Higher taxes inevitable because of COVID19

Geuze

Truthvader wrote: »

OK... The glass bottle site is sitting there waiting to be transformed into a mini NYC

Not convinced that there are savings as claimed. Like what?

Hadnt thought about the lack of tradesmen. Simply dont know about that. Is it not the case that a lot of building is now done by buying in prefab units ?

Dont know but asking questions

OK, there are plenty of savings in Ireland to finance investment, yes.

For example, CU are flush with savings that they simply put on deposit.

Now, I will say that the cost of finance to developers is still too high.

This is due to banks being understandably more cautious since the GFC Great Financial Crisis.

So a friend who is an accountant with a house builder tells me:

much harder to get finance for speculative land purchase, i.e. before PP

they must put up 20%
the bank will lend the next 60%, but at 5-6%, compare this to 0% ECB rate

the final 20% can be borrowed from a mezzanine finance lender, i.e. a non-bank lender that specialises in higher risk, less secured lending to property developers.

Rates = 10-14%!!!!!

All this finance cost is passed onto the house buyer.

Truthvader

Geuze wrote: »

OK, there are plenty of savings in Ireland to finance investment, yes.

For example, CU are flush with savings that they simply put on deposit.

Now, I will say that the cost of finance to developers is still too high.

This is due to banks being understandably more cautious since the GFC Great Financial Crisis.

So a friend who is an accountant with a house builder tells me:

much harder to get finance for speculative land purchase, i.e. before PP

they must put up 20%
the bank will lend the next 60%, but at 5-6%, compare this to 0% ECB rate

the final 20% can be borrowed from a mezzanine finance lender, i.e. a non-bank lender that specialises in higher risk, less secured lending to property developers.

Rates = 10-14%!!!!!

All this finance cost is passed onto the house buyer.

I think what most of us here are thinking about is a state build without developers other than as subbies. The state can build and then sell some so there is a proper mix of private and social housing rather than the usual lego ghetto for disposable people only that never works. This time lets have a mix of rich and poor living together so a cohesive society is created rather than the usual have and have nots

Fritzbox

Geuze wrote: »

We have 3,000+ primary schools, way more than other countries.

Riverstown parish in Co. Sligo has 5 primary schools.

The population of Riverstown is <1,000.

Think of all the principal salary and pensions, think of the duplication.

Sligo town has 9 primary sch, would a town of 20,000 in Belgium or UK have 9 primary schools?

We have 750 sec schools.


We had 700 Garda stations while NI has 70.

We cut by 20% to 560 stations, and people complained.


We had 19 colleges to train teachers (there is an ongoing merger process)

We have 14 nurse education sites, NI has two.


There are too many hosps, the doctors agree.

We have too many EDs, Dublin has six I think.

When the 8 health boards were merged into the HSE, Bertie Ahern did a deal with unions, not a single job lost.

Can you imagine the duplication and waste?

Achill Island (pop.2,700) has 8 or 9 primary schools.

There are more police stations in Ireland than in several Australian states put together.

salonfire

Geuze wrote: »

We have 3,000+ primary schools, way more than other countries.

Riverstown parish in Co. Sligo has 5 primary schools.

The population of Riverstown is <1,000.

Think of all the principal salary and pensions, think of the duplication.

Sligo town has 9 primary sch, would a town of 20,000 in Belgium or UK have 9 primary schools?

We have 750 sec schools.


We had 700 Garda stations while NI has 70.

We cut by 20% to 560 stations, and people complained.


We had 19 colleges to train teachers (there is an ongoing merger process)

We have 14 nurse education sites, NI has two.


There are too many hosps, the doctors agree.

We have too many EDs, Dublin has six I think.

When the 8 health boards were merged into the HSE, Bertie Ahern did a deal with unions, not a single job lost.

Can you imagine the duplication and waste?

This duplication is another way of keeping the public sector largesse going. These examples are what's visible and obvious.

Those within the system would see far more waste.

