# Property Tax - Will you pay?



## Pope John 11 (4 Nov 2011)

With the new budget cuts on the way, its now looking like the Government will be introducing a Property Tax. 

1. What are the chances of those who have already paid a life's worth of Property Tax (Stamp Duty) being made exempt from paying such an additional Tax?

2. Have you paid a life's worth of Property Tax (Stamp Duty) - Yes/No

and if so

3. Are you willing to pay this additional Property Tax if it is imposed on you?


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## T McGibney (4 Nov 2011)

1. No chance, imo
3. Taxes by definition are compulsory, not voluntary.


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## Latrade (4 Nov 2011)

I'd be happier if the media stopped mentioning Stamp Duty along with property taxes. I pay a purchase tax when I buy a car and an annual tax on using the car. This is the same, except for property. 

So in that same taken, yes stamp duty paid, but no I don't consider it a lifetime of property tax as they are different entities. 

However, I'd be even happier if when referencing reports that recommend Property Tax, the government referenced the whole report, especially the bit where it recommends changes should be tax neutral. 

But we're still at the low hanging fruit of the IMF deal, this will probably be the last bit of revenue generation through taxation and will be the last easy bit to sort out.


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## Marion (4 Nov 2011)

Willing no. Will I pay - yes!

Marion


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## Protocol (4 Nov 2011)

1. Yes, people who have paid a lot of SD should be given some sort of reduction in property tax.


2. Have you paid a life's worth of Property Tax (Stamp Duty) - Yes/No

NO, exempt, as I was an FTB.

and if so

3. Are you willing to pay this additional Property Tax if it is imposed on you?

*Yes, I am a strong supporter of property taxes.*


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## Purple (4 Nov 2011)

I've paid over €100'000 in stamp duty over the years but I see no link between this, a transaction tax, and a property tax. 
Yes, I will pay it. Property tax is a good idea. It keeps property prices low and generates steady income for the state.


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## Firefly (4 Nov 2011)

I'm happy to pay property taxes but wish that the money was spent where it was collected.


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## z107 (4 Nov 2011)

'Property tax'.

The name really is incidental.

It is a charge we will be forced to pay to people, generally billionaires, who took risks with their vast wealth. Instead of the billionaires losing their money, the Irish government has decided that we will all pay.

There is always a choice of not paying.
 - civil disobedience
 - civil unrest and riots
 - revolution
 - paradigm shift
 or
 - simple immigration.


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## becky (4 Nov 2011)

1. What are the chances of those who have already paid a life's worth of Property Tax (Stamp Duty) being made exempt from paying such an additional Tax?

*No chance.*

2. Have you paid a life's worth of Property Tax (Stamp Duty) - Yes/No

*No the plan is to buy sometime next year.*

*How do you define a life's worth?*

and if so

3. Are you willing to pay this additional Property Tax if it is imposed on you?

*I've paid any taxes / charges so far and don't see that changing.*


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## Purple (4 Nov 2011)

umop3p!sdn said:


> 'Property tax'.
> 
> The name really is incidental.
> 
> ...


Rubbish.
The people who took the risks were a cross section of people from all walks of life. They took out massive loans, bought properties as speculators, took a punt on shares, blackmailed the Irish state into giving them pay increases that were unsustainable, elected governments who eroded the tax base and engaged in pro-cyclical economic policies. 

Anyway, none of that is an argument for or against a property tax. Anything that reduces transaction taxes (particularly capital transaction taxes) and increases steady current taxes is a good thing. If we had a property tax over the last 10 years we could have used it to control property prices in the way that we used to use interest rates. Then again we would have had to get rid of the populist invertebrate who was running the country during that time and replaced his with someone who was willing to do the right thing.


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## Latrade (4 Nov 2011)

Purple said:


> Rubbish.


 
Actually umop3p!sdn is right. It's completely irrelevant that the angry 99% are all from the 5% wealthiest in the world, that has nothing to do with it, nor does €200 a year property taxation.

I can just imagine the rest of the 95% (who the 99% of the 5% actively campaign to stop corporations setting up in their countries and providing employment) would get behind our civil disobedience and unrest in full sympathy of our woes.


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## Purple (4 Nov 2011)

Latrade said:


> Actually umop3p!sdn is right. It's completely irrelevant that the angry 99% are all from the 5% wealthiest in the world, that has nothing to do with it, nor does €200 a year property taxation.
> 
> I can just imagine the rest of the 95% (who the 99% of the 5% actively campaign to stop corporations setting up in their countries and providing employment) would get behind our civil disobedience and unrest in full sympathy of our woes.




Good point!


