ESRI says we need more "progressive" taxes lol

fliball123

KyussB wrote: »

France/Germany don't control the ECB. The EU don't control the interest rates - the ECB does.

If you're worried about interest rates rising later, then that's actually an argument for maximum bond-issuance and spending now - so that we achieve recovery faster.

You do understand that fiscal spending is a key role for stoking inflation - that the ECB have been trying to get fiscal policy based inflation going for half a decade now, because monetary policy is tapped out?

You're looking at only small parts of the economic cycle, instead of looking at the whole cycle: The ECB raising rates is not a bad thing for us, because by then we'll have achieved economy recovery (unless we waste that potential by not spending now...).

The cycle goes:
Economic Slowdown > reduced inflation > reduces interest rates > increased government bonds/spending > economic recovery > increased inflation > increased interest rates > reduced government spending and decreased issuance of bonds > (until the next Economic Slowdown)

What I'm describing is just normal policy as part of the economic cycle - working harmoniously with the ECB, to use fiscal policy to stoke recovery when monetary policy is tapped out - but you are looking at only disjointed pieces of that cycle, instead of looking at it all as a whole.

No they dont but they dont just take one country and put its needs before the many either. As was proven by not being allowed burn bond holders back in the day.

The thing about entities such as the ECB and EU are they are not looking after micro-economies with in the one group. This is where your thinking is flawed what might be good for us will not be good for Germany and vice versa, yet the tools these large groups have at their disposal are blunt instruments you cannot give Ireland a preferential rate or debt forgiveness without any repercussions. As was proved back after the last crash with our austerity program. This has also has been pointed out you only need to look at the basket case that is Greece to see how the implementation of a EU wide policy does not favor everyone and in fact can inflict serious harm on individuals living in certain countries. So you actually have to look at the micro economies within the EU and realize that some countries are at polar ends with affordability, debt, deficit and a myriad of other indicators that make that countries position unique within the EU

RulesOfNature

fliball123 wrote: »

That would be the case if we had our own currency which we don't so we have absolutely zero control over it. So your modern monetary theory means jack sh1t. Money is being printed at the moment within Europe due to corona, wait till that tap gets turned off there as there will be no chance of France, Germany or any of the super powers in the EU will be listening to us as long as their economy is benefiting. They are also afraid of inflation. Its obvious you dont understand your a$$ from your elbow when it comes to such matters. So instead of trying to simplify things for others try and understand how printing money and the knock on effects impact countries. Ye know the whole picture

I work in finance and handle an eight figure asset fund LOL. Listen pal, you can throw all the worthless emotionally charged platitudes all you want but its clear to me and everyone that you got caught making an erroneous statement. The fact of the matter is, the fiat magic money tree does indeed exist.

Dont you work at a semi-skilled labor job? I would love to hear more about that from you, but please let the professionals talk about MMT and the economy.

KyussB

timmyntc wrote: »

Yes and bonds are rolled over and serviced which costs money. it is not free.

GDP growth from spending is not a certainty. Just ask Greece or Italy.

Which is exactly what I said in my post:

blanch152 wrote: »

That is only true if they are perpetual bonds, never having to be paid back.

I'm not saying it's directly the same. When you combine it with the fact that Public Debt is rolled over forever, and that the true cost is only the servicing cost - then it's pretty close to being a license to print, only with an added servicing cost (with that servicing cost being far less than the benefit from the GDP boost).

GDP is directly calculated based on Government Spending - by definition a massive increase in Government Spending is GDP growth - this is the calculation for GDP:
GDP = Government Spending + Consumption + Investments + (Exports - Imports)

KyussB

fliball123 wrote: »

No they dont but they dont just take one country and put its needs before the many either. As was proven by not being allowed burn bond holders back in the day.