Instead of cutting PS pay or raising taxes, why not make efficency savings.

irishproduce

thegetawaycar wrote: »

There's plenty of scope to tax and make savings.
Some areas I'd like to see is:
1. Council rent being taken at source from social housing tenants, no need to pay staff to call around and end up not collecting it.
2. A limit on amounts of free usage of medical card for those without chronic illness
3. USC being changed to incorporate a 1% tax on income starting at €1 (the amount of people paying 0 tax is huge compared to other countries)
4. No single parent allowance (a widows allowance would be fine), cap of 3 children for child benefit
5. Reducing welfare over time, if you are more than 2 years unemployed you should be offered public service jobs (street cleaning, graffitti removal etc...) and if you refuse benefits cut (disability not included obviously), No bonus for not working at Christmas
6. No more sales of public housing, stock should remain public and if you want to own a house, buy one at the market rate.
7. Increase public housing stock and offset by not paying hotels or renting 4K apartments
8. All public sector payments to be transparent, allowances rolled into pay so it can be properly reviewed
9. Increase the property tax (take at source), take back council bin collection (set up large bins for neighbourhood usage), there would be no need for clean up of illegal waste if the bin collection was public and accessible to all
10. Tax individuals who live here for less than 180 days on the proportion of days in the country and not only if over 180 days here
11. Tax excessive energy usage from data centres
12. Post graduation working expectations on doctors, nurses, teachers, Vets, physios etc... If you had free education, a minimum of 2/3 years must be spent working in the public system, move abroad without giving back and be liable for fees.

There's plenty more but those ones are a start.

Reasonable enough. But proponents of the capped child allowance policy can never answer what are you to do when they keep having children.
Personal responsibility has been dissolved over decades from some parts of society. It's a cradle to grave system pushed by politicians who like to book votes by keeping people dependent on the state.
Cap it at 3 kids, or remove the handy single mothers payments for girls without a sense of responsibility and you will end up with neglected starving children.
It would take decades of work to unravel the eroded personal responsibility we have built up.

KyussB

Geuze wrote: »

The problem in housing is not the financing.

It's the site costs / lack of sites / supply-side constraints / not enough builders.

There is plenty of savings in Ireland that could be used to finance housing.

There isn't plenty of carpenters / plumbers / electricians, etc.

The property lobby industry greatly exaggerates costs - to a farcical level - I don't believe a word of any of what they say, and especially not economists with gigantic conflicts of interests (i.e. funded by property businesses - e.g. Lyons).

There are plenty of accessible sites with expanded public transport, and proper planning. There is plenty of materials supply when there is a recession (plus, I would argue a lot of the construction material industry is a cartel, that needs busting) - and when you regulate to mandate the prioritization of residential over commercial construction, during housing crises (it's ridiculously that construction has focused on commercial construction to such a high degree, during a housing/rental crisis).
There are a huge number of unemployed people, trivially (if very-long-term unemployment, e.g. 2+ years, becomes a thing again) reskilled into construction and basic trades (arguably, the country should keep a reserve of workers with these trades as a secondary skillset anyway, and guarantee work for them on infrastructure/construction jobs, at times of high unemployment).

I'd say we agree on more things than not, so am not trying to be contrarian to your posts - it's more that I think you see the benefit of some things like e.g. providing jobs for the long-term unemployed, more than other posters - so am trying to point out differences in a constructive, not contrarian, way

KyussB

Geuze wrote: »

OK, there are plenty of savings in Ireland to finance investment, yes.

For example, CU are flush with savings that they simply put on deposit.

Now, I will say that the cost of finance to developers is still too high.

This is due to banks being understandably more cautious since the GFC Great Financial Crisis.

So a friend who is an accountant with a house builder tells me:

much harder to get finance for speculative land purchase, i.e. before PP

they must put up 20%
the bank will lend the next 60%, but at 5-6%, compare this to 0% ECB rate

the final 20% can be borrowed from a mezzanine finance lender, i.e. a non-bank lender that specialises in higher risk, less secured lending to property developers.

Rates = 10-14%!!!!!

All this finance cost is passed onto the house buyer.

If anything this emphasises that all the cost is financial, not material - and shows the need for the state to step into for-profit accommodation development.

