Higher taxes inevitable because of COVID19

Triangle

El_Duderino 09 wrote: »

Yeah now's the time to do it. Plenty of people will be in need of the work and it's work that needs to be done. Borrowing while money is cheap means now is the perfect time to do it.

I agree we need to spend to get through covid.

But this idea of borrowing now as interest is low is an incredible thought. It WILL need to be refinanced and looking at the next 30 odd years, there is currently only two that have small/medium amounts that need to be refinanced (or repaid) the rest have large amounts.

Eric Cartman

jester77 wrote: »

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.

paying your own way in life, well that certainly is completely and utterly....reasonable.

howamidifferent

But but but the gubberment are robbin us!

perfectkama

Eric Cartman wrote: »

paying your own way in life, well that certainly is completely and utterly....reasonable.

We will never have a politician who would touch it raising taxes is easier SW vote is so big anyway.
Only will be tackled in the next bailout when all the TDs are brought into a room and there salary cuts are negotiated

antimatterx

jester77 wrote: »

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.

I love this, this is common sense. We should really adopt it.

na1

jester77 wrote: »

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.

That's good thing, isn't it?
1 year might be little harsh, but if you can't find a job in 2 years, you're probably not looking for a job?

Anther good thing they have: if you are a long time 'seeker' you can't wok for cash, you are asked to do a community service.

McGiver

ELM327 wrote:

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.

Incorrect, it's not simply true and it needs to be repeated. And that's just Germany. I won't even go to France, Sweden or elsewhere for income taxes, they are much worse.

DE - 45000 brutto - 29890 nett (36% effective)
IE - 45000 brutto - 34200 nett (24% effective)

This would diverge if you went to 60k+ wages.

Happy share the comparison of tax burden between all EU countries, I did it last year.

I agree they get public services and infrastructure for the tax paid. Although not everywhere, Portugal and most of Italy come to mind. But that doesn't change the fact that Irish tax burden is amongst the lowest in the EU.

na1

McGiver wrote: »

Incorrect, it's not simply true and it needs to be repeated. And that's just Germany. I won't even go to France, Sweden or elsewhere for income taxes, they are much worse.

DE - 45000 brutto - 29890 nett (36% effective)
IE - 45000 brutto - 34200 nett (24% effective)

That literally means that the tax net is wider in Germany,
The tax contributions are distributed more evenly in Germany, when lower & middle classes are doing their contribution to the State budget.

facehugger99

Triangle wrote: »

I agree we need to spend to get through covid.

But this idea of borrowing now as interest is low is an incredible thought. It WILL need to be refinanced and looking at the next 30 odd years, there is currently only two that have small/medium amounts that need to be refinanced (or repaid) the rest have large amounts.

Most of the people who have suddenly become converts to an anti-cyclical fiscal policy are the same 'can't someone else pay for it' brigade in a different guise.

In this case the 'someone else' becomes the future generations that will be saddled with our debt. One of the posters on this thread is a fully signed up member of the money-tree persuasion. People should be incredibly suspicious of their motives

There is nothing wrong with an anti-cyclical approach as long as money is taken out of the economy during the boom times to pay back the debt - that is something none of the populist parties of this country ever support, quite the opposite in fact as they each try and outdo the auction politics of the other.

We do not have a mature enough electorate or political class to adopt these polices in my view and are therefore consigned to repeating austerity and bust cycles

fash

na1 wrote: »

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.

I hope you are happy with the current rate of construction in the country /the lack of accommodation/the high rents then - because you ain't getting more construction workers in from abroad based on non-generous wages.

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

Banks were giving out super juicy 6% interest rates at the time -I don't know about you but I made loads off that. I remember when I pulled money out of an Anglo account because the rate fell from about 6% to the minimum after a while and the Anglo customer service guy on the call was getting pissed off at me not keeping my money in there (slightly before the run on it).

McGiver

na1 wrote:

That literally means that the tax net is wider in Germany, The tax contributions are distributed more evenly in Germany, when lower & middle classes are doing their contribution to the State budget.

Yep that's an issue I said needs addressed.

But overall, Ireland is low tax, at least at average salary level. I could run the calculations for say double the average wage but I don't have the data and don't have time to find it. The regular tax burden assessment reports use average wage and just need a few calculations to finalise.

It wouldn't be much different, in most countries the higher brackets are higher than 40% and also there's much higher social and/or mandatory health insurance. Overall Ireland is low tax but also small state.