The thing about entities such as the ECB and EU are they are not looking after micro-economies with in the one group. This is where your thinking is flawed what might be good for us will not be good for Germany and vice versa, yet the tools these large groups have at their disposal are blunt instruments you cannot give Ireland a preferential rate or debt forgiveness without any repercussions. As was proved back after the last crash with our austerity program. This has also has been pointed out you only need to look at the basket case that is Greece to see how the implementation of a EU wide policy does not favor everyone and in fact can inflict serious harm on individuals living in certain countries. So you actually have to look at the micro economies within the EU and realize that some countries are at polar ends with affordability, debt, deficit and a myriad of other indicators that make that countries position unique within the EU

I'm not talking about doing anything that the ECB hasn't already made available to all other EU countries. Nothing in your posts stops us.

timmyntc

RulesOfNature wrote: »

I work in finance and handle an eight figure asset fund LOL. Listen pal, you can throw all the worthless emotionally charged platitudes all you want but its clear to me and everyone that you got caught making an erroneous statement. The fact of the matter is, the fiat magic money tree does indeed exist.

Dont you work at a semi-skilled labor job? I would love to hear more about that from you, but please let the professionals talk about MMT and the economy.

Yes and my ma is Christine Lagarde

KyussB wrote: »

Which is exactly what I said in my post:

I'm not saying it's directly the same. When you combine it with the fact that Public Debt is rolled over forever, and that the true cost is only the servicing cost - then it's pretty close to being a license to print, only with an added servicing cost (with that servicing cost being far less than the benefit from the GDP boost).

GDP is directly calculated based on Government Spending - by definition a massive increase in Government Spending is GDP growth - this is the calculation for GDP:
GDP = Government Spending + Consumption + Investments + (Exports - Imports)

GDP is a crude term used for a general idea of government income - the direct impact of govt spending on GDP is not of use when it comes to borrowing costs. That borrowed money spent by government does not give much direct taxation back to the government which it could then spend on refinancing said debts. So while your statement is technically true, it doesnt really make the point you think it makes.

A state could borrow a load of negative bonds and still end up worse off in the long term due to a higher debt burden, and less capacity to service said debts in the future when they mature. It is far from a sure thing that government borrowing always yields a good return on investment. As I've said before, Greece and Italy are easy examples.

The ultimate point is that debt is not free money - even at 0% or negative rates it comes with a cost and a risk.

fliball123

RulesOfNature wrote: »

I work in finance and handle an eight figure asset fund LOL. Listen pal, you can throw all the worthless emotionally charged platitudes all you want but its clear to me and everyone that you got caught making an erroneous statement. The fact of the matter is, the fiat magic money tree does indeed exist.

Dont you work at a semi-skilled labor job? I would love to hear more about that from you, but please let the professionals talk about MMT and the economy.

Typical response when the facts are put out in front of you like Greece a case in point of what I am talking about and you have no idea what to say in return so you attack the man and not the post. We will see how far the magic money tree gets us when rates and inflation rise.

fliball123

KyussB wrote: »

I'm not talking about doing anything that the ECB hasn't already made available to all other EU countries. Nothing in your posts stops us.

Look I am not saying now is the time to stop borrowing far from it. my point is we cannot continue borrowing indefinitely. I dont think I ever said stop borrowing??

I was making the point that there are many threats to our income revenues and our debts that if they come to fruition in the next 3 - 7 years we maybe in bailout territory again. Along with how this money is spent as our spend side seems to be immune to cuts.

B2021M

View wrote: »

Disproportionately as in disproportionately to a person’s income.

Paying €30,000 in a flat tax will disproportionately hurt you a lot more if your income is €40,000 than if it is €400,000.

Believe it or not, but some countries even levy fines, speeding tickets etc based on annual income which resulted in one dot.com multi-millionaire in Finland getting a speeding fine one year of several hundred thousand Euro (admittedly it was his third offence that year). :-)

You do know i meant a flat % tax?!

Haha yeah i remember that. Ive no issue with a fine being a % of income!

View

KyussB wrote: »

Right now with the ECB's policies, it is...

The rate on the existing stock of debt doesn't spike, don't know where you're getting that from - the existing stock of debt has a fixed rate.

The ECB is not allowing another Euro crisis - the days of interest rate spikes, due to the threat of Euro disintegration, are over - why on earth would the ECB allow such a crisis to occur again? They have all the power they need to prevent it, now - unlike before.

