# FG and Labour's approach to the taxes



## Firefly (3 Jul 2014)

I'm a bit confused 

Correct me if I am wrong, but the generally preferred option of those on the Left is to see higher taxes to pay for public services. Those on the Right call for less taxes (resulting in reduced public services). We can broadly agree that Labour represent the Left and FG represent the centre/centre-right.

Why then are FG pushing through with taxes and Labour are opposing them?

As an example in today's Indo:

Mr Gilmore has expressed his deep concern about a Fine Gael-led plan which would see homeowners in 11 counties and cities being robbed of local property tax bills.
http://www.independent.ie/irish-new...-fly-over-fg-property-tax-plans-30404314.html

It was the same with the water charges.

I would have thought Labour would be pushing for the LPT and FG trying to fight it, not the other way around

Firefly.


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## Purple (3 Jul 2014)

Labour want increases in income tax because “The Rich don’t Pay their Fair Share” and not indirect taxes because “They disproportionately impact on TMVS’s*”

(*The Most Vulnerable in Society; a group constituting about 70% of the population.)

FG, and anyone with anything approaching a rational or logical view on taxes or a rudimentary grasp of reality, want to broaden the tax base.


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## Seagull (3 Jul 2014)

To adopt a very simplistic view - labour want the wealthy to pay more tax. They are in general opposed to blanket taxes that impact everyone. FG take the approach that everyone should pay for what they use.


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## dereko1969 (3 Jul 2014)

The fact is that the LPT was supposed to go to Local Authorities, the fact that the amount collected would provide scope for LA's in Dublin (mostly) to reduce the LPT by up to 15% is being taken away from them by FG plans to reduce funding to those LAs so taking away the possibility of reducing the LPT.

The local authorities in places like Longford and Leitrim will be subvented by the property tax take in Dublin because those counties don't have enough people living there to pay for their council's activities.


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## Sunny (3 Jul 2014)

Labour are right to kick off about this. When this tax was brought in, the Government had a choice to make the tax based on site size as most economists wanted or by house value. In all their wisdom, they decided to go down the house value route which led to people in Urban Areas having to pay more simply because of the location of the house. The Government then started spinning that 80% of the LPT proceeds would be kept in the local area that they are raised with the surplus going to poorer councils. They also stated that councils would have the ability to cut LPT rates if they raised enough money to pay for services and had a surplus. 

Now we have a Government saying well we are going cut central funding to Councils that have raised the most money so the ability to cut the tax is gone. How is that fair? I pay more tax for a 2 bed apartment in Dublin than my Sister in Law does for her 5 bedroom house on a huge plot of land in Tipperary? She then moans about how she doesn't get half the services I get but she chose to live in a rural setting because she didn't like the urban life? Why should I subsidise her? Let Tipperary Council increase her tax if they want more money. This isn't about an urban/rural divide. Everyone accepts that urban centres have to subsidise rural areas. This is just about a Government that seems to making things up as they go along....

Having said that, this is just Gilmore acting the maggot before he goes!


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## Gerry Canning (3 Jul 2014)

Purple said:


> Labour want increases in income tax because “The Rich don’t Pay their Fair Share” and not indirect taxes because “They disproportionately impact on TMVS’s*”
> 
> (*The Most Vulnerable in Society; a group constituting about 70% of the population.)
> 
> FG, and anyone with anything approaching a rational or logical view on taxes or a rudimentary grasp of reality, want to broaden the tax base.


 ................................
Nope . 
FG want to protect their voter base.
I would think {broaden the tax base} would by defination hit the Rich.
In particular those with inherited ,not self earned wealth.
I think it would be equitable to engineer a Tax policy that leans towards hitting non productive wealth.
 I am NOT an economist but 
eg . If you hold a valuable site for ages , hit you with eg 5 % tax year 1, 6 tax year % year 2 etc.
It would incentivise the wealth havers to use their assets productively.
eg.I heard suggested that Rates on homes should be tapered to increase as your mortgage decreases, seems fair to me.


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## 44brendan (3 Jul 2014)

> eg.I heard suggested that Rates on homes should be tapered to increase as your mortgage decreases, seems fair to me.


 
Have you thought this one through Gerry?? A reasonable person might point out that if Citizen A lives in a €300K house with no mortgage and Citizen B lives in a 300K house with a 350K mortgage A should pay the higher tax as he/she has ownership rights in a property, while B has zero ownership in value terms.
If you now put in a codicil as per your post, A's tax will remain unchanged, while B's tax will increase as he reduces his mortgage! I think I might find some difficulty in seing this as being fair if I was A


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## Gerry Canning (3 Jul 2014)

44brendan said:


> Have you thought this one through Gerry?? A reasonable person might point out that if Citizen A lives in a €300K house with no mortgage and Citizen B lives in a 300K house with a 350K mortgage A should pay the higher tax as he/she has ownership rights in a property, while B has zero ownership in value terms.
> If you now put in a codicil as per your post, A's tax will remain unchanged, while B's tax will increase as he reduces his mortgage! I think I might find some difficulty in seing this as being fair if I was A


 ..........

Get a feeling that is why I failed @ sums! 
I was using a rough example , I am sure it could be graduated to be fair also to Mr A.
The point I suggest is; an equitable way can be worked out to tax latent wealth subject to fairness, without being labelled a rampant Red!.