It's my opinion, that finance won't provide housing investment, because high rents/prices are so profitable, and there are multiple conflicts of interest in play, and a limited number of lenders (this is typically why the FIRE - Finance, Insurance and Real Estate - sectors need to be walled-off from each other).

Imagine if e.g. we had a Public Bank (not nationalized, a proper public bank), huge numbers of unemployed people trained into adequate levels of construction for building houses, and an emphasis on co-op housing developments provided on a for-profit (for the state) or not-for-profit basis, with state assistance on site acquisition (still paid for by the development) and public transport provision - huge numbers of houses could be built, with the people building them ending up owning them, with state assistance (and assistance from the wider co-op) in financing ownership.

That's the kind of thing we need, so that there is proper competition in the property market - the property market is too easily turned into a cartel among a small number of private interests, if left to the private sector alone, imo.

s1ippy

Geuze wrote: »

We have 3,000+ primary schools, way more than other countries.

Riverstown parish in Co. Sligo has 5 primary schools.

The population of Riverstown is <1,000.

Think of all the principal salary and pensions, think of the duplication.

Sligo town has 9 primary sch, would a town of 20,000 in Belgium or UK have 9 primary schools?

Denmark
Primary school: 110,000 students
2,200 schools
An average of 50 pupils per school.

Ireland
509,652 children
Enrolled in 3,305 schools
That's 155 pupils per school.

Poland
Primary pupils: 2,453,600
Primary schools: 13,725
178 pupils per school.

So 23 pupils more per school in a country with a quarter of our economy but ten times our population size.

Geuze

s1ippy wrote: »

Denmark
Primary school: 110,000 students
2,200 schools
An average of 50 pupils per school.

Ireland
509,652 children
Enrolled in 3,305 schools
That's 155 pupils per school.

DK pop is higher than ours, and yet they have 25% of our primary school population??????

Geuze

KyussB wrote: »

If anything this emphasises that all the cost is financial, not material - and shows the need for the state to step into for-profit accommodation development.

It's my opinion, that finance won't provide housing investment, because high rents/prices are so profitable, and there are multiple conflicts of interest in play, and a limited number of lenders (this is typically why the FIRE - Finance, Insurance and Real Estate - sectors need to be walled-off from each other).

Imagine if e.g. we had a Public Bank (not nationalized, a proper public bank), huge numbers of unemployed people trained into adequate levels of construction for building houses, and an emphasis on co-op housing developments provided on a for-profit (for the state) or not-for-profit basis, with state assistance on site acquisition (still paid for by the development) and public transport provision - huge numbers of houses could be built, with the people building them ending up owning them, with state assistance (and assistance from the wider co-op) in financing ownership.

That's the kind of thing we need, so that there is proper competition in the property market - the property market is too easily turned into a cartel among a small number of private interests, if left to the private sector alone, imo.

Yes, if you stripped out:

(1) massive site costs
(2) high finance costs
(3) developers margin to compensate for risk

houses would be much cheaper.

s1ippy

Geuze wrote: »

DK pop is higher than ours, and yet they have 25% of our primary school population??????

That's what you took from the figures?

Their school system is different to ours.
https://en.m.wikipedia.org/wiki/Education_in_Denmark

"Education in Denmark is compulsory (Danish: undervisningspligt) for children below the age of 15 or 16, even though it is not compulsory to attend Folkeskole ("public school"). The school years up to the age of fifteen/sixteen are known as Folkeskole, since any education has to match the level offered there. About 82% of young people take further education in addition to this.[1] Government-funded education is usually free of charge and open to all. Denmark has a tradition of private schools and about 15.6% of all children at basic school level attend private schools, which are supported by a voucher system".

https://www.statista.com/statistics/1111265/number-of-primary-schools-in-denmark/

Madeleine Birchfield

How much are corporations and billionaires taxed? Maybe taxes on them should be raised and tax loopholes should be closed.

dwayneshintzy

The idea that we have "too many" primary schools is a ridiculous one. The average class size in Ireland is 24 to 25 children per class, quite a bit above the OECD average of 21; http://www.erc.ie/wp-content/uploads/2018/09/Kelleher-Weir-Final-Vol-41.pdf

fash

Geuze wrote: »

I wish that could have happened, but at the time it was said that senior bondholders ranked pari passu with depositors.