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## z107 (4 Nov 2011)

Purple, here is who we are being forced to pay:


€700m of our money was given to these people earlier this week.
I'm not referring to someone who bought a house at the peak of the bubble and are still paying off their mortgage, or even Mr McSavvy that bought 5 houses for speculation.

This is where your 'property tax' is going.


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## Purple (4 Nov 2011)

umop3p!sdn said:


> This is where your 'property tax' is going.



No, that’s where general taxation is going. General taxation in the form of non transaction taxes is better than capital transaction taxes.


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## T McGibney (4 Nov 2011)

umop3p!sdn said:


> Purple, here is who we are being forced to pay:
> 
> 
> €700m of our money was given to these people earlier this week.



What you term as 'these people' are in the main, pension funds, yours, mine and other ordinary people's.


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## z107 (4 Nov 2011)

Purple, it's where our money is ultimately ending up. Taxes and charges are being increased and introduced and savage cut backs are taking place. All this is happening so that we can pay these bond holders. That's the ultimate goal. Of course some of the taxation is to run the country, but we've always had that.

Just think about it for a minute. We all know that that the country is 'living beyond it's means' , but how the hell do we suddenly owe hundreds of billions? where did all of all that money come from/disappear too? Did we suddenly give people on the dole free new cars, or start paying public sector people with gold bullion?

The scale just does not make sense at all.

What is very telling about this whole situation is the lack of clarity. Here we are arguing about where this money is going, when it should have been made clear. When Mr Kenny was asked who the bond holders were, this is what he said


> "I do not know the names of the bondholders," he added. "I have no intention of getting on the phone to (Anglo chairman) Mr Dukes."


source:http://www.breakingnews.ie/archives...lo-bond-repaid-amid-dail-walk-out-526776.html

Now, why did he say that? It wouldn't sound too good to start reeling off the names of various billionaires etc, now would it?


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## z107 (4 Nov 2011)

T McGibney said:


> What you term as 'these people' are in the main, pension funds, yours, mine and other ordinary people's.



Did you read the article?
That's what I thought until I read the actual article.


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## T McGibney (4 Nov 2011)

Indeed I did read the article. Plucking a few Michael Smurfit-types from the very long list of institutions doesn't alter my point that to a large extent we are talking about ordinary people's pension funds.


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## z107 (4 Nov 2011)

T McGibney said:


> Indeed I did read the article. Plucking a few Michael Smurfit-types from the very long list of institutions doesn't alter my point that to a large extent we are talking about ordinary people's pension funds.



Strange. I thought ordinary people's pension funds were being hammered.
These bonds holders are getting all their money back.


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## T McGibney (4 Nov 2011)

Not all funds are invested in equities (which have indeed got hammered). Bonds form a significant part of many pension portfolios.


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## Purple (4 Nov 2011)

umop3p!sdn said:


> Strange. I thought ordinary people's pension funds were being hammered.
> These bonds holders are getting all their money back.


The pension funds are the bond holders; the fund managers bought the bonds with pension contributions because they were "safe" investments. If we burn the bondholders we are setting fire to our pensions.


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## oldnick (4 Nov 2011)

There are pros and cons to property tax but at a time when the property market is so flat does Ireland need another disincentive to people buying a home?

 I assume that there would be allowances made for peoples incomes, age and other factors.


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## z107 (4 Nov 2011)

T McGibney said:


> Not all funds are invested in equities (which have indeed got hammered). Bonds form a significant part of many pension portfolios.



From the article:


> Of the 80 listed companies only 7 listed their business as dealing with pensions and being a cooperative savings institution. Of those, only 4 listed churches and unions as their clients, the others could well have been big pension funds.


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## T McGibney (4 Nov 2011)

oldnick said:


> There are pros and cons to property tax but at a time when the property market is so flat does Ireland need another disincentive to people buying a home?



You're correct of course. 

The NPPR (and more pointedly the probability of it being increased sharply in future years) has already discouraged plenty of people from buying up cheap properties from bust developers.  And little wonder that Nama is sinking...


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## T McGibney (4 Nov 2011)

> Of the 80 listed companies only 7 listed their business as dealing with  pensions and being a cooperative savings institution. Of those, only 4  listed churches and unions as their clients, the others could well have  been big pension funds.


But there is no evidence that such descriptions are conclusive or reliable? Its hardly credible for example that the entirety of European church and union funds, held in the form of bonds, are held with only 4 of the largest international financial institutions, or that the same applies to pension funds held with only 7 companies?


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## z107 (4 Nov 2011)

T McGibney said:


> But there is no evidence that such descriptions are conclusive or reliable?



So why aren't we being told then?
Why doesn't Enda stand up and say "The bond holders are pensioners"?

Maybe the truth, that Enda seems to be hiding, is far less palatable.

