# Paying for everything with other people's money



## gnf_ireland (4 Oct 2017)

Over the last few weeks, the usual budget discussions have occured were everyone wants increased spending using other peoples money. Maybe its time to decide what type of services we want, and how we fund them.

I am aware that the Social Democrats as part of the last election stated that they support increased taxation for better services. From what I can see all other parties in the centre support reduced taxation while calling for better services. The left aligned parties want to tax the higher income earners more (with no property tax) for better services.

I am wondering if a poll was run for say 10,000 people, across all areas of society, and suggested the following wording how many would say yes:

_"I support the removal of the personal tax credit of 1,650 euro per person to fund increased spending on public services"_

Based on some numbers floating around here, would increase the spending purse by 5.5bn a year. It would hit anyone with an income, so should hit the majority of people in some manner.

Thoughts - would people be willing to spend their money on improving services, or just other peoples?


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## Delboy (4 Oct 2017)

If I thought it would lead to better services, I would seriously consider it.
But it wouldn't so I say no


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## gnf_ireland (4 Oct 2017)

And to nail my colours to the mast, I would support this on the condition that the services were provided on a universal basis so all people would be able to avail of them. The only restriction I would propose would be to have some linked to a minimum number of PRSI stamps.

I would not support this if the additional services provided would be means-tested, as this is just another tax on middle to higher earners


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## gnf_ireland (4 Oct 2017)

Delboy said:


> If I thought it would lead to better services, I would seriously consider it.
> But it wouldn't so I say no


Yes this is the great unknown. Let's say for the moment it would result in better services...
But agree, whether it would or would not is impossible to call


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## galway_blow_in (4 Oct 2017)

gnf_ireland said:


> Over the last few weeks, the usual budget discussions have occured were everyone wants increased spending using other peoples money. Maybe its time to decide what type of services we want, and how we fund them.
> 
> I am aware that the Social Democrats as part of the last election stated that they support increased taxation for better services. From what I can see all other parties in the centre support reduced taxation while calling for better services. The left aligned parties want to tax the higher income earners more (with no property tax) for better services.
> 
> ...



absolutely not , increased public spending has only ever meant more money for staff in the public sector , every single party vigorously courts the public sector , they are the second most powerful bloc after pensioners , calls for increased spending are code for give us more money


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## gnf_ireland (4 Oct 2017)

galway_blow_in said:


> absolutely not , increased public spending has only ever meant more money for staff in the public sector


always a fear of history repeating itself !


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## SMAEL17 (4 Oct 2017)

Delboy said:


> If I thought it would lead to better services, I would seriously consider it.
> But it wouldn't so I say no



Same for me - But there would be a mile-long queue of Trade Unions looking for pay increases. So we'd see more expensive current level of services rather than expanded services.

I hate the phrase Pay Restoration - Restoration to a proven unsustainable level should not be a target.

Of course trade unions have to continually justify themselves and they have become self-sustaining - There's just no need for them anymore. There is enough protection for employees from Irish and European Laws. Trade Unions and Week Government were as much to blame for our Recession as the Banks.


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## TheBigShort (5 Oct 2017)

gnf_ireland said:


> I support the removal of the personal tax credit of 1,650 euro per person to fund increased spending on public services"



I would be opposed to this. All it would do is push those on the lowest incomes further into poverty. In turn, any taxes raised would simply be used to fund additional social supports. 
Imagine the outcry on AAM when the welfare bill is shown to have gone up!



gnf_ireland said:


> Based on some numbers floating around here, would increase the spending purse by 5.5bn a year. It would hit anyone with an income, so should hit the majority of people in some manner.



I'm not sure where €5.5bn came from. If you take the €1650 tax credit away all you will be doing is taxing everyone 20% on that amount - €330 per working person. Under €700m raised on taxes.
Aside from increasing the welfare bill, you will have increased taxes on everyone. 
AAM site would probably crash with the horror of it all.