Governments issue debt all the time. If you have a huge pile of pre-existing debt, and government revenues collapse due to a crisis, then the question of how you will fund new debt arises, and the rate on NEW debt can and does spikes, making new debt unaffordable. That’s what happened to Greece. Hence, running up increasing piles of debt does not work on a medium/long term basis, even if it is very attractive on a short term one.

Randle P. McMurphy

Yes. Let the poorer people pay more tax so us richer people can pay less. Makes perfect sense. :rolleyes:

fliball123

Randle P. McMurphy wrote: »

Yes. Let the poorer people pay more tax so us richer people can pay less. Makes perfect sense. :rolleyes:

makes as much sense as the same people paying more and more and more. Poor and Rich alike use the same services and those on the lower end pay very little in the the way of income tax. Being honest no one should be paying more tax our spend should be cut to ribbons.

Randle P. McMurphy

There's a very simple reason why those on the lower end pay very little in the the way of income tax. Are you people for real? You couldn't make this **** up.

fliball123

Randle P. McMurphy wrote: »

There's a very simple reason why those on the lower end pay very little in the the way of income tax. Are you people for real? You couldn't make this **** up.

Do they use services ?? Yes they do so they should pay something.

KyussB

timmyntc wrote: »

GDP is a crude term used for a general idea of government income - the direct impact of govt spending on GDP is not of use when it comes to borrowing costs. That borrowed money spent by government does not give much direct taxation back to the government which it could then spend on refinancing said debts. So while your statement is technically true, it doesnt really make the point you think it makes.

A state could borrow a load of negative bonds and still end up worse off in the long term due to a higher debt burden, and less capacity to service said debts in the future when they mature. It is far from a sure thing that government borrowing always yields a good return on investment. As I've said before, Greece and Italy are easy examples.

The ultimate point is that debt is not free money - even at 0% or negative rates it comes with a cost and a risk.

You are trying to shift the goalposts here - you said "GDP growth from spending is not a certainty" - and I showed you that by definition it's a certainty.

The discussion around debt servicing costs etc. etc. is separate to that point. You are wrong on that point.

The cost of not maximizing GDP from government spending, removes tens of billions of economic activity from the economy - whereas the debt servicing costs stay in the single digits generally.

There is no debate to be had - it is more expensive for the economy to be below Full Output, than to be servicing the debt needed to stay at Full Output - and this has been true even in high interest periods, you can look back at our lost GDP potential vs our debt servicing costs, and see that.

KyussB

fliball123 wrote: »

Look I am not saying now is the time to stop borrowing far from it. my point is we cannot continue borrowing indefinitely. I dont think I ever said stop borrowing??

I was making the point that there are many threats to our income revenues and our debts that if they come to fruition in the next 3 - 7 years we maybe in bailout territory again. Along with how this money is spent as our spend side seems to be immune to cuts.

All countries on the planet borrow indefinitely. That has been the standard done thing through all of modern macroeconomic history - going back centuries.

The stock of debt (not vs GDP) goes up consistently over time. Surpluses are incredibly rare, and usually shortly followed by economic crisis.

There are limits to borrowing/spending, yes - but the limit is Full Output and the inflation that generates - there is no arbitrary accounting limit.

Murph85

https://m.independent.ie/news/paying-child-benefit-to-all-parents-is-a-subsidy-for-them-to-have-sex-fine-gael-councillor-40462322.html

Some fg moron now proposing to hit primarily their own voters hardest, by removing child benefit... lol !

KyussB

View wrote: »

Governments issue debt all the time. If you have a huge pile of pre-existing debt, and government revenues collapse due to a crisis, then the question of how you will fund new debt arises, and the rate on NEW debt can and does spikes, making new debt unaffordable. That’s what happened to Greece. Hence, running up increasing piles of debt does not work on a medium/long term basis, even if it is very attractive on a short term one.

You restore government revenue by reflating the economy through spending, thus bringing tax revenue back up.

The ECB sets the rates. Learn the economic cycle: The ECB brings down rates in downturns.

The Euro Crisis era ECB did not have the power to provide the backing/support of a proper central bank, the way the ECB does today. Do not compare todays "whatever it takes" policies ECB, to the Euro Crisis era ECB.