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## elcato (3 Jul 2014)

> I heard suggested that Rates on homes should be tapered to increase as your mortgage decreases, seems fair to me.


Not in agrrement with it but I suppose you could give a tax rebate based on the interest paid on your mortgage, something similar to a landlord's 75% of loan interest can be written against tax due ? Obviously not the same figures as that.


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## Firefly (3 Jul 2014)

Seagull said:


> To adopt a very simplistic view -_ labour want the wealthy to pay more tax_.



That's why I'm confused. Generally the wealthier you are the more expensive the house you live in (and property you own). You will therefore pay a higher amount of LPT. Those in social housing are exempt. Those in very cheap housing are exempt. Those in the middle pay the average rates. Isn't that what the Left always look for?

And this is not a dig at Labour. FG (representing the rich) are pushing for this even though the rich will pay more in tax...

All seems are bit upside-down..


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## 44brendan (3 Jul 2014)

Last reply was a little "tongue in cheek". Proposal would work fine if tax was on the net value of the property. However this would considerably reduce property tax take in general. 
Unfortunately tax by its very nature is not wholly designed to be fair! Probably the fairest tax system is based on a sales and wealth system. However, the difficulty is that while a left oriented party focus on a "Tax the Wealthy" policy they have no concept of how this would work out in practise. For us the wealthy are those who earn more than us, but realistically there are not enough wealthy people to finance the rest of us. The current system is largely equitable as the Pareto rule generally applies (20% of the population pay 80% of the tax). Using the Sin Fein/Democratic Left proposal would result in a much higher burden on the 20%, which perhaps they could carry, but realistically a Socialist system can result and generally does in a system breakdown. If you overburden the mythical "wealthy" they will sonn see the unfiarness of this system and either exit it (those who can) or avoid/evade paying tax. When we were students we were all Socialists. However when earnings start to rise we soon become Capitalists. There is an acceptable compromise between these extremes and I would see the current system (while not being perfect) as being equitable and geared to maintain the status quo.


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## Gerry Canning (3 Jul 2014)

I think it was Churchill who was quoted as saying , we all start as socialists and mature into capitalists.
I am old enough to remember the late 70,s when tax hit 67% on moderate incomes.That was madness.
There is always a feeling that our (apparently) well off neighbour is better off than us. We forget that the new car is on finance!
We saw in the (fluffy) times too much Capitalist croneyism and I would worry that that type of fraud still exists.
If we treated white-collar type crime with vigour , I genuinely believe the populace would buy into most taxes.
I l believe we still permit too many cosy and self ruling cartels.


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## Firefly (3 Jul 2014)

Rather than being a thread about Capitalists vs Socialists, or whether the LPT is even equitable, can anyone tell me why Labour are against this and the water charges, and FG are promoting them? FG have even come out recently saying that there won't be any let up in the budget. Surely all of these measures are going to hit FG voters in the pocket more, whilst, conversely, these extra taxes should play into the hands of Labour voters' principles?


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## Sunny (3 Jul 2014)

Firefly said:


> Rather than being a thread about Capitalists vs Socialists, or whether the LPT is even equitable, can anyone tell me why Labour are against this and the water charges, and FG are promoting them? FG have even come out recently saying that there won't be any let up in the budget. Surely all of these measures are going to hit FG voters in the pocket more, whilst, conversely, these extra taxes should play into the hands of Labour voters' principles?


 
Labour aren't against the property tax. Well, I am sure they aren't happy about it but I dout FG are either. They are against what the Government are suggesting about manipulating funding to local authorities. Labour who are predominately a Dublin based party are against Dublin not having the same option to reduce LPT like the rest of the Country or having funding taken away from them.


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## DerKaiser (3 Jul 2014)

Sunny said:


> Labour who are predominately a Dublin based party are against Dublin not having the same option to reduce LPT like the rest of the Country or having funding taken away from them.


 
Spot on.

As someone living in Dun Laoghaire Rathdown I was very much looking forward to the benefits I was going to receive from the property tax I was paying. 

It appears now that the reduction in funding is specifically designed to ensure that all the money collected from the LPT effectively flows into a central pot.

Obviously we all saw it coming, but it's pretty cynical and FG are unashamedly unapologetic!


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## monagt (3 Jul 2014)

> It appears now that the reduction in funding is specifically designed to ensure that all the money collected from the LPT effectively flows into a central pot.



Everyone is missing the point...........Fine Gael is an rural party at its core which is going to look after its base at the expense of Dublin, Meath, Kildare, Louth, Wicklow, etc., who have the highest property taxes

A non existent Labour Party and a ruined FF make this even easier.


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## Purple (16 Jul 2014)

Gerry Canning said:


> ................................
> Nope .
> FG want to protect their voter base.
> I would think {broaden the tax base} would by defination hit the Rich.
> ...



“The Rich” , or too be precise the very rich; people with millions, constitute a very small group. What people mean when they talk about the rich is those earning high incomes; over a hundred thousand, up to a few hundred thousand a year. These people probably have big mortgages and outgoings and while they have more money than most aren’t exactly lighting cigars with €50 notes. Most of them rely on their earned income and so the marginal rate of income tax is what matters to them. In that context property tax, water charges etc aren’t a big issue because they know that if the government weren’t collecting money that way they would do what they usually do; tax high earners even more.


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