Budget 2024 - The Squeezed Middle

Blarney_man

https://www.boards.ie/discussion/comment/121213359#Comment_121213359

And lower tax for middle earners, it's just putting oil on fire, I don't care, but I'm worried about people who have big mortgages and are renting at the moment, this crash will be a monster, 2008. is a baby

hotmail.com

Extra 12 quid for the dole.

Blarney_man

https://www.boards.ie/discussion/comment/121215289#Comment_121215289

Like what the f do you want, you don't even work ffs 🤣

DataDude

https://www.boards.ie/discussion/comment/121215892#Comment_121215892

Agreed, it’s a great income. But, rightly or wrongly, with a big mortgage and childcare costs it could easily start to ‘feel’ like things are a bit tight. You’re certainly not driving around in Ferraris like some people might think.

It’s all relative anyway. A large proportion of the worlds population would look at minimum wage employees in Ireland and not be able to fathom their amazing quality of life and how they could ever need more - It’s easy to look at people who earn more than you and scoff at them if they complain about anything.

As a secondary point they’re also the income group who got hammered by the tax increases in the recession. Someone on €250k loses €1,400pm to the USC. Even someone on €70k only loses €200pm. A median income worker loses basically nothing. It is right and natural that the better off pay most when the exchequer is in trouble, but it then has to follow they get the most back when exchequer is in good health. Yet this is always frowned upon when it comes to it.

It is clear that increasing taxes on higher earners in bad times but actively avoiding giving anything back in good times is totally unsustainable. You can only go to the well of ‘tax the person earning more than me’ so many times before it stops working.

Blut2

https://www.boards.ie/discussion/comment/121216044#Comment_121216044

"You can only go to the well of ‘tax the person earning more than me’ so many times before it stops working."

We have empirical historical evidence that thats not the case, though. The US top marginal tax rate was 92% in the 1950s and high earners still worked in law, finance, medicine and ran their own businesses. They didn't all suddenly decide to stop working, as Varadkar's wing of FG is prone to claiming is about to happen any day here at our much much lower top marginal rate.

Once you get beyond a certain point of income money is no longer the primary motivation for people, its the sense of satisfaction/achievement, social interaction, and/or social status from their careers.

In a country with 3500 homeless Irish children tonight its absolutely ridiculous to be giving any money back to people in the top 10% of income in the country. House the children, hire more gardai, pay our nurses and teachers fairly so they'll stop emmigrating, and then get around to tax cuts for the wealthy.

eightieschewbaccy

I make a pretty comfortable salary and honestly have no issue with welfare increases and would prefer for any cuts to affect lower income workers. And that's where it should be targeted.

DataDude

https://www.boards.ie/discussion/comment/121216225#Comment_121216225

Effective US income taxes on the top 1% in 2023 are largely the same as the were in the 50s because the much talked about 90%+ rates were paid by almost nobody.

They were levied at incomes 10-15x higher than our current top rate. And crucially, at those wealth levels, people are rarely PAYE doctors/lawyers etc.

Tax avoidance/income under-declaration also increase as marginal rates go higher and people at those wealth levels can avail of much cleverer tax planning.

Throw in the globalisation of the world economy and ease of travel now vs the 50s, it’s a pretty poor comparison to draw.

On your last point. Every country will always have something to throw money at. 2023 Ireland is one of the best places in world history to live yet we still have our problems to fix. I agree with you there. Believing the quickest/best way to solve all of those problems is simply ‘taxing the rich more and giving it to the government to spend on stuff’ is a valid economic ideology, but not one I personally subscribe to.

Ironically, I know 3 newly minted medical consultants who’ve left Ireland/decided not to come back in the last 18 months because of the after tax incomes they generate in US. But sure, increase taxes to clear those hospital waiting lists. I’m sure sending more money into the HSE won’t be squandered at all…

Blut2

https://www.boards.ie/discussion/comment/121216329#Comment_121216329

The top marginal rates of 93% in the US were paid by over 10,000 households in the 1950s, nowhere near "almost nobody". The idea that they're largely the same in 2023 is blatently incorrect.

