and it's not turning around anytime soon. There is a massive disconnect.
This relates to corporation tax. We need be careful we aren't stepping on or ignoring the tax payer to lure in big corporations, like we are with vulture funds IMO. No point in drawing in work from companies paying little tax if the workers can't afford a home or need rental aid off the state. Something to be mindful of.

Schnitzler Hiyori Geta

Matt Barrett wrote: »

We should not have worsening, record breaking crises as part of a growing economy.

This doesn't really mean anything though does it? Saying should not doesn't provide any solution or realistic view on how to resolve the issues.

It's expected that a growing economy causes strains,

No it isn't. Our economy is growing from the biggest international economic crisis in living memory.

but we've crises at a level never seen before.

No, we aren't.

That's not mere growing pains.
This is not expecting magic anything, just better management. We're years into it now and it's not turning around anytime soon. There is a massive disconnect.
This relates to corporation tax. We need be careful we aren't stepping on or ignoring the tax payer to lure in big corporations, like we are with vulture funds IMO.

Not really sure how any of this draws into a coherent point?

Better management - what does this mean? How are we ignoring the tax payer? What's the proof that if we're ignoring the taxpayer that this is to benefit "big corporations"? What do so-called vulture funds have to do with any of this?

No point in drawing in work from companies paying little tax if the workers can't afford a home or need rental aid off the state. Something to be mindful of.

There's no evidence of any of these statements, nor is there a shown correlation between the false claim that "companies pay little tax" and affordability of houses.

James Brown

Schnitzler Hiyori Geta wrote: »

This doesn't really mean anything though does it? Saying should not doesn't provide any solution or realistic view on how to resolve the issues.

So you disagree or just wanting to sound off? I'm responding to posters inferring social problems come with a growing economy. What's your point?

Schnitzler Hiyori Geta wrote: »

No it isn't. Our economy is growing from the biggest international economic crisis in living memory.

As discussed, a boom leads to over heated housing markets. You're rally jumping in late to this line.

Schnitzler Hiyori Geta wrote: »

No, we aren't.

Record breaking. Look it up.

Schnitzler Hiyori Geta wrote: »

Not really sure how any of this draws into a coherent point?

Again, you seem to be unaware of the discussion and jumping in. Fair enough.
Growing economy shouldn't mean bad for society at large. Pointing out we've major crises. This relates to bad management.

Schnitzler Hiyori Geta wrote: »

Better management - what does this mean? How are we ignoring the tax payer? What's the proof that if we're ignoring the taxpayer that this is to benefit "big corporations"? What do so-called vulture funds have to do with any of this?

Record breaking crises. It's been in the news for years. Vulture funds buy up property, property values rise, people find it hard to afford. It's how markets work. Vulture funds avail of low taxation. The discussion is in regard to the ethics of corporate taxation. Pointing out having attractive taxation to lure in companies is a good idea but we should be careful it's working for society at large not making this worse. You disagree?

Schnitzler Hiyori Geta wrote: »

There's no evidence of any of these statements, nor is there a shown correlation between the false claim that "companies pay little tax" and affordability of houses.

See above. If you can't be bothered to read back before you jump in I can't help you. You've added nothing here.

prawnsambo

Matt Barrett wrote: »

So you disagree or just wanting to sound off? I'm responding to posters inferring social problems come with a growing economy. What's your point?

Who said that? Don't remeber it being said by anyone in the last few pages and you've mostly been replying to me and I certainly haven't said it.

PeadarCo

prawnsambo wrote:

Who said that? Don't remeber it being said by anyone in the last few pages and you've mostly been replying to me and I certainly haven't said it.

I Matt might be responding my post where I mentioned crashing the economy would sort out the crisis. But you are dealing with a strawman. The emigration that would result was considered a big problem. But if you define social progress by a small number of issues you end up with this situation. You miss the complexity of the situation. Compared to the middle of the recession we have far less issues and people in general have more resources to deal with them. Do we live in a utopia no but that's fundamentaly what Ireland is being compared to.

It's very easy to say companies should pay 50% tax on profits in the same way it would be very easy to sort out the housing crisis. However there are consequences. A high corporation tax could send multinationals out of country and also impact indigenous companies. Same with the housing crisis get rid of planning laws, cut building regulations employ slave labour etc and you will sort out the issue very quickly.

However to do things in a sustainable fashion you have to engage with the complexity of the issues and understand them. Which is the complete opposite of the meaningless slogans that have been put forward here. Could the corporation tax regime be changed in a big way (remember the budget introduces minor changes every year) it could be its to be thought out. Otherwise you end up with a mess like Brexit which was based on a few slogans and looked at how that is going for the UK

James Brown

prawnsambo wrote: »

Who said that? Don't remeber it being said by anyone in the last few pages and you've mostly been replying to me and I certainly haven't said it.

It was stated that a housing shortage can come with a growing economy. I was saying that we're in crises and crises shouldn't be a result of a growing economy.
I feel there's a disconnect currently. We've a growing economy and growing crises.
I've mostly being repeating this point over and over to you.