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## michaelm (5 Oct 2017)

gnf_ireland said:


> would people be willing to spend their money on improving services, or just other peoples?


I'd happily pay more tax if it was used to fix the criminal justice system . . a restructured police force with 20,000+ police, more court sittings, more prison places . . ideally tackling the roots of crime too . . crime could be reduced year after year and such would have a knock-on benefit for business through increased tourism and consumer spending, and lower costs directly associated with crime.


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## Purple (5 Oct 2017)

michaelm said:


> ideally tackling the roots of crime too


Then you invest in early stage primary education.


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## michaelm (5 Oct 2017)

Absolutely.  I generally agree with your post on the topic, from another thread.


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## gnf_ireland (5 Oct 2017)

TheBigShort said:


> I'm not sure where €5.5bn came from. If you take the €1650 tax credit away all you will be doing is taxing everyone 20% on that amount - €330 per working person. Under €700m raised on taxes.


I understood tax credits to work very differently
Lets say I make 50k, single PAYE worker - 33800 cutoff
33800 * 20% = 6760
16200 * 40% = 6480
Tax Credits = -3300
Income Tax Due = 9940

The 1650 tax credit would see tax payers pay 20% on an extra 8250. Therefore the taxpayer pays 1650 more tax and not 330

But I could be wrong .....


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## TheBigShort (5 Oct 2017)

gnf_ireland said:


> I understood tax credits to work very differently
> Lets say I make 50k, single PAYE worker - 33800 cutoff
> 33800 * 20% = 6760
> 16200 * 40% = 6480
> ...



I stand corrected on the figures.

But the point still stands. A couple earning €50,000 - €80,000 between them, both working, with a mortgage and childcare will be hit very hard by this. It's possible you could tip thousands of such couples into mortgage arrears.
Others earning less will simply be queuing up for welfare supports to keep their head above water.
Wage demands on employers will increase.
Others will rely on more borrowing, re-mortgaging, credit cards, debt re-financing.
Others will become more prudent in their consumption, reducing consumer demand, putting small medium sized businesses under severe pressure.


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## gnf_ireland (5 Oct 2017)

@TheBigShort Ok, I fully understand this. However the point was more the fact that everyone and their mother seems to be calling for more spending, but in reality no one wants to pay for this. The call for more spending is based on the fact someone else foots the bill.

The Social Democrats stated before the last election that taxation would need to increase to pay for additional services. They got 3% of the vote, and personally I think this was more down to the leaders personalities than anything else.

The harsh reality is state resources are limited. The state cannot pay for everything for everyone. No one wants to fund additional services - for a variety of reasons. Where does that leave us ???? 

We should stop comparing ourselves and our services to the Nordics if we are not willing to pay for them...


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## TheBigShort (5 Oct 2017)

gnf_ireland said:


> @TheBigShort Ok, I fully understand this. However the point was more the fact that everyone and their mother seems to be calling for more spending, but in reality no one wants to pay for this. The call for more spending is based on the fact someone else foots the bill.
> 
> The Social Democrats stated before the last election that taxation would need to increase to pay for additional services. They got 3% of the vote, and personally I think this was more down to the leaders personalities than anything else.
> 
> ...



I'm not calling for increased spending. All I do is argue against those who want to extract more tax from those earn least, and in turn reduce taxes on those who earn most.
I point out the fallacy in this thinking. Cutting the personal allowance, as you have described above, would be counterproductive.
This site is littered with threads attacking the least well-off, in order to provide for the better off. It is full of derogatory, bigoted language like 'malingers', 'those who live off the backs of everyone else' etc. 
There are those who play the system no doubt, but I have argued persistently that they are the thin end of the wedge. The proposals often made, such as the one in this thread, will only go to reduce the standards of living for ordinary working people who are trying their best to keep heads above water.