Running up increasing piles of debt is the only way that government finances work - it is what every single country on the planet does, permanently! Look at the stock of debt (not vs GDP) of almost any country...

Wanderer78

Murph85 wrote:

Some fg moron now proposing to hit primarily their own voters hardest, by removing child benefit... lol !

Ffg are toast, their preferred ideologies are running out of air, continually failing, their era of governance is coming to an end

Pa ElGrande

Here is the ESRI report

Broad-based tax increases may be needed to fund future public spending

Increases in taxes on income, consumption and property may be needed to fund future public spending, according to new research published today by the ESRI.

Future spending pressures combined with potential declines in corporation and motor tax receipts mean that significant future tax increases are likely to be needed in the years ahead. While these should be avoided until the economy has recovered from the pandemic, the research shows that increases to income tax, VAT or the Local Property Tax could raise significant sums of revenue.


source

and


Options for raising tax revenue in Ireland (PDF)


Not only that.


Increase in sovereign debt aka Monetary Inflation since no state government has any intention to pay this back, but the interest bill is being kept artificially low by the ECB buying the debt. Eventually the ECB must go bust.


Asset Price Inflation, in particular housing driven by funds seeking yields primarily due to ECB interest rate policy and Real Estate Investment Trusts (REIT) taxation structure.

Consumer Price Inflation. Second round effects of many governments lock down policies over the past 12 months have led to supply shortages in many industries and combine that with the stimulus packages whereby more people are consuming but not producing.


Did I mention the cost of net zero green new deal energy transitions. All the numbers being pushed around for these schemes are made up, but the taxation increase is not . . .

https://www.youtube.com/watch?v=wzu1ToAxdFk

The nightmare returns, the people who lived through this in the 70s and 80s are all retired now. We will continue to be squeezed hard until this is inflation is wrung through the system.

KyussB

One thing to watch out for is the return of Libertarians trying to turn the signal-to-noise ratio to Zero on economic discussions. That is part of the cover that has been used for aiding austerity policies in the recent past.

The very idea of a central bank going bust involuntarily, is impossible. If a person doubles down on that concept instead of immediately distancing from it - that's a very reliable indicator that they're here to drag the signal-to-noise ratio down, and divert/block discussion.

fliball123

KyussB wrote: »

All countries on the planet borrow indefinitely. That has been the standard done thing through all of modern macroeconomic history - going back centuries.

The stock of debt (not vs GDP) goes up consistently over time. Surpluses are incredibly rare, and usually shortly followed by economic crisis.

There are limits to borrowing/spending, yes - but the limit is Full Output and the inflation that generates - there is no arbitrary accounting limit.

Have you looked at the challenges our corporation tax is facing? Up to half of what we take in could be going. If that happens our GDP will fall off a cliff. I agree we can borrow forever if there is a someone out there willing to lend. Now once the ECB have turned off the taps do you think the markets are going to lend to us unless they put a nice big fat margin on top for the risk they take. I reckon it will not be too long before no one in the market will lend to us as looking at Ireland now we are in a much bigger hole than after the last crash.

As rare as the deficits are we actually had one in 2019 - we had our rainy day fund. That fact alone would suggest to me that the debt is too large and is going to cause us major problems borrowing into the future.

We were the third most in debted country in the world in 2019 and we are the already in 2021 we are the highest debt per head in Europe this year.

https://www.irishtimes.com/business/economy/ireland-to-have-highest-debt-per-head-in-europe-this-year-1.4503652

We will see where we are after corona is gone I reckon with in 5 years we will be in a postilion where we will only be able to borrow from the lender of last resource they will ask us to get our house in order.

So in theory you can borrow on the never never but hard choices are going to have to made that will means cuts , tax increases and austerity for all basically something like what happened in Greece in order to keep borrowing.

I would rather we were trying to get our spend in order before being told to do so

fliball123

KyussB wrote: »

You restore government revenue by reflating the economy through spending, thus bringing tax revenue back up.

The ECB sets the rates. Learn the economic cycle: The ECB brings down rates in downturns.

The Euro Crisis era ECB did not have the power to provide the backing/support of a proper central bank, the way the ECB does today. Do not compare todays "whatever it takes" policies ECB, to the Euro Crisis era ECB.