Yeah but that was always nonsense and just used as a fake legal sounding excuse. Yes they are "pari passu" as regards the use of the existing banks funds. But if you as a third party decide to give your money to one of those, the agreement between them is meaningless to you. I.e. the pari passu thing was just a post hoc explanation for doing what they did.

Hoboo

Shefwedfan wrote: »

Start with
Stop all childrens allowance after 3 kids. Only going forward, if they have existing then continue
Allow county council to take rent at source, stop the millions of euro wasted on people who wont pay rent
Remove the christmas bonus. If you want a bonus for unemployed, get a f**king job.

Why 3 kids, why not zero. Deal with hardship cases individually, I don't see why people should get rewarded or paid to add more bodies to a stretched economy and society, they should be taxed.

Widdensushi

Hoboo wrote: »

Why 3 kids, why not zero. Deal with hardship cases individually, I don't see why people should get rewarded or paid to add more bodies to a stretched economy and society, they should be taxed.

Because our pension pyramid scheme is built on an expanding economy with an increasing population. If the population of taxpayers is decreasing with people living longer our population of pensioners is increasing it would be unsustainable.

fash

Widdensushi wrote: »

Because our pension pyramid scheme is built on an expanding economy with an increasing population. If the population of taxpayers is decreasing with people living longer our population of pensioners is increasing it would be unsustainable.

Or alternatively we could import very large quantities of immigrants from places where they are desperate to leave and willing to come over- I'm sure that will work well and not cause any problems whatsoever.

McGiver

Lads, some good ideas here but you're missing several points, perhaps due to lack of international comparison.

The urban myth of high taxes in Ireland is repeated ad nauseam. What high taxes? Income? Really? Have you ever been to Germany, France, Austria, Sweden, Belgium, Denmark, Portugal......

EU tax burden is assessed regularly. Last time I checked RoI was the 3rd lowest tax burden in the EU after tiny island tax havens Cyprus and Malta. Now, income tax, PRSI, USC and modelled VAT effect are included and it's calculated based on the average salary, so this geared more towards employees not businesses. Can't comment on businesses.

Income tax - stupid 0-20-40 cut-offs - this is a copy of old British version of the income tax system which clearly wasn't properly developed and thought about further - it must be made more progressive, with more bands, zero tax for lower income is unsustainable and unfair, also the shock between 20 and 40 is harsh; another option is to make it a flat tax rate, but would have to be assessed and complemented by a tax credit system so that lower income are not hit too hard

LPT - way too low, increase, gradually but steadily

CGT - way too high, decrease, and also add some reductions/exemptions for long term investors (both to the encourage investment amongst the general population)

VAT - can be and should be decreased now - 23% is way too high even during normal times

Carbon tax - can't see a way of avoiding that

Corporation tax - for a separate discussion; tax rate of 12.5% is the lowest in Europe and extremely competitive, no need to change; but assisted institutionalised tax avoidance reducing ETR to <1% is an issue

Welfare - agree with most ideas suggested such as scrapping the HAP. The fiscal impact isn't that big though, it's more a culture and values issue and signalling - the signalling should clearly be that work pays off and is better than welfare, which isn't exactly the case now. Surprised no one raised the bizarre situation where JSA and JSB are exactly the same and in fact JSB equals JSA only after the person has contributed PRSI for 5 years. This is absolutely wrong and not seen anywhere else in Europe. In Europe (DE, SV, AT CZ for example), when fired you get % of your last salary (e.g. 70% in Sweden for 6 months) usually capped at some coefficient/multiple of the average salary for X months and then if still unemployed you move to the basic dole (JSA here) which is much lower. Firstly, you must have contributed to the system to get the higher unemployment benefit - no contributions no benefits, it's simple. And secondly, this is fair, sensible and encourages work and contributions to the system.

McGiver

Hoboo wrote:

Why 3 kids, why not zero. Deal with hardship cases individually, I don't see why people should get rewarded or paid to add more bodies to a stretched economy and society, they should be taxed.