PeadarCo wrote: »

I Matt might be responding my post where I mentioned crashing the economy would sort out the crisis. But you are dealing with a strawman. ...

He's creating a strawman and you seem to be working on your own you mean. Nowhere did anyone say it could all be quickly fixed. I certainly didn't say low corporate tax should equal social problems, quite the opposite. What part of we should take care that low corporate tax while helping the economy might be cause/aiding social problems is confusing here?
Do you lads think record breaking crises and a growing economy is a trade off or theres some kind of disconnect? Which is my only point all along. No magic, no strawman.

prawnsambo

Matt Barrett wrote: »

It was stated that a housing shortage can come with a growing economy. I was saying that we're in crises and crises shouldn't be a result of a growing economy.
I feel there's a disconnect currently. We've a growing economy and growing crises.
I've mostly being repeating this point over and over to you.

You're repeating it because you won't engage with the points that are being made. And if you are going to quote something somebody said, quote them, don't paraphrase. I and others have no idea who it was or what the context was. Or even if you're quoting them correctly. As was said above, you could be just straw manning.

James Brown

prawnsambo wrote: »

You're repeating it because you won't engage with the points that are being made. And if you are going to quote something somebody said, quote them, don't paraphrase. I and others have no idea who it was or what the context was. Or even if you're quoting them correctly. As was said above, you could be just straw manning.

Sorry, I made a statement and you've not commented on it but spoke around it. That's why the repetition. Peader explained it for you, in his own take.

Do you think we should expect social problems to the level we have today because of a growing economy or not? I don't. Do you think there may be a disconnect with having a growing economy and worsening crises? I do.
Do you think we should be careful that having lower corporate tax, while good for business isn't causing harm socially? I do.

prawnsambo

Matt Barrett wrote: »

Sorry, I made a statement and you've not commented on it but spoke around it. That's why the repetition. Peader explained it for you, in his own take.

Sorry, but you haven't explained or quoted somebody saying that "a housing shortage can come with a growing economy". I've searched the thread and nobody but you has said this. So it seems to me that you are straw manning and trying to create an argument with something nobody has said.

James Brown

prawnsambo wrote: »

Sorry, but you haven't explained or quoted somebody saying that "a housing shortage can come with a growing economy". I've searched the thread and nobody but you has said this. So it seems to me that you are straw manning and trying to create an argument with something nobody has said.

In a post you thanked,

https://www.boards.ie/vbulletin/showpost.php?p=109598112&postcount=45

Peader suggests that problems with housing can come with economic growth and cited vacant houses during a time of low growth.
I have been asking should a growing economy mean social crises? And pointed out, upon further discussion that we have record breaking crises, which cannot be explained away by a growing economy and should not be accepted as part of such. So there's no quote. You seem more concerned with this than the discussion. If you're only interested in that, grand. I'm trying to have a discussion. If you're interested in the discussion, see below.

Matt Barrett wrote: »

Do you think we should expect social problems to the level we have today because of a growing economy or not? I don't. Do you think there may be a disconnect with having a growing economy and worsening crises? I do.
Do you think we should be careful that having lower corporate tax, while good for business isn't causing harm socially? I do.

PeadarCo

Matt Barrett wrote:

Peader suggests that problems with housing can come with economic growth and cited vacant houses during a time of low growth. I have been asking should a growing economy mean social crises? And pointed out, upon further discussion that we have record breaking crises, which cannot be explained away by a growing economy and should not be accepted as part of such. So there's no quote. You seem more concerned with this than the discussion. If you're only interested in that, grand. I'm trying to have a discussion. If you're interested in the discussion, see below.

If are going to debate with me please quote my posts. Two my point was you can't use the housing crisis as a barometer for the entire country. You won't solve it the meaningless slogans. You have get your hands dirty and dig into the details. Once you do that you would understand how difficult things are as you have to deal with multiple different competing interests all legitimate that you have to balance. I think you completely missed the point I was making and from my point of view all you are doing is debating with a strawman you created.

The same applies to corporation tax. It's very easy to say companies should pay more and simplify a complex are(something which journalists tend to do regularly). Would it be nice if companies paid more tax it would. But you have to do in such a fashion that does not harm other areas of the economy. Otherwise you will end up reducing the total tax take.

johnnyskeleton

Mod note:

The topic is corporation tax. Not corporation housing[/b]

James Brown

PeadarCo wrote: »

If are going to debate with me please quote my posts. Two my point was you can't use the housing crisis as a barometer for the entire country. You won't solve it the meaningless slogans. You have get your hands dirty and dig into the details. Once you do that you would understand how difficult things are as you have to deal with multiple different competing interests all legitimate that you have to balance. I think you completely missed the point I was making and from my point of view all you are doing is debating with a strawman you created.

The same applies to corporation tax. It's very easy to say companies should pay more and simplify a complex are(something which journalists tend to do regularly). Would it be nice if companies paid more tax it would. But you have to do in such a fashion that does not harm other areas of the economy. Otherwise you will end up reducing the total tax take.