Running up increasing piles of debt is the only way that government finances work - it is what every single country on the planet does, permanently! Look at the stock of debt (not vs GDP) of almost any country...

So what happens if they dont spend at the rate that is needed to plug a 17Billion and rising deficit? Its one hell of a gamble.

timmyntc

KyussB wrote: »

You are trying to shift the goalposts here - you said "GDP growth from spending is not a certainty" - and I showed you that by definition it's a certainty.

The discussion around debt servicing costs etc. etc. is separate to that point. You are wrong on that point.

The cost of not maximizing GDP from government spending, removes tens of billions of economic activity from the economy - whereas the debt servicing costs stay in the single digits generally.

There is no debate to be had - it is more expensive for the economy to be below Full Output, than to be servicing the debt needed to stay at Full Output - and this has been true even in high interest periods, you can look back at our lost GDP potential vs our debt servicing costs, and see that.

Full output is economic theory and doesnt actually have a hard and fast meaning - full employment usually, but one mans full output and anothers are totally distinct. Full employment from mostly private sector jobs is much healthier for govt finances than full employment from mostly public sector. Full output is a wishy-washy term used by economists who dont live in the real world. The reality is its not quantifiable, theres an argument you could always be chasing full output - and when you have noone else left to work, you can import more labour - do you go beyond full output then?

IngazZagni

Murph85 wrote: »

https://m.independent.ie/news/paying-child-benefit-to-all-parents-is-a-subsidy-for-them-to-have-sex-fine-gael-councillor-40462322.html

Some fg moron now proposing to hit primarily their own voters hardest, by removing child benefit... lol !

So paying a billionaire and someone on the minimum wage the same amount in child benefits is the correct thing to do?

I would have thought the left could be in favour of such a thing?

AlfaZen

IngazZagni wrote: »

So paying a billionaire and someone on the minimum wage the same amount in child benefits is the correct thing to do?

I would have thought the left could be in favour of such a thing?

Its paid to the child not the billionaire.

But if we were to get ideological about it and make it "fairer" I would tax it as income.

Wanderer78

timmyntc wrote: »

Full output is economic theory and doesnt actually have a hard and fast meaning - full employment usually, but one mans full output and anothers are totally distinct. Full employment from mostly private sector jobs is much healthier for govt finances than full employment from mostly public sector. Full output is a wishy-washy term used by economists who dont live in the real world. The reality is its not quantifiable, theres an argument you could always be chasing full output - and when you have noone else left to work, you can import more labour - do you go beyond full output then?

we must also realise, not all private sector economic activities are truly beneficial to all, many private sector industries are largely engaging in rent seeking behaviors, which is in fact just simply extracting wealth and money from the economy, reducing overall economic activities. we need to create economies whereby we reduce these kind of outcomes, preferably eliminating them, which wont be easy, by having some sort of symbiosis between both public and private sectors

IngazZagni

AlfaZen wrote: »

Its paid to the child not the billionaire.

But if we were to get ideological about it and make it "fairer" I would tax it as income.

It’s not though is it? It’s basically cash in hand to the parent. They can choose how they spend it.
Perhaps it should be a voucher for children’s clothes and school books etc.

As for taxing it as income it still means those on modest wages will get the same as the rich.

Fred Cryton

Wanderer78, KyussB and Murph85....what is this, the Commie and Socialist support group? Can you get off my thread please, you kids need to go back to school.

Wanderer78

Fred Cryton wrote: »

Wanderer78, KyussB and Murph85....what is this, the Commie and Socialist support group? Can you get off my thread please, you kids need to go back to school.

ive no idea what you re on about, ive no interest in communism or socialism, as capatalism has clearly shown its value to humanity, but since ive literally little or no knowledge of these ideologies, id be very grateful if you can explain how you think so?

tjhook

AlfaZen wrote: »

Its paid to the child not the billionaire.

But if we were to get ideological about it and make it "fairer" I would tax it as income.

For me it depends on what the government would do with the savings. If they throw it at whichever lobby is currently loudest, I wouldn't be in favour. I'd rather the billionaire (and the rest of us) keeps it.