Because you need 2.2 kids to maintain the population. Shrinking the population has negative economic and other effects.

ELM327

McGiver wrote: »

Lads, some good ideas here but you're missing several points, perhaps due to lack of international comparison.

The urban myth of high taxes in Ireland is repeated ad nauseam. What high taxes? Income? Really? Have you ever been to Germany, France, Austria, Sweden, Belgium, Denmark, Portugal......

EU tax burden is assessed regularly. Last time I checked RoI was the 3rd lowest tax burden in the EU after tiny island tax havens Cyprus and Malta. Now, income tax, PRSI, USC and modelled VAT effect are included and it's calculated based on the average salary, so this geared more towards employees not businesses. Can't comment on businesses.

Income tax - stupid 0-20-40 cut-offs - this is a copy of old British version of the income tax system which clearly wasn't properly developed and thought about further - it must be made more progressive, with more bands, zero tax for lower income is unsustainable and unfair, also the shock between 20 and 40 is harsh; another option is to make it a flat tax rate, but would have to be assessed and complemented by a tax credit system so that lower income are not hit too hard

LPT - way too low, increase, gradually but steadily

CGT - way too high, decrease, and also add some reductions/exemptions for long term investors (both to the encourage investment amongst the general population)

VAT - can be and should be decreased now - 23% is way too high even during normal times

Carbon tax - can't see a way of avoiding that

Corporation tax - for a separate discussion; tax rate of 12.5% is the lowest in Europe and extremely competitive, no need to change; but assisted institutionalised tax avoidance reducing ETR to <1% is an issue

Welfare - agree with most ideas suggested such as scrapping the HAP. The fiscal impact isn't that big though, it's more a culture and values issue and signalling - the signalling should clearly be that work pays off and is better than welfare, which isn't exactly the case now. Surprised no one raised the bizarre situation where JSA and JSB are exactly the same and in fact JSB equals JSA only after the person has contributed PRSI for 5 years. This is absolutely wrong and not seen anywhere else in Europe. In Europe (DE, SV, AT CZ for example), when fired you get % of your last salary (e.g. 70% in Sweden for 6 months) usually capped at some coefficient/multiple of the average salary for X months and then if still unemployed you move to the basic dole (JSA here) which is much lower. Firstly, you must have contributed to the system to get the higher unemployment benefit - no contributions no benefits, it's simple. And secondly, this is fair, sensible and encourages work and contributions to the system.

I have family living in Germany and some former colleagues that moved to france and spain. The difference between there and here, is, while some tax rates may be higher, a) there is no punitive 40% (50%) at such a low salary as 34k, b) you get something for your taxes there, and c) cost of living is lower.

Also there's not as much welfare culture due to better policies (like what you mention in your last paragraph)

na1

Widdensushi wrote: »

Because our pension pyramid scheme is built on an expanding economy with an increasing population. If the population of taxpayers is decreasing with people living longer our population of pensioners is increasing it would be unsustainable.

I would hope I will be wrong, but I doubt that the grown up children of M. Cash are going to be taxpayers.
It would be much easier & cheaper to import new taxpayers from China.

Eric Cartman

Widdensushi wrote: »

Because our pension pyramid scheme is built on an expanding economy with an increasing population. If the population of taxpayers is decreasing with people living longer our population of pensioners is increasing it would be unsustainable.

but only if those children become taxpayers themselves. There is little to no point in incentivising the unemployed or non eu migrants to have children, as the chances of them being a net detractor from the state is massive. We should be encouraging middle and high income couples only to have children, their chances of being a net contributor to the tax net from day 1 are much higher and are much more likely to earn higher incomes , contributing more.

na1

McGiver wrote: »

Lads, some good ideas here but you're missing several points, perhaps due to lack of international comparison.

The urban myth of high taxes in Ireland is repeated ad nauseam. What high taxes? Income? Really? Have you ever been to Germany, France, Austria, Sweden, Belgium, Denmark, Portugal......

The German rate of marginal tax might be similar to Ireland, but the SERVICE people get for these taxes are not comparable:
public transport
infrastructure
health service
social protection for the workers

Geuze

na1 wrote: »

The German rate of marginal tax might be similar to Ireland, but the SERVICE people get for these taxes are not comparable:
public transport
infrastructure
health service
social protection for the workers

PRSI is 4% here, approx 20% in DE.