Do you have any links or evidence to suggest that the majority (or even significant portion) of the €700m that was just repaid was for pensions?


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## Purple (4 Nov 2011)

umop3p!sdn said:


> Purple, it's where our money is ultimately ending up. Taxes and charges are being increased and introduced and savage cut backs are taking place. All this is happening so that we can pay these bond holders. That's the ultimate goal. Of course some of the taxation is to run the country, but we've always had that.
> 
> Just think about it for a minute. We all know that that the country is 'living beyond it's means' , but how the hell do we suddenly owe hundreds of billions? where did all of all that money come from/disappear too? Did we suddenly give people on the dole free new cars, or start paying public sector people with gold bullion?




The total cost of the banking collapse and all of the repayments we have to make add up to a little over three years worth of our current spending deficit. The real problem is that we were and still are spending more to run the country (Health, Education, Welfare etc) than we take in in taxation. We are, in the truest possible sense, living beyond our means.


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## z107 (4 Nov 2011)

T McGibney said:


> But there is no evidence that such descriptions are conclusive or reliable? Its hardly credible for example that the entirety of European church and union funds, held in the form of bonds, are held with only 4 of the largest international financial institutions, or that the same applies to pension funds held with only 7 companies?



Where does it say that?
The article is referring only to Anglo Irish Bank bond holders.


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## T McGibney (4 Nov 2011)

umop3p!sdn said:


> Why doesn't Enda stand up and say "The bond holders are pensioners"?



Didn't the late Brian Lenihan say something like this when he was in charge?



umop3p!sdn said:


> So why aren't we being told then?
> 
> Do you have any links or evidence to suggest that the majority (or even  significant portion) of the €700m that was just repaid was for  pensions?



Its not up to me to trawl the internet for your pleasure.


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## T McGibney (4 Nov 2011)

umop3p!sdn said:


> Where does it say that?
> The article is referring only to Anglo Irish Bank bond holders.



To rephrase, I frankly don't believe that of all the major household names on the list, including Aberdeen, BNP, Barclays, Soc Gen etc, that only 4 of them hold bonds for church or union funds and that only 7 of them hold bonds for pension funds.


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## Firefly (4 Nov 2011)

Purple said:


> The total cost of the banking collapse and all of the repayments we have to make add up to a little over three years worth of our current spending deficit. The real problem is that we were and still are spending more to run the country (Health, Education, Welfare etc) than we take in in taxation. We are, in the truest possible sense, living beyond our means.



+ 18bn

The budget deficit is the white elephant in the room. However having the banking bailout carrying on for so long is a godsend for FG/Labour as they can put off the eventual slashing of government spending that is coming down the line and I've no doubt that it is coming down the line. Assuming a rate of 4% then every 25bn we borrow requires a bn to be repaid in interest alone the following year. This is on top of further borrowing and you can see that soon enough it will be unsustainable.


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## Latrade (4 Nov 2011)

T McGibney said:


> To rephrase, I frankly don't believe that of all the major household names on the list, including Aberdeen, BNP, Barclays, Soc Gen etc, that only 4 of them hold bonds for church or union funds and that only 7 of them hold bonds for pension funds.


 
It's hard to get any accurate information on this which is why speculation can be difficult. Once the scale of the Anglo disaster became known, many of the original bondholders sold off their bonds for a big haircut on the presumption that Anglo would go bust and they wouldn't get anything. It's the hedge funds and other institutes that took a gamble on buying those bonds that are going to reap the benefits. They would have bought them at 50% or even less of the price, but are now promised 100% return. 

How many of the bonds were sold on I don't know.


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## z107 (4 Nov 2011)

Purple said:


> The total cost of the banking collapse and all of the repayments we have to make add up to a little over three years worth of our current spending deficit. The real problem is that we were and still are spending more to run the country (Health, Education, Welfare etc) than we take in in taxation. We are, in the truest possible sense, living beyond our means.



Look at this article:
[broken link removed]

What do you think of that?


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## Firefly (4 Nov 2011)

umop3p!sdn said:


> Look at this article:
> [broken link removed]
> 
> What do you think of that?



No doubt...the banking bailout has snookered this country, but it's largely a one-off amount and I'm pretty certain that there will be a writedown at some stage...we simply could not repay this unless over a very very long time at 0% interest. The current budget deficit is totally our own making though and within our control. At a personal level this is akin to losing your job, buring through all your savings and still eating out 3 nights a week on your credit card...


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## RMCF (4 Nov 2011)

I paid SD only in Jan 2011, but I will pay the property tax, as there is no other alternative. 

This is unavoidable. 

I think I heard once that 60%(?) of properties in Ireland have no mortgages on them. This is a lot of people with a lot of equity built up, and the Gov will be dying to get something out of them.