Its not just the US, either - top marginal tax rates were over 90% in the UK, over 75% in Germany, over 70% in France (in the 1980s, not 1950s..) etc wthin living memory. The idea that Ireland's top marginal tax rate of of 52% is unsustainably high is just nonsense. Even right now in Europe there are multiple countries with higher top marginal tax rates - 57% in Finland, 56% in Denmark, 55% in Austria etc. Ireland could at the very least clearly raise the top marginal tax rate to match them.

"Every country will always have something to throw money at." -- so just to be clear, with the limited pool of money available to the state are you saying in October 2023 its better to reduce taxes on someone earning over €100k a year, instead of paying a newly qualified nurse earning €34k a year more? Because every euro spent on tax cuts for the wealthy is literally a euro that could be better spent elsewhere.

DataDude

https://www.boards.ie/discussion/comment/121216540#Comment_121216540

10,000 households in a population of 150,000,000+ is essentially nobody in a statistical sense. There is a reason not a single modern functioning country has 70/80/90%+ income tax rates in 2023. By definition, that means every country who ever did have them, got rid of them fairly sharpish. I wonder why.

Ireland already has the most progressive tax system in the OECD. https://www.oecd.org/gov/gov-at-a-glance-2021-ireland.pdf

The latter point is over simplistic. You will always have people with more and people with less. Saying the answer is always taxing people with more to give to the government to spend on ‘stuff’ is a political/economic idealogy which some agree with and others don’t which is fine.

Your example of the nurse is a great example of something based on emotion rather than outcome based. As someone who’s entire family works in the HSE - my contention is the inability to fill medical consultant posts is a far bigger issue than nurses posts. Therefore tax cuts/pay increases for consultants (top 5%?) would be a better use of government funds for the public outcomes than pay increases for nurses - but of course less popular.

The other major problem in Ireland is housing. I truly believe more money to the state to spend on housing will make our problems worse at least in the short/medium run as it will find its way into schemes like HAP which inflate rentals. They can’t spend their capital budgets in housing aa is and if they ever start building in a big way, watch the cost of building a house rise faster than the children’s hospital.

realitykeeper

If the government follows through with it's threat against people trying to get on the property ladder, emigration of the country's youth will accelerate. Given tax breaks to mortgage holders is designed to prevent the defaults which are needed if property is ever to become affordable to young people.

Shame on the government.

lbunnae

https://www.boards.ie/discussion/comment/121216540#Comment_121216540

Hahahah 10k households in America and you aren't calling that almost nobody? Stats not your strong point.

PopePalpatine

https://www.boards.ie/discussion/comment/121215684#Comment_121215684

It's almost as if they know their voter base.

lbunnae

https://www.boards.ie/discussion/comment/121216942#Comment_121216942

Exact same thoughts myself.

SharkMX

https://www.boards.ie/discussion/comment/121215684#Comment_121215684

Lived in Glencairn years ago. The M50 noise used to drive me nuts. Some people must get used to it though because the neighbors all said they didnt notice it and they lived there for years. I had to move out though. Couldnt even sit in the garden or open the windows.

Quitelife

https://www.boards.ie/discussion/comment/121213623#Comment_121213623

The 250K couple that cant survive Probaby relates to a couple One working as a Columnist in the Irish Independent & Their spouse working in RTE - Both living a bubble the Indo/RTE think is normal Ireland !

jaffa20

It sounds like someone on the lower rate of tax will not be benefiting at all from any USC cuts. Possibly they will give more tax credits only.

enricoh

https://www.boards.ie/discussion/comment/121216225#Comment_121216225

The top 10% of earners are in much demand worldwide, it's debatable what they get for paying so much tax here. Our welfare class are not so much in demand worldwide yet still get it shovelled out every budget!