What is weird in Ireland is the combo of relatively low tax, small state (services and investment) but rather larger unbalanced welfare. That's unique indeed

ELM327

McGiver wrote: »

Incorrect, it's not simply true and it needs to be repeated. And that's just Germany. I won't even go to France, Sweden or elsewhere for income taxes, they are much worse.

DE - 45000 brutto - 29890 nett (36% effective)
IE - 45000 brutto - 34200 nett (24% effective)

This would diverge if you went to 60k+ wages.

Happy share the comparison of tax burden between all EU countries, I did it last year.

I agree they get public services and infrastructure for the tax paid. Although not everywhere, Portugal and most of Italy come to mind. But that doesn't change the fact that Irish tax burden is amongst the lowest in the EU.

How does that address any of the three points I made?


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.

na1 wrote: »

That literally means that the tax net is wider in Germany,
The tax contributions are distributed more evenly in Germany, when lower & middle classes are doing their contribution to the State budget.

Precisely.
And if you compare it to our closest neighbors, the higher rate kicks in at 50k stg. You get free access to a GP, motor tax is lower, and , while you pay a council tax, this covers a lot of things that we have to pay for over here.

na1

fash wrote: »

I hope you are happy with the current rate of construction in the country /the lack of accommodation/the high rents then - because you ain't getting more construction workers in from abroad based on non-generous wages.

more than!))

Geuze

McGiver wrote: »

Incorrect, it's not simply true and it needs to be repeated. And that's just Germany. I won't even go to France, Sweden or elsewhere for income taxes, they are much worse.

DE - 45000 brutto - 29890 nett (36% effective)
IE - 45000 brutto - 34200 nett (24% effective)

This would diverge if you went to 60k+ wages.

Happy share the comparison of tax burden between all EU countries, I did it last year.

I agree they get public services and infrastructure for the tax paid. Although not everywhere, Portugal and most of Italy come to mind. But that doesn't change the fact that Irish tax burden is amongst the lowest in the EU.

I think ELM327 was referring to the top MTR of 50% approx starting at 35/36k in Ireland.

Ok, the German effective ATR is higher, but their marginal rate can be lower.

They don't reach 42% MTR until 57,500.

KyussB

na1 wrote: »

That's good thing, isn't it?
1 year might be little harsh, but if you can't find a job in 2 years, you're probably not looking for a job?

Anther good thing they have: if you are a long time 'seeker' you can't wok for cash, you are asked to do a community service.

A quick look at the 'very long term unemployment' stats, show that a huge number of people are unemployed that long, when there are not enough jobs - i.e. during a long downturn like the last decade and a bit - and that this figure does reduce during a recovery.

So, the only way to ensure that 1: genuinely unemployed are not denied what their tax contributions entitle them to, and 2: the 'genuine scroungers' are not allowed to make fraudulent claims - is to have a Job Guarantee where all of the unemployed are guaranteed temporary employment by the state.

This perfectly solves the issues of long term unemployment, welfare fraud, making sure public money doesn't go to waste (it is exchanged for work instead), and the need for work to be done on an extremely wide range of public projects (particularly housing), that are being badly neglected.

So surely those that are so critical of welfare and the waste in unemployment payments, can get behind a proper Job Guarantee, which makes the best use of public money, while keeping opportunities and financial stability available, for the unemployed?

KyussB

facehugger99 wrote: »

Most of the people who have suddenly become converts to an anti-cyclical fiscal policy are the same 'can't someone else pay for it' brigade in a different guise.

In this case the 'someone else' becomes the future generations that will be saddled with our debt. One of the posters on this thread is a fully signed up member of the money-tree persuasion. People should be incredibly suspicious of their motives

There is nothing wrong with an anti-cyclical approach as long as money is taken out of the economy during the boom times to pay back the debt - that is something none of the populist parties of this country ever support, quite the opposite in fact as they each try and outdo the auction politics of the other.

We do not have a mature enough electorate or political class to adopt these polices in my view and are therefore consigned to repeating austerity and bust cycles

Government finances do not work like household finances...Public Debt vs GDP is typically eroded away by growing GDP, not by strangling the economy to reduce the stock of Public Debt...

You target inflation levels when it comes to government finances, you do not target an accounting balance. If government finances run a surplus, it should only be incidental, as a side effect of trying to dampen down inflation in parts of the economy that may be overheating.

So nobody is against taking money out of the economy - it needs to be done only for managing inflation and overheating sectors of the economy though, not for arbitrary accounting reasons, at the expense of the real economy and the people in it.

jester77

ELM327 wrote: »

How does that address any of the three points I made?


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.





Precisely.
And if you compare it to our closest neighbors, the higher rate kicks in at 50k stg. You get free access to a GP, motor tax is lower, and , while you pay a council tax, this covers a lot of things that we have to pay for over here.