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## gnf_ireland (6 Oct 2017)

TheBigShort said:


> The proposals often made, such as the one in this thread, will only go to reduce the standards of living for ordinary working people who are trying their best to keep heads above water.


To be fair, what I said above was not a proposal - it was a question.

If you look at the pre-budget submissions, the vast majority of them are around increasing spending. The theoretical question I asked were people in general willing to fund the spending or was that spending to come from the taxation of others. 



TheBigShort said:


> This site is littered with threads attacking the least well-off, in order to provide for the better off. It is full of derogatory, bigoted language like 'malingers', 'those who live off the backs of everyone else' etc.


Personally, I think a number of things need to change with the system including these two for starters :
(a) anyone who is working 40 hours a week should not require welfare support. They should be paid sufficiently to support their family (within reason). The idea of supplementary income support does not sit well with me - the employers should be paying their employees enough to live on. And this includes the Department of Defense !!
(b) Social Welfare needs to be split in two - into those who require a security blanket (for whatever reason) versus those who make it a lifestyle choice (those who are out of work for years and years or who have never worked). The benefits between both concepts should be very different.


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## Purple (6 Oct 2017)

TheBigShort said:


> I'm not calling for increased spending. All I do is argue against those who want to extract more tax from those earn least, and in turn reduce taxes on those who earn most.
> I point out the fallacy in this thinking. Cutting the personal allowance, as you have described above, would be counterproductive.
> This site is littered with threads attacking the least well-off, in order to provide for the better off. It is full of derogatory, bigoted language like 'malingers', 'those who live off the backs of everyone else' etc.
> There are those who play the system no doubt, but I have argued persistently that they are the thin end of the wedge. The proposals often made, such as the one in this thread, will only go to reduce the standards of living for ordinary working people who are trying their best to keep heads above water.


Since the crash we've increased payroll taxes as a proportion of the overall tax take by nearly 50% while at the same time taking hundreds of thousands of people out of the payroll tax net. Do you think that's fair or equitable?
The total tax take from payroll taxes is equal to the total social welfare budget. Do you think that's fair?


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## TheBigShort (6 Oct 2017)

Purple said:


> Since the crash we've increased payroll taxes as a proportion of the overall tax take by nearly 50% while at the same time taking hundreds of thousands of people out of the payroll tax net. Do you think that's fair or equitable?
> The total tax take from payroll taxes is equal to the total social welfare budget. Do you think that's fair?



It's not about whether I think it is fair or equitable. It's about answering the question put above. To implement it, and if the figures are correct, then the proportion of payroll taxes as a % of overall tax take will have increased 50% + €5.5bn. For sure, everyone will now be an income taxpayer. But the consequences, in my view, would be counterproductive.
The question was asked above, what is your answer?


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## Purple (6 Oct 2017)

TheBigShort said:


> It's not about whether I think it is fair or equitable.


I'm asking you the question since you are telling other people what's right and wrong about their proposals to change things so it would be good to know where you are coming from.


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## TheBigShort (6 Oct 2017)

Purple said:


> I'm asking you the question since you are telling other people what's right and wrong about their proposals to change things so it would be good to know where you are coming from.



I was answering the question put in the thread. It would be good to know what your answer is, and the perhaps the basis for that answer.


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## Purple (6 Oct 2017)

TheBigShort said:


> I was answering the question put in the thread. It would be good to know what your answer is, and the perhaps the basis for that answer.


So you won't answer my questions then. Of course you don't have to but it does weaken your position when you won't give a view on these core issues.


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## The Horseman (6 Oct 2017)

gnf_ireland said:


> To be fair, what I said above was not a proposal - it was a question.
> 
> 
> 
> ...




Completely agree with this especially (b).


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## TheBigShort (6 Oct 2017)

Purple said:


> So you won't answer my questions then. Of course you don't have to but it does weaken your position when you won't give a view on these core issues.