Multinationals are increasingly complaining they can't convince required staff to move here due to high taxes n no housing. If the multinationals relocate it's goodnight Vienna.

hotmail.com

The whole budget has been leaked. What a farce.

bren2001

https://www.boards.ie/discussion/comment/121217119#Comment_121217119

Would you prefer it was a secret?

https://www.boards.ie/discussion/comment/121217273#Comment_121217273

..

ELM327

In fairness it's usually "leaked" to the papers the day of the announcements which is today anyway. No big deal.

Am I the only one concerned at this being another giveaway budget? It feels like 2007, with the CT take dropping but we're spending like there's no tomorrow? At least there's measures actually targeted at the squeezed middle for once - the 42.5k band and the usc cut and the tax credit increase are great - this seems like money for everyone. And in these inflationary times is that a good idea?

I was listening to a podcast yesterday which mentioned the shinner's alternative budget had less increases to SW payments than what the FFG budget will have. That's insane.

Oh and there's apparently more electricity credits.

tom1ie

Folks does anyone know if this 25% cut in childcare costs (supposedly in the budget) will translate over to private childcare crèches, as it was stated on the news that it was public only childcare crèches (which I imagine is the majority of crèches in Ireland?)

thanks.

Bacchus

I'm also quite disappointed at the uninspired approach to the budget. It's a "one for everyone in the audience and don't forget to vote for me" budget. I really wish they could try and put public services front and center. The one good thing I see out of it so far is the book scheme extending to secondary school. The CAMHS funding also sounds like a positive action. But I'd like to see ambition (not just throwing €€€ into a pit as though it'll fix things) on the health sector, teaching, and emergency services. My wife has worked close to 20 years now in disability services and it's criminal how poorly managed and funded the sector is. And managed is a key word, the amount of waste that goes on, pointless meetings, inefficient waiting lists, staff training, etc. That can apply to many public sectors I'm sure, so I'm wary of just throwing money at a problem and solving nothing. Like I said, show some ambition and reform in parallel with the budget. I hope this budget at least will relieve some pressure on people who are struggling but they'll still be struggling this time next year (sorry for generalizing) and we'll still have the same creaking public sector as we've always had.

ELM327

https://www.boards.ie/discussion/comment/121217404#Comment_121217404

Health is a department with so much bloat it's ridiculous. I agree with you that more money won't solve the problem. They could trim the fat by removing half the middle managers with no impact.

DataDude

https://www.boards.ie/discussion/comment/121217086#Comment_121217086

Someone not paying higher rate of USC on €22,920 currently pays €2,229 in tax. An effective rate of 9.7%. With the rumoured €200 increase in tax credits they will now pay €2,029. This is a 9% cut in their tax bill next year, reducing their effective tax rate to 8.9%.

Someone on €100,000 currently pays €37,245 in tax. An effective rate of 37.2%. The proposed changes in USC, tax credits and income tax bands will reduce their tax bill by €835. This a 2.2% cut in their tax bill, reducing their effective income tax rate from 37.2% to 36.4%.

Lower income earnings are gaining more proportionally from the tax cuts than higher income earners due to the outsized impact of tax credits on their tax bills. The focus on savings in euro terms is poor maths and misses the point.

hotmail.com

https://www.boards.ie/discussion/comment/121217273#Comment_121217273

Members of the Dail should hear the details first in the Dail.

hotmail.com

The most right wing budget ever? Tax cuts for the higher earners are significant.

ELM327

https://www.boards.ie/discussion/comment/121217462#Comment_121217462

With the bundles of cash for those on long term DSP payments and tax cuts targeting the middle, this budget could not be described as right wing.

hotmail.com

https://www.boards.ie/discussion/comment/121217511#Comment_121217511

Small change compared to the tax cuts for the wealthy.

bren2001

https://www.boards.ie/discussion/comment/121217460#Comment_121217460

Why? It makes absolutely no difference and is far easier for the media to report if everyone knows in advance. The speech was printed a long time ago I am sure.