Cost of living is not much lower. The weekly shopping might be and eating out as well, but everything else is not. Electricity prices are significantly higher, water is paid for and not cheap, property tax is much higher, TV license is much higher, health insurance is mandatory (I pay well over 600 a month for a basic plan just for myself, before kids are added).

I would have a lot of extra money in my pocket every month living in Ireland on the same salary that would more than cover the difference in the weekly shopping.

fash

https://twitter.com/GerardBrady100/status/1232631512702574592?s=20
Thought this was relevant.

Really highlights the fact that Ireland has unusually generous social welfare and likely to make up for that, low taxes on wages which are similar or not much higher than social welfare.

Other countries - at least partly because they've been wealthy longer and have built significant infrastructure and public facilities - can afford to have much more limited social welfare.

ELM327

jester77 wrote: »

Cost of living is not much lower. The weekly shopping might be and eating out as well, but everything else is not. Electricity prices are significantly higher, water is paid for and not cheap, property tax is much higher, TV license is much higher, health insurance is mandatory (I pay well over 600 a month for a basic plan just for myself, before kids are added).

I would have a lot of extra money in my pocket every month living in Ireland on the same salary that would more than cover the difference in the weekly shopping.

That's interesting because one of my former colleagues and drinking buddy moved from Dublin to Berlin in the past 3 years on the same salary (in the 50-70k EUR bracket) as he was on here, and said that while he gets less raw EUR in his takehome pay, it goes much further as cost of living is much cheaper. Now, I know it's anecdotal based on one person... but so is your post.

Tea drinker

KyussB wrote: »

A quick look at the 'very long term unemployment' stats, show that a huge number of people are unemployed that long, when there are not enough jobs - i.e. during a long downturn like the last decade and a bit - and that this figure does reduce during a recovery.

So, the only way to ensure that 1: genuinely unemployed are not denied what their tax contributions entitle them to, and 2: the 'genuine scroungers' are not allowed to make fraudulent claims - is to have a Job Guarantee where all of the unemployed are guaranteed temporary employment by the state.

This perfectly solves the issues of long term unemployment, welfare fraud, making sure public money doesn't go to waste (it is exchanged for work instead), and the need for work to be done on an extremely wide range of public projects (particularly housing), that are being badly neglected.

So surely those that are so critical of welfare and the waste in unemployment payments, can get behind a proper Job Guarantee, which makes the best use of public money, while keeping opportunities and financial stability available, for the unemployed?

Broadly agree with the above but the welfare can erode the work ethic.
If you can "get by" and get a house stress free without working then sooner or later a lot of normal good people will make the decision not to return to work.
And then the kids get the "non work ethic" as a bonus.

Something seriously wrong in getting money for nothing, the work ethic, confidence ruining is quite anti social.

Tea drinker

Madeleine Birchfield wrote: »

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

The only thing that got us through Covid was the MNC's. We need to be very careful about how we tax and give tax breaks there. The culture of MNC coming to Ireland to setup is not something we want to discourage.

McGiver

ELM327 wrote:

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.

A) that's completely irrelevant - the effective rate is what matters - overall much higher in the other countries including Germany.

What's punitiveabout 40% above 35k if the rest is taxed at 20%? At 35k the tax rate is 20%, at 45k it's a bit more but still not 40%.

At 70k the effective tax is 30% in Ireland. Basic maths. You know what the effective tax would be in Finland or Portugal for this salary? You don't want to know.

The rate in Germany is just geometrically progressive from 14+5.5% to 42+5.5%.

The stupid 0-20-40 tax bands in Ireland with no progression look punitive but effective rate is what matters. And it's low in here.

Plus add mandatory health insurance collected at source, much higher social insurance and you get to the 36% effective versus 24% for a 45k salary.

No question about and C) varies hugely in Germany for example.

Geuze wrote:

Ok, the German effective ATR is higher, but their marginal rate can be lower.

Effective tax rate or rather % of what the state takes off you from salary is all what counts everything else is a mumbo jumbo manipulation.

Geuze wrote:

They don't reach 42% MTR until 57,500.

You forgot the 5.5% surcharge. The rates progress from 14% to 42% + 5.5% on top of that.

Plus potential church tax 8% on top, but that's out of scope

McGiver

McGiver wrote:

At 70k the effective tax is 30% in Ireland. Basic maths. You know what effective tax would be in Finland or Portugal for this salary? You don't want to know.

70k salary single, statutory health insurance, social insurance included, average tax rates

IE - 33%
FI - 40%
DE - 42%
PT - 42.5%

Etc, repeat for every single country. IE is the lowest, bar Malta & Cyprus.