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## oldnick (5 Nov 2011)

Equity does not equal cash.
It doesn't even mean that one can easily borrow cash to pay property taxes.


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## orka (5 Nov 2011)

oldnick said:


> Equity does not equal cash.
> It doesn't even mean that one can easily borrow cash to pay property taxes.


I think I read that the plan is that the property tax can be accrued if the property-owner has insufficient cash to pay it and then when the house is sold/inherited, the tax becomes due then.  I think that is fairer than making some people exempt because they are cash-poor.


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## DerKaiser (5 Nov 2011)

Yeah I'll pay. Last time I checked we are a democracy and I don't think I'd be hanging around if I didn't respect the right of the democratically elected government to levy taxes.

As for the unrelated argument being made here, last time I checked we're racking up debt rather than paying it off.  I will certainly not feel hard done by as long as the country is running a current budget deficit (even excluding debt interest).  

I might start complaining when we need to run very large current budget surpluses to pay off banking debts, but we're nowhere near that situation.  Anyone who thinks a €200 property tax represents paying off billionaires rather than a minor effort at living within our means is deluded.


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## z107 (6 Nov 2011)

I'm curious at to what money is actually being used to pay this €700m, and the bank bailouts? Where is this money coming from?

According to a few posts on this thread, it's not tax payers' money being used, so where are we getting it?


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## T McGibney (7 Nov 2011)

orka said:


> I think I read that the plan is that the property tax can be accrued if the property-owner has insufficient cash to pay it and then when the house is sold/inherited, the tax becomes due then.  I think that is fairer than making some people exempt because they are cash-poor.



If it accrues at the same rate as the NPPR (10% simple interest per month) some people will end up losing all the equity in their homes within a decade. This could amount to effective confiscation by the State of vulnerable people's property.


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## DerKaiser (7 Nov 2011)

umop3p!sdn said:


> I'm curious at to what money is actually being used to pay this €700m, and the bank bailouts? Where is this money coming from?
> 
> According to a few posts on this thread, it's not tax payers' money being used, so where are we getting it?


 
I'm glad you asked.

The one place its not coming from the current generation of taxpayers. As I've pointed out, we're not even generating enough tax revenues to fund the day to day running of the state - health, education, social welfare, etc.

So the €700m will come from one of two places:

1) Future taxpayers. This very well could be us, but we have not yet cut spending or raised taxes to anywhere near levels that could be described as us paying off the banking debts.

2) There is a large chance that, like Greece, we will default. We might have €200bn national debt by the time we balance the books. If the money markets don't trust us to repay that sum of money there will be a default. If we default to the tune of 25% we will effectively not have not paid for the banking crisis. If, like Greece, we default to the tune of 50%, not only will we have avoided paying for the banking crisis, we will also have not paid for €50bn of our own day to day spending!


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## orka (7 Nov 2011)

> I think I read that the plan is that the property tax can be accrued if the property-owner has insufficient cash to pay it and then when the house is sold/inherited, the tax becomes due then.





T McGibney said:


> If it accrues at the same rate as the NPPR (10% simple interest per month) some people will end up losing all the equity in their homes within a decade. This could amount to effective confiscation by the State of vulnerable people's property.


With the NPPR there isn't an option to NOT pay and let the charges accrue (well, not an official, reasonable-option one...) - the money has to be paid fairly soon after it's due or penalty interest starts to roll up.  My understanding with the property tax is that the accrual option (if such a thing comes to pass) would be there to help cash-poor people so I expect any interest would be a modest annual amount (CPI inflation maybe?).


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## T McGibney (7 Nov 2011)

orka said:


> With the NPPR there isn't an option to NOT pay and let the charges accrue (well, not an official, reasonable-option one...) - the money has to be paid fairly soon after it's due or penalty interest starts to roll up.  My understanding with the property tax is that the accrual option (if such a thing comes to pass) would be there to help cash-poor people so I expect any interest would be a modest annual amount (CPI inflation maybe?).



Fair enough in a way, but there are plenty of cash-poor people being caught by the NPPR and its late payment provisions, and this vicious treatment bodes ill for how the property tax will operate in similar cases.


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## Shawady (7 Nov 2011)

Firefly said:


> The current budget deficit is totally our own making though and within our control.


 
True, but whenever the government introduces a measure to rectify the situation it is met with the usual protests. Everyone agrees we are living beyond our means but most don't want any measures to affect them.


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## werner (7 Nov 2011)

umop3p!sdn said:


> Purple, here is who we are being forced to pay:
> 
> 
> €700m of our money was given to these people earlier this week.
> ...


 
Well said! 

