Cut the dole to cut higher tax rates

Purple said:
It would be nice if we could stay away from the personal attacks BS.
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Dont take it personally, its the sentiment expressed in your views that I think is ridiculous.
Im sure you are nice guy otherwise.

Purple said:
I haven't seen any meaningful suggestions from you other than minor tinkering which would have no real effect on the problem.
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Dont cut welfare for the purposes of providing tax breaks for high earners. That is my suggestion.

Purple said:
and increasing them on high earners
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This whole thread has been about reducing the tax burden on high earners, not increasing it. To suggest this now is to do a complete u-turn on previous posts.

Purple said:
Why do you think broadening the tax base and getting people to pay what they paid for decades is ridiculous?
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I dont think it is ridiculous, I think it is a good idea. I have suggested on quite a few occasions that the USC rate of 1% could be applied to all income. I also agree in principle with orkas idea about PRSI contributions. But I suspect such a scheme would raise taxes on working people, not reduce them. How that would be applied remains to be seen.

This thread has been all about either cutting taxes on high earners, with the effective rates being cited as too high. The proposal to get low paid workers and welfare recipients to make up any shortfall in the interests of 'fairness' is hogwash.

I take it that you have moved from that position?
 
TheBigShort said:
This thread has been all about either cutting taxes on high earners, with the effective rates being cited as too high. The proposal to get low paid workers and welfare recipients to make up any shortfall in the interests of 'fairness' is hogwash.
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I don't think those on low pay should pay more tax to facilitate reductions in tax by those higher earners. However, I do think the tax paid by higher earners is too high (esp at the marginal rate) whilst those on low incomes do not pay enough / any tax.

As for the USC rate of 1% you have mentioned, for someone earning 10,000 a year, this would come to be princely sum of 100 euro! It would probably cost more than this to administer so I would suggest something higher like 3 or 4 % to have any effect.
 
Firefly said:
I don't think those on low pay should pay more tax to facilitate reductions in tax by those higher earners. However, I do think the tax paid by higher earners is too high (esp at the marginal rate) whilst those on low incomes do not pay enough / any tax.
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If you cut tax on higher earners, where will you resource the shortfall?
By the statement above it would come from low-income earners. And what is that other than a transfer of tax liability from higher earners to low-income earners?

Firefly said:
As for the USC rate of 1% you have mentioned, for someone earning 10,000 a year, this would come to be princely sum of 100 euro! It would probably cost more than this to administer so I would suggest something higher like 3 or 4 % to have any effect.
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True, infact the total would reap in about 33m at 1%. If you apply a 4%rate you are talking about some €130m in total.
Basically a drop in the ocean, the net effect could be to push people further into poverty, and perhaps seek other welfare benefits or opt out of the workforce altogether.
It certainly does not offer scope to reduce taxes on high earners.
 
TheBigShort said:
True, infact the total would reap in about 33m at 1%. If you apply a 4%rate you are talking about some €130m in total.
Basically a drop in the ocean, the net effect could be to push people further into poverty, and perhaps seek other welfare benefits or opt out of the workforce altogether.
It certainly does not offer scope to reduce taxes on high earners.
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It was your idea ;):D
 
TheBigShort said:
If you cut tax on higher earners, where will you resource the shortfall?
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That question can be asked about everything (and rightly so)....e.g. 700,000 people do not currently pay income tax currently. Where do we resource the shortfall?

TheBigShort said:
By the statement above it would come from low-income earners. And what is that other than a transfer of tax liability from higher earners to low-income earners?
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I agree how it can look but I don't think one should be raised to pay for the lowering of the other as such. I think both rates should be adjusted.
 
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TheBigShort said:
Yes, and your point is?
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My point is that even if the amount recouped is low, everyone should pay something to facilitate the running of our country. Just like at home when I got a part-time job when in secondary school. I handed something to my mother every weekend even if it was only a few bob.

That's why I like the idea of a basic income and flat rate of tax. It's clean and promotes working as a life style choice and the only option to provide decent quality of life for yourself within the confines of the law.
 
Firefly said:
My point is that even if the amount recouped is low, everyone should pay something to facilitate the running of our country. Just like at home when I got a part-time job when in secondary school. I handed something to my mother every weekend even if it was only a few bob.

That's why I like the idea of a basic income and flat rate of tax. It's clean and promotes working as a life style choice and the only option to provide decent quality of life for yourself within the confines of the law.
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Im not opposed to what you are saying, im opposed to the notion that taxes can be cut on higher earners and that the shortfall can be sourced from low-income earners.
There are two elements to this discussion, 1) low-income earners dont pay tax - to which some form of taxation could be applied, I have suggested the 1% USC as a proposal.
But as illustrated, in reality a 1%USC rate applied will only net €33m, so perhaps it would do more harm than good?

2) that high earners pay too much tax. I have agreed with this also. But what im asking is, if taxes are cut from high earners, where do you source the shortfall? I have suggested that there is scope in corporation tax.
 