Tea drinker

McGiver wrote: »

70k salary single, statutory health insurance, social insurance included, average tax rates

IE - 33%
FI - 40%
DE - 42%
PT - 42.5%

Etc, repeat for every single country. IE is the lowest, bar Malta & Cyprus.

USC is what, about 4K on that? Everyone in Ireland on 70K is also paying health insurance 1 - 2 K I guess dependent circumstances and cover. Is that the same rest of EU?
So that's what another 6% ?

Also most of EU is in NATO and are bound to spend 1 - 2% of GDP on defence and wars around the world, so that is some .5% tax on that?

And then there the incidentals like 50% tax on fuel though I think EU has largely caught up there.

Inheritance tax among the highest in the world? :
The UK and Ireland take the highest proportion of inheritance or estate taxes of any major world economies, according to a new study by UHY, the international accountancy network.

https://www.uhy.com/uk-imposes-highest-taxes-on-inheritance-of-all-major-economies/#:~:text=The%20study%20also%20found%20that,the%20global%20average%20of%207.67%25.

Ireland has to keep low tax rates in the bottom brackets otherwise no one would work there.

Triangle

KyussB wrote: »

Government finances do not work like household finances...Public Debt vs GDP is typically eroded away by growing GDP, not by strangling the economy to reduce the stock of Public Debt...

You target inflation levels when it comes to government finances, you do not target an accounting balance. If government finances run a surplus, it should only be incidental, as a side effect of trying to dampen down inflation in parts of the economy that may be overheating.

So nobody is against taking money out of the economy - it needs to be done only for managing inflation and overheating sectors of the economy though, not for arbitrary accounting reasons, at the expense of the real economy and the people in it.

I'm genuinely interested in this.

So we had a debt of around 50billion pre the last recession. After it, we had a debt of 240 billion.

If we don't repay the debt, and keep borrowing at each recession - where does it go pear shaped - or more to the point, what stops the debt rising to unsustainable levels?

fash

Triangle wrote: »

I'm genuinely interested in this.

So we had a debt of around 50billion pre the last recession. After it, we had a debt of 240 billion.

If we don't repay the debt, and keep borrowing at each recession - where does it go pear shaped - or more to the point, what stops the debt rising to unsustainable levels?

State debt to GDP went from a high of 120% down to 58% (or probably lower) prior to covid. You can be reasonably sure we didn't pay down any of that debt.

LuasSimon

Couple of basic methods of saving/collecting new monies

Stop Children Allowance at 3 children.

A tax on second and subsequent owned properties ( Wealth tax more or less)

Eric Cartman

McGiver wrote: »

70k salary single, statutory health insurance, social insurance included, average tax rates

IE - 33%
FI - 40%
DE - 42%
PT - 42.5%

Etc, repeat for every single country. IE is the lowest, bar Malta & Cyprus.

at 70k , Ireland does not stay the lowest the higher you go, particularly over 100k

Triangle

fash wrote: »

State debt to GDP went from a high of 120% down to 58% (or probably lower) prior to covid. You can be reasonably sure we didn't pay down any of that debt.

But I thought using GDP in Ireland was 'leprauchaun economics' and GDI was better.

But I see it went from 212% in 2009 to 126% in 2018.

But even the GDP debt ratio was 23% just before the recession, so its increased. And it was hard to get finance then. If it increases again and another recession hits before it drops (to current levels), won't that not make it increase again?
And if the cycle continues .....

Or is it that the cycle isn't meant to continue?

KyussB

Tea drinker wrote: »

Broadly agree with the above but the welfare can erode the work ethic.
If you can "get by" and get a house stress free without working then sooner or later a lot of normal good people will make the decision not to return to work.
And then the kids get the "non work ethic" as a bonus.

Something seriously wrong in getting money for nothing, the work ethic, confidence ruining is quite anti social.

I agree on work ethic and such - and I'd go even further, and say that employment and the (guaranteed) opportunity for work, is critically important for most peoples self esteem and mental health - not just due to the stresses of unemployment, financial commitments, and impact on life opportunties - but because I believe most people want to contribute to society, feel judged by others when they perceive themselves as not contributing enough through work/taxes, and (even if people aren't happy with their jobs) that people take some amount of pride in their contributions.

So ya, there are a lot of varied and very good reasons, to view long-term unemployment as being extremely unjust and damaging for the unemployed, and that most (the vast majority I would say) of the unemployed have a good work ethic and will take up the opportunity for good work, if it's guaranteed to them.