To make matters worse many people voted for FG believing that Min Noonan and friends would actually toast the unsecured Bond holders a little. Instead FG/Labour are behaving as members of the FF/green continuity party

This is a quote from Noonan last year, I will never trust or believe anything FG says again

*"What legal or moral compulsion is on Ireland, however, to honour in full debt incurred by Irish banks when there was no State involvement in the arrangements? These loans were entered into freely by willing lenders and borrowers with absolutely no State participation. … It is obscene that liability for these loans is now being transferred to the Irish taxpayer, in many respects to the poorest of the Irish taxpayers. *


*In the budget the Minister for Finance reduced social welfare payments, punished the blind, disabled, widows, carers and the unemployed and he taxed the poorest at work, and for what? It was so that the taxpayer can take on liability for debts the country never incurred and arose from private arrangements between private institutions. What a disaster and an obscenity.*

*The latest available bank data shows that Irish guaranteed bank debt has been sold on at a discount to hedge funds in the USA, the UK and Luxembourg, as well as to smaller speculative investors… The position has now become indefensible that the Irish taxpayer, even the poorest taxpayers, should be required to underpin the speculation of hedge fund investors. There must be transparent, open, negotiated burden sharing of bank debt."*

I do agree with Min Noonan, as he states, it is a "disaster and an obscenity" to squander Irisih taxpayers money in this way

FG / Lanour Property tax. some chance!


​


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## Purple (7 Nov 2011)

There is no link between a property tax and paying bond holders.
Der kaiser's excellent post above explains that.


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## z107 (8 Nov 2011)

Purple said:


> There is no link between a property tax and paying bond holders.
> Der kaiser's excellent post above explains that.


If you and Der kaiser want to convince yourselves that some how you are not going to pay for the bank bailouts and the €700m, that's fine. I won't try to argue with that.

I know that this money is only coming from one place - Irish taxpayers, present and future. For me, this makes most sense.

You can call the new taxes whatever you like, property tax, poll tax, community charge, USC, but it's all going into the one pot.


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## Purple (8 Nov 2011)

umop3p!sdn said:


> If you and Der kaiser want to convince yourselves that some how you are not going to pay for the bank bailouts and the €700m, that's fine. I won't try to argue with that.
> 
> I know that this money is only coming from one place - Irish taxpayers, present and future. For me, this makes most sense.
> 
> You can call the new taxes whatever you like, property tax, poll tax, community charge, USC, but it's all going into the one pot.



OK, even if it's all going into one pot only a quarter of it will ever be spent on banking debt.


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## DerKaiser (8 Nov 2011)

umop3p!sdn said:


> If you and Der kaiser want to convince yourselves that some how you are not going to pay for the bank bailouts and the €700m, that's fine. I won't try to argue with that.
> 
> I know that this money is only coming from one place - Irish taxpayers, present and future. For me, this makes most sense.
> 
> You can call the new taxes whatever you like, property tax, poll tax, community charge, USC, but it's all going into the one pot.


 
I'm not arguing anything other than currently we do not pay enough taxes to cover our day to day spending.

We should have no problem with spending cuts and tax increases up to a point where we are balancing the current budget and paying down government debt built up through running current budget deficits in the past.

I'm not in favour of the taxpayer footing the €50bn banking debt in full. This is wrong.

But we do need to increase taxes and cut spending to cover day to day spending and to pay off any past shortfalls in covering day to day spending. *With €11bn+ p.a. in current budget deficit and over €100bn racked up from previous deficits we really do not have a leg to stand on in terms of opposing a taxation measure that generates €0.2bn p.a.* 

The other reason I'm relatively laid back about the banking debt being added to the national debt is:

1) That is EU policy and we really have no choice other than to toe the line on this for now

2) I believe, like Greece, we will need to default on a portion of debt in the future. My best estimate is that this will effectively mean that we will never end up paying the banking debts


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## oldnick (8 Nov 2011)

I'm not sure all economists would agree with Kaiser.
Many would argue that continually burdening a society with taxes may have the opposite effect than the one intended.

For example, higher taxes can lead to 
--less spending which means factories, shops etc closing = more people on the dole.
--less endeavours/more emigration of our most productive people especially the ones society spends a fotune educating.
--ever increasing black-market/nixing activities resulting in even less money to the exchequer.
--increasing discincentives to save, invest, build or other activities that would appear to result in continually added taxes. 

Increasingly, it is being realised that ever harsher austerity measdures do NOT result in an economy that is able to pay off it's debts..so to quote Kaiser people *do* have a leg to stand on opposing this taxation.

(This is, of course, besides the argument that one should not ,really, be paying these damn debts in the first place)


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## Time (8 Nov 2011)

I don't pay any Irish taxes so won't be paying this one either.