TheBigShort said:
Im not opposed to what you are saying, im opposed to the notion that taxes can be cut on higher earners and that the shortfall can be sourced from low-income earners.
There are two elements to this discussion, 1) low-income earners dont pay tax - to which some form of taxation could be applied, I have suggested the 1% USC as a proposal.
But as illustrated, in reality a 1%USC rate applied will only net €33m, so perhaps it would do more harm than good?
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I agree it's too low and suggested something higher like 3 or 4 %

TheBigShort said:
2) that high earners pay too much tax. I have agreed with this also. But what im asking is, if taxes are cut from high earners, where do you source the shortfall? I have suggested that there is scope in corporation tax.
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Where do we source the shortfall for anything? Looks like we are due to increase public sector salaries - where are we going to source the shortfall for this?
 
TheBigShort said:
I dont think it is ridiculous, I think it is a good idea. I have suggested on quite a few occasions that the USC rate of 1% could be applied to all income. I also agree in principle with orkas idea about PRSI contributions. But I suspect such a scheme would raise taxes on working people, not reduce them. How that would be applied remains to be seen.
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High earners are also working people. Otherwise they wouldn't be high "earners"

If you accept that the tax base is too narrow how do you suggest we broaden it? Increasing corporation tax doesn't broaden it.
 
Purple said:
....If you accept that the tax base is too narrow how do you suggest we broaden it? ....
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Thats a good question ...

A Sugar Tax won't make a massive difference, but it will help a little. However, I think the income should be strictly redirected into the health service, so whatever extra revenue is generated is actually put towards peoples health.

In much the same way, I would also make the point that all cash or assets seized by the Gardai from drug dealers etc. should be reinvested into keeping our population safe, ensuring we have sufficient prisons etc. so any funds siezed correctly by the Gardai could be spent on improving the force and related services.

I also wouldn't have an objection to placing a tax on other types of junk food ... McDonalds, Burger King etc. While I've been known to enjoy some of their produce, I'm also well aware that we need to all be encouraged to eat in a more healthy manner.

A Bike Tax (aka "licence" fee) to be paid by all cyclists annually would also be very welcome. Just like motorists, they use the roads, rely on the street markings, trafffic lights etc. so should be making some small contribution to the services they use and rely on.
 
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Firefly said:
I agree it's too low and suggested something higher like 3 or 4 %
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Which would raise all of €130m. Not an insignificant amount which would probably be useful for, i dunno... additional welfare supports for low-income earners pushed further into poverty?
If not, it could be used as a tax break for higher earners for sure. If we gave to the top 20% of earners Im guessing it would work out at about €5.60 a week each. Enough for a pint and packet of crisps I suppose? Unless you live in Dublin of course, you might have to do without the crisps.

Firefly said:
Where do we source the shortfall for anything? Looks like we are due to increase public sector salaries - where are we going to source the shortfall for this?
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Different topic in fairness. If you want to discuss wage restoration in the public service, or wage increases in general I will be more than happy to discuss them here

http://www.askaboutmoney.com/threads/is-it-time-for-wage-increases.200526/

Not only am I for wage increases in the public sector but also in the private sector. Not only will it spur demand, but it will take thousands out of low income and in effect answer the question you have just posed.
 
Purple said:
High earners are also working people. Otherwise they wouldn't be high "earners"
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Yes, I know.
But if you increase PRSI rates, they will have to pay them. So taxes would be increased on high earners? Despite your typo correction, I get the impression you would support a tax increase on higher earners?
 
Firefly said:
I think we would need to be very careful here. Since Sept 2008 and multi-nationals have basically kept the lights on in this country
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Not really. It was Irish taxpayers and the Troika that kept it all going. The multi nationals look after their own interests for sure.
But arguably if we had applied a truly free market capitalist approach then the likes of Apples apparent €150bn in Irish bank deposits would, at worst been wiped, or st best, repatriated to the US incurring a tax liability that they have avoided thus far.
Nope, it is the Irish workers and taxpayers, that have kept the lights on - for everybody.
 
TheBigShort said:
But if you increase PRSI rates, they will have to pay them. So taxes would be increased on high earners?
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Not if there's a cap. If you increase PRSI to say 6% with a 75K cap ( I think that's around what it was before), incomes up to 112,500 would pay more; and above that, PRSI payable would be lower than the current uncapped 4%.
 
Certainly having the troika was critical - the best government Ireland has ever had.

But there's around 200k MNC employees, lets say an average wage of 50k, that's around 10B in money getting pumped into Ireland each year - essentially foreign currency transfers into Ireland - new money and as such more economically important than salaries paid from money that already exists in the Irish economy.

The section escaped the worst effects of the Irish economic crash - because their companies have little to do with Ireland, a US tech crash would be more important.

Obviously the construction sector collapsed - used be 250k employees, the public sector got squeezed as their alaries were partly being paid from construction related taxes, then the service sector shrank.

It's pretty clear that without MNC employees we would be have been looking at a Greek style situation
 
MrEarl said:
A Bike Tax (aka "licence" fee) to be paid by all cyclists annually would also be very welcome. Just like motorists, they use the roads, rely on the street markings, trafffic lights etc. so should be making some small contribution to the services they use and rely on.
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We have
  • soaring car insurance costs
  • personal debt problems
  • one of the highest obesity rates in the world
  • carbon footprint targets that we're never going to meet
  • horrific traffic congestion in our cities
and you're suggesting a disincentive to cycle?

Also, most cyclists have cars and already pay motor tax.
 
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