It doesn't weaken my position, because I have answered the question that was put in the thread and the basis for that answer.
You haven't answered the question, so you have no position, neither weak or strong. 
I was hoping to avoid repetition, but here is my answer from earlier post and the basis for that answer.



TheBigShort said:


> I stand corrected on the figures.
> 
> But the point still stands. A couple earning €50,000 - €80,000 between them, both working, with a mortgage and childcare will be hit very hard by this. It's possible you could tip thousands of such couples into mortgage arrears.
> Others earning less will simply be queuing up for welfare supports to keep their head above water.
> ...



Do you have an answer to the OP question?


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## Purple (6 Oct 2017)

My view is that we need to go back to the sort of income tax system we had in the mid 90's or maybe the Swedish model. 
I paid income tax and PRSI as a first year apprentice. PRSI was paid on the first pound (punt) earned. I went onto the higher tax band as a third year apprentice (I was working in excess of 60 pay hours a week). Someone doing the same thing now doesn't pay any tax. I find that wrong, immoral and damaging to society. We cannot keep punishing people for working and creating wealth. 
We need to broaden the tax base generally through things like property tax, water charges, wealth taxes, etc. and we need to broaden the payroll tax base by getting everyone, yes everyone, who works to pay some payroll taxes. The specifics can be decided by people who have access to all the numbers.

I agree with the proposals above that the rates of unemployment benefit should be tied to how much people have paid in, make it a pay related social insurance system, and that longer term rates should be lower. That could be done by freezing the current rates for long term unemployed and only increasing the short term rates over the coming decades.  
Small steps.


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## TheBigShort (6 Oct 2017)

Here is the question again. Anything from Yes/No/Dunno will suffice at this stage.



gnf_ireland said:


> "I support the removal of the personal tax credit of 1,650 euro per person to fund increased spending on public services"



My answer is no.


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## Purple (6 Oct 2017)

TheBigShort said:


> Here is the question again. Anything from Yes/No/Dunno will suffice at this stage.


Why do you keep trying to deflect from the overall substantive issue by deflecting/directing towards the specific? This is a discussion forum. We are not the Department of Finance. The discussion is about the general nature and balance of our taxation and welfare systems.


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## TheBigShort (6 Oct 2017)

Purple said:


> Why do you keep trying to deflect from the overall substantive issue by deflecting/directing towards the specific? This is a discussion forum. We are not the Department of Finance. The discussion is about the general nature and balance of our taxation and welfare systems.



I'm not diverging at all. A specific question was asked, I have answered the question and provided the basis for that answer. You can do the same if you want. If you don't want then fine. But to answer the specific question asked by the OP may go someway to understanding your position on other substantive issues.


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## Purple (6 Oct 2017)

TheBigShort said:


> I'm not diverging at all. A specific question was asked, I have answered the question and provided the basis for that answer. You can do the same if you want. If you don't want then fine. But to answer the specific question asked by the OP may go someway to understanding your position on other substantive issues.


The substantive issue from the OP was;



gnf_ireland said:


> Over the last few weeks, the usual budget discussions have occured were everyone wants increased spending using other peoples money. Maybe its time to decide what type of services we want, and how we fund them.



Stop deflecting the discussion into the minutia of a particular point. 
I have outlined my opinions above.


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## TheBigShort (6 Oct 2017)

Purple said:


> The substantive issue from the OP was;



Yes, upon which a direct question was asked.


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## Purple (6 Oct 2017)

TheBigShort said:


> Yes, upon which a direct question was asked.


There you go again.


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## TheBigShort (6 Oct 2017)

gnf_ireland said:


> I am wondering if a poll was run for say 10,000 people, across all areas of society, and suggested the following wording how many would say yes:
> 
> _"I support the removal of the personal tax credit of 1,650 euro per person to fund increased spending on public services"_





Purple said:


> So you won't answer my questions then. Of course you don't have to but it does weaken your position when you won't give a view on these core issues.



I get it, if I don't answer _