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## T McGibney (8 Nov 2011)

oldnick said:


> For example, higher taxes can lead to
> --less spending which means factories, shops etc closing = more people on the dole.
> --less endeavours/more emigration of our most productive people especially the ones society spends a fotune educating.
> --ever increasing black-market/nixing activities resulting in even less money to the exchequer.
> --increasing discincentives to save, invest, build or other activities that would appear to result in continually added taxes.


This isn't just theory. All these phenomena are already happening in our economy, with serious consequences all round.


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## DerKaiser (8 Nov 2011)

oldnick said:


> Increasingly, it is being realised that ever harsher austerity measdures do NOT result in an economy that is able to pay off it's debts..so to quote Kaiser people *do* have a leg to stand on opposing this taxation.
> 
> (This is, of course, besides the argument that one should not ,really, be paying these damn debts in the first place)



i'd be sympathetic to the argument that excessive cuts & tax hikes will not get us out of this mess.

what I'm not sympathetic to is people accepting no responsibility for ever repaying the current budget deficits we've racked up


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## z107 (8 Nov 2011)

DerKaiser said:


> i'd be sympathetic to the argument that excessive cuts & tax hikes will not get us out of this mess.
> 
> what I'm not sympathetic to is people accepting no responsibility for ever repaying the current budget deficits we've racked up



I accept full responsibility for my mortgage, credit card, car loan (when I had one) and any other debts that I have willingly signed up for.

I don't see why I should also accept the debts of those that invested in bonds or hedge funds or whatever else that the government has unilaterally deemed that we must pay back.


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## DerKaiser (8 Nov 2011)

umop3p!sdn said:


> I don't see why I should also accept the debts of those that invested in bonds or hedge funds or whatever else that the government has unilaterally deemed that we must pay back.



I don't think you should accept them, but they're not part of the large current budget deficits I believe we should be taking responsibility for.


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## DB74 (9 Nov 2011)

T McGibney said:


> This isn't just theory. All these phenomena are already happening in our economy, with serious consequences all round.



Totally agree


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## DerKaiser (9 Nov 2011)

oldnick said:


> For example, higher taxes can lead to
> --less spending which means factories, shops etc closing = more people on the dole.
> --less endeavours/more emigration of our most productive people especially the ones society spends a fotune educating.
> --ever increasing black-market/nixing activities resulting in even less money to the exchequer.
> --increasing discincentives to save, invest, build or other activities that would appear to result in continually added taxes.


 
Just one other point on this. I think we are reaching a saturation point on incomes taxes in terms of disincentivising effort (and all the points you mention above), which is why a property tax is a lesser evil than an increased level of income taxes.


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## Mpsox (9 Nov 2011)

umop3p!sdn said:


> I don't see why I should also accept the debts of those that invested in bonds or hedge funds or whatever else that the government has unilaterally deemed that we must pay back.


 
And yet you are quite happy to accept that as a result of paying back those bonds that your deposits in your bank are secured and guaranteed. You have also historically been happy to accept and use the services and infrastructure that the state borrowed money to pay for.


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## z107 (9 Nov 2011)

Mpsox said:


> And yet you are quite happy to accept that as a result of paying back those bonds that your deposits in your bank are secured and guaranteed. You have also historically been happy to accept and use the services and infrastructure that the state borrowed money to pay for.



I would have preferred if the banks had collapsed. Yes, I would have lost money, but that's capitalism (or at least it should be).
If the banks had collapsed, there would be new, better banks that would have filled the gap. Look at what we got instead.

As for the infrastructure argument, well I'm certainly paying for this, so why shouldn't I use it? It's my money that paid for it. There is no such thing as 'state funds'.


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## Mpsox (10 Nov 2011)

umop3p!sdn said:


> I would have preferred if the banks had collapsed. Yes, I would have lost money, but that's capitalism (or at least it should be).
> If the banks had collapsed, there would be new, better banks that would have filled the gap. Look at what we got instead.
> 
> As for the infrastructure argument, well I'm certainly paying for this, so why shouldn't I use it? It's my money that paid for it. There is no such thing as 'state funds'.


 
So if it's state funds why are you giving out about paying it back?. As for your comment on the banks, I'm sure you'd have been absolutely delighted to have seen them gone bust and your saving wiped out and that you'd never be on a bulletin board giving out about that.  How do you know there would be new banks and not the old banks rehashed?


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## T McGibney (10 Nov 2011)

DerKaiser said:


> Just one other point on this. I think we are reaching a saturation point on incomes taxes in terms of disincentivising effort (and all the points you mention above), which is why a property tax is a lesser evil than an increased level of income taxes.