Their PRSI covers four insurances:

health - everybody has insurance
pension
unemployment
long-term care


On top of the 20% SI, they pay income tax as follows (single person):

0% up to 9,408 - this is much lower than out 16,500 starting point
then 14% up to 57k
then 42% to 270k
then 45%

Eric Cartman

Geuze wrote: »

PRSI is 4% here, approx 20% in DE.

Their PRSI covers four insurances:

health - everybody has insurance
pension
unemployment
long-term care


On top of the 20% SI, they pay income tax as follows (single person):

0% up to 9,408 - this is much lower than out 16,500 starting point
then 14% up to 57k
then 42% to 270k
then 45%

their threshold jumps up above 57k instead of our measly 32k , the band being wide down to 9408 is where It should be, we have too few people in the tax net, and the 14% up to 57k is a lot fairer. The prsi rates actually deliver a return of most of what you put in, the pension scheme is generous as are unemployed payments for the genuinely temporary unemployed.

somebody on 100,000 a year here gets to keep roughly the same as what somebody in Germany would get to keep , but the cost of living is a lot lower in the majority of Germany and they don't have to deal with as many stealth taxes, excise taxes etc... and thats only for 2020, germans have been paying a lot of increases as their government realises the pensions crisis is looming, our government still spits out too much to keep welfare and quangos alive.

na1

Geuze wrote: »

PRSI is 4% here, approx 20% in DE.

Their PRSI covers four insurances:

health - everybody has insurance
pension
unemployment
long-term care


On top of the 20% SI, they pay income tax as follows (single person):

0% up to 9,408 - this is much lower than out 16,500 starting point
then 14% up to 57k
then 42% to 270k
then 45%

https://www.brutto-netto-rechner.info/gehalt/gross_net_calculator_germany.php
Germany, 100k married person:
Net Salary: 5.307,20 €


http://services.deloitte.ie/tc

Ireland 100k married person:
Net Salary €5,412.00


On 120k the Germany is better.

na1

Eric Cartman wrote: »

The prsi rates actually deliver a return of most of what you put in, the pension scheme is generous as are unemployed payments for the genuinely temporary unemployed.
.

In Germany if you are on 100k and you've lost your job you get 60-70% of your salary for a year or so.

In Ireland if you are on 100k and you've lost your job you'll get LESS than the person on the dole for many years and who never worked.

Geuze

na1 wrote: »

In Germany if you are on 100k and you've lost your job you get 60-70% of your salary for a year or so.

In Ireland if you are on 100k and you've lost your job you'll get LESS than the person on the dole for many years and who never worked.

Yes.

And yet I never hear an politician here talking about increasing the gap between SI and SA.

JSB = JSA, but JSA get the Xmas bonus!!!!

An easy policy change - only give the bonus to JSB

Contributory pension is 11 euro pw more than non-con.

You work and pay PRSI for decades, and get 11 euro pw more than somebody that never worked.

Crazy.

jester77

na1 wrote: »

In Germany if you are on 100k and you've lost your job you get 60-70% of your salary for a year or so.

In Ireland if you are on 100k and you've lost your job you'll get LESS than the person on the dole for many years and who never worked.

After 1 year in Germany, you have to use savings, sell off assets they deem non-essential and downsize your property if they deem it too large before you get any further assistance.

na1

Geuze wrote: »

It was 64bn.

Bank shareholders were wiped out, and correctly so.

Bank depositors were protected, and bank senior bondholders.

So when people say "the banks were bailed out", what they mean is "I and my neighbours, and all the other people in Ireland who have deposits and bonds in banks" were bailed out.

The banks gave those billions to developers, and paid billions to bondholders as a "profits", ordinal account holders didn't get a cent from that.

The developers wasted the money on building ghost estates and on paying generous wages to construction workers

Then the state repaid those wasted money to the banks at the expense of taxpayers.

How did the ordinal taxpayer with a bank account on 0.00...1% interest has gained from that?