I was following on from your comment on a growing economy causing housing problems. I'm not scoring points here and I find that style of debate tiresome.
My question was taken arse ways by others and you it seems. There's no strawman there. I never said anybody suggested a growing economy should equal crises or anything near that. I asked should it? I also followed on your point by asking should we be seeing record breaking crises with a growing economy? Something nobody has answered by the way.

I agree with you on ensuring corporation tax while good for business, should be balanced to ensure it doesn't have a bad effect socially. If I'm reading you wrong, it's not a strawman either.

EDIT: Actually looks like I am, your comment relates to other aspects of the economy not society.

Schnitzler Hiyori Geta

There would seem to be zero evidence proffered here that would support the statement that "a growing economy causes housing problems" is a generally true statement.

James Brown

Schnitzler Hiyori Geta wrote: »

There would seem to be zero evidence proffered here that would support the statement that "a growing economy causes housing problems" is a generally true statement.

I don't believe it should. We can take our eye off the ball while concentrating on one area, but after many years and worsening crises, that would even be a poor excuse at this point IMO.
This lends itself to corporate taxation or any other area of the economy.

Schnitzler Hiyori Geta

Matt Barrett wrote: »

I don't believe it should. We can take our eye off the ball while concentrating on one area, but after many years and worsening crises, that would even be a poor excuse at this point IMO.
This lends itself to corporate taxation or any other area of the economy.

No. There is no evidence that our corporation tax rate has any adverse impact on the housing market. Repossessions are vital from a functioning market point of view; the fact that this is extremely low reduces stock at a reasonable price.

professore

PeadarCo wrote: »

You can rail all the expenses you want but ultimately you will be taxed at your normal tax rate when you try to withdraw the money from the company/legal entity . So you will pay corporation tax and then you will end up paying standard income taxes. Whereas if you were just a sole trader you would just pay your income tax and no corporation tax. You also have to factor in the close company surcharge on retained earnings which off the top of my head to get away from a company needs 5 or more unconnected shareholders. The issue fundamentally is how to get money out of company/legal entity. There is a career there with the topic alone.

If you have any profits you can just pay yourself a bonus at the end of the year (or every month, whatever you prefer) which is then taxed at PAYE rates so it's no different. Or put it into a pension. But for those thinking there is some gold plated tax avoidance available for small companies, there sure as hell isn't. You pay AT LEAST as much tax as an employee.

Harry Palmr

If anything we should be hammering home the advantages of being based in a low corporate tax environment within the EU and lower the rate a bit further as an attention grabber. France and Germany can piss off and indeed given the Brexit context would be reluctant to try and put the squeeze on Ireland anyway.

Gbear

What would be the issue with simply abolishing it completely?

If, as we've seen, a mega-corporation can just sidestep it anyway, while smaller companies, like OscarBravo's, don't have the resources to do so, the tax is already effectively regressive.

If the income of the company that would otherwise be taxable is attempted to be expatriated, then perhaps it could be taxed, but otherwise, what benefit is there in taxing money that will otherwise be taxed through income, capital gains, PRSI, or whatever the company spends it on?

At a minimum, is it not needless complexity added to taxation that could be acheived through other means?

Even if we were to get to the stage where 90% of current jobs were automated and few employees were around to earn taxable income, the massive profit margin would still ultimately end up as taxable income, whether it was in purchasing more plant or property, issued as dividends, DIRT, capital gains or whatever.

Eric Cartman

Gbear wrote: »

What would be the issue with simply abolishing it completely?

If, as we've seen, a mega-corporation can just sidestep it anyway, while smaller companies, like OscarBravo's, don't have the resources to do so, the tax is already effectively regressive.

If the income of the company that would otherwise be taxable is attempted to be expatriated, then perhaps it could be taxed, but otherwise, what benefit is there in taxing money that will otherwise be taxed through income, capital gains, PRSI, or whatever the company spends it on?

At a minimum, is it not needless complexity added to taxation that could be acheived through other means?

Even if we were to get to the stage where 90% of current jobs were automated and few employees were around to earn taxable income, the massive profit margin would still ultimately end up as taxable income, whether it was in purchasing more plant or property, issued as dividends, DIRT, capital gains or whatever.

none, it would get us loads of FDI and id be well in favour of it.

Schnitzler Hiyori Geta

Gbear wrote: »

What would be the issue with simply abolishing it completely?

If, as we've seen, a mega-corporation can just sidestep it anyway, while smaller companies, like OscarBravo's, don't have the resources to do so, the tax is already effectively regressive.

If the income of the company that would otherwise be taxable is attempted to be expatriated, then perhaps it could be taxed, but otherwise, what benefit is there in taxing money that will otherwise be taxed through income, capital gains, PRSI, or whatever the company spends it on?

At a minimum, is it not needless complexity added to taxation that could be acheived through other means?

Even if we were to get to the stage where 90% of current jobs were automated and few employees were around to earn taxable income, the massive profit margin would still ultimately end up as taxable income, whether it was in purchasing more plant or property, issued as dividends, DIRT, capital gains or whatever.

Eric Cartman wrote: »

none, it would get us loads of FDI and id be well in favour of it.

Could work if you forced these big companies to fund infrastructure projects and/or base themselves in secondary locations.