If the poor, unemployed and low income earners are exempt from a property tax (which I understand will probably be the case), then the so-called property tax is merely another income tax, with all the same (albeit indirect) disincentive implications.


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## DerKaiser (10 Nov 2011)

T McGibney said:


> If the poor, unemployed and low income earners are exempt from a property tax (which I understand will probably be the case), then the so-called property tax is merely another income tax, with all the same (albeit indirect) disincentive implications.


 
You are correct in that it adds to the poverty trap, creating further disincentives to work at lower incomes.

It's not a disincentive to whether someone decides to bust their ass doing overtime or hoping for a promotion though. Higher rates and lower bands disincentivise that, but a fixed property tax wouldn't.


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## T McGibney (10 Nov 2011)

DerKaiser said:


> It's not a disincentive to whether someone decides to bust their ass doing overtime or hoping for a promotion though. Higher rates and lower bands disincentivise that, but a fixed property tax wouldn't.



Indeed, but that's hardly at issue though? 

It is clear that a property  tax will have a disincentive effect, only that the disincentive will be  a further poverty trap for low earners rather than a further bonus/promotion/overtime trap for comparitively higher earners.

One could argue about the relative merits of both approaches, but I suspect that the additional poverty trap will be more harmful, in a variety of respects, than the alternative. 

It would be far more efficient and less costly to forget about the property tax and simply reduce personal tax credits accordingly.  But instead of this clear logic we are fed balderdash about how a property tax will somehow magically 'widen the tax base' when the same limited range of people end up paying it AND income tax.


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## DerKaiser (10 Nov 2011)

T McGibney said:


> It would be far more efficient and less costly to forget about the property tax and simply reduce personal tax credits accordingly. But instead of this clear logic we are fed balderdash about how a property tax will somehow magically 'widen the tax base' when the same limited range of people end up paying it AND income tax.


 
I'd agree with that.  I don't think they are reducing the tax credits this time, but it would be a far more efficient way to achieve something similar.

One point I wouldn't agree on is that the bonus/overtime/promotion trap isn't as important as the poverty trap.  The 52% tax rate kicks in around €32k/€33k. If the band goes much lower or the rate much higher we will have a serious problem competing internationally with a disincentivised workforce.


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## ontour (10 Nov 2011)

Assuming that it is inevitable, the property tax should be applied to all properties.  If the owner has an inability to pay the tax, it should be accrued with interest until the owner can afford to pay the tax or until the property is sold.  The tax should be paid from the proceeds in preference to other charges against the property.


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## T McGibney (10 Nov 2011)

ontour said:


> Assuming that it is inevitable, the property tax should be applied to all properties.  If the owner has an inability to pay the tax, it should be accrued with interest until the owner can afford to pay the tax or until the property is sold.  The tax should be paid from the proceeds in preference to other charges against the property.



In other words, the State will eventually own the properties of the poor? This would be an utter scandal.


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## ontour (10 Nov 2011)

T McGibney said:


> In other words, the State will eventually own the properties of the poor? This would be an utter scandal.



So theoretically in 50 or 150 years the state may accrue taxes and interest that equal the value of the property.  Is that a good enough reason not to apply a property tax to all properties?


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## T McGibney (11 Nov 2011)

If they charge the same rate of 'interest' on late paid property tax as they do on late paid NPPR tax (10% per month) it won't take 50 years  And it won't be theoretical either


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## Firefly (11 Nov 2011)

We seem to be obsessed with raising taxes in this country at the moment. Increasing taxes, as has been pointed out, will disincentivise productivity and make it more attractive to go on / stay on the dole. *We should IMO be cutting taxes and slashing government spending at the same time*. Make it necessary (by cutting the dole) and attractive (cutting income tax) for all those who are able to work to do so. Make it much more affordable for employers to hire by cutting employees PRSI and slashing commercial rates. 

By introducing / raising taxes, the government has less incentive to cut its cost. The result is even more money being transfered from the private sector. I've said it before...there will come a point where even those with jobs will start to emigrate simply because it won't be worth staying. There will be others who will go on / stay on the dole. Who will fund our budget deficit then?


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## oldnick (11 Nov 2011)

Is this a fair summary of what's been said so far...?

There seems to be general agreement  that increasing taxes may -like many austerity measures - actually impede the growth neccessary to pay off our debts  and service our economy. 

However, depending on how it's applied, property tax may be less incentivising than income and other  tax increases.
 If there was a means of postponing payment until the sale of the property/death of the owner and the penalty for delaying payment was based on  an equitable interest rate then  many people may prefer this tax to extra income tax. 

However, although a fair system of delaying payments until sale or death may  procure good income in the distant future it wouldn't get the revenue which is neccessary now. 
Regrettably, the govnt want the money now so I doubt if a sytem of postponments with a fair penalty would be allowed.


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## ontour (11 Nov 2011)

T McGibney said:


> If they charge the same rate of 'interest' on late paid property tax as they do on late paid NPPR tax (10% per month) it won't take 50 years  And it won't be theoretical either



The alternative is a system of exceptions is very expensive to manage.  Loopholes will be found where parents may put the house in the name of the children because they have no income or 1,000 other manipulations of a complex set of rules.

If it is a property tax then it is based on the property.  If it is a tax based on equity in property, then it is a wealth tax and if it is based on the earnings of the owners then it is an income tax.


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## shnaek (11 Nov 2011)

Firefly said:


> We seem to be obsessed with raising taxes in this country at the moment. Increasing taxes, as has been pointed out, will disincentivise productivity and make it more attractive to go on / stay on the dole. *We should IMO be cutting taxes and slashing government spending at the same time*. Make it necessary (by cutting the dole) and attractive (cutting income tax) for all those who are able to work to do so. Make it much more affordable for employers to hire by cutting employees PRSI and slashing commercial rates.


+1



Firefly said:


> there will come a point where even those with jobs will start to emigrate simply because it won't be worth staying.


That is already happening. I thought about starting a thread here to find out if there is a level of tax above which people would not be willing to pay. A level of tax in other words, at which point people would emigrate. 

I have friends who contract abroad, who always said they'd return home, and thus paid their taxes here by choice. This year, all of them with no exception, decided to stop paying tax here. And most of them are now saying they will never return here. These are all high earners (80k +), highly skilled and highly motivated people. The more of these we lose, the more we will continue to lose. And now we are going to tax people simply for living in the country.


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## ontour (11 Nov 2011)

oldnick said:


> Regrettably, the govnt want the money now so I doubt if a sytem of postponments with a fair penalty would be allowed.



If the tax is based on property and not income, it should not act as a disincentive to work so arguably better than an income tax increase.

The state need the money now.  If the interest rate is set correctly, people are encouraged to pay now if they can afford to do so.  This will reduce the number of people who do not pay because they disagree with other people being exempt.  Everyone pays eventually, if you have the cash it makes sense to pay now.  The inevitable backlash is dampened as no one will be able to avoid the tax.

There is no pleasant solution to raising taxes.  Major restructuring of the public sector would help our economy but that is not going to happen for political reasons.  Also it would potentially have a devastating impact on many public sector workers.  I did find it quite interesting on Prime Time last night that Ruairi Quinn was trying to wriggle out of his agreement with the students and one of the constraints that he was committed to the Croke Park agreement.  Civil servant trumps student by the looks of it !


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## Firefly (11 Nov 2011)

ontour said:


> If the tax is based on property and not income, it should not act as a disincentive to work so arguably better than an income tax increase.



It will if those who are not working don't have to pay it. It will also make home ownership less attractive which is another debate altogether. 

Slashing government spending would obviously adversely affect public sector workers, but by also cutting taxes it would stimulate employment. More people working in the private sector (raising taxes) rather than more people working in the public sector (spending taxes).


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## Purple (11 Nov 2011)

Firefly said:


> It will if those who are not working don't have to pay it. It will also make home ownership less attractive which is another debate altogether.


 True, but I don't see that as a bad thing.



Firefly said:


> Slashing government spending would obviously adversely affect public sector workers, but by also cutting taxes it would stimulate employment. More people working in the private sector (raising taxes) rather than more people working in the public sector (spending taxes).


 No easy solutions here.


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## ontour (11 Nov 2011)

Firefly said:


> cutting taxes it would stimulate employment



I not sure I buy this.  I am sure there is a tipping point at which employment is disincentivised by taxation but is there any evidence that we are hitting that?  There are jobs available in Ireland but they do not match the skills of those who are unemployed.  There are lots of technically minded people who worked in the construction sector who could be software engineers but choose not to change sector.  Even if we managed to redeploy skills efficiently, there are lots more people who need jobs.  I do not believe that most tax cuts would create a significant increase in employers needs.

Remove the concept of being unemployed entirely - either you work in a regular job or if you are unable to work in a regular job, you work for the state in return for a sustenance income.

Goes beyond property tax discussion though !


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## shnaek (11 Nov 2011)

ontour said:


> I am sure there is a tipping point at which employment is disincentivised by taxation but is there any evidence that we are hitting that?  There are jobs available in Ireland but they do not match the skills of those who are unemployed.



The evidence is that even though there are jobs available as you say, we can't even attract other Europeans over here to take up those jobs. And the skilled Irish that can do those jobs are emigrating to places with more favourable conditions, including more attractive rates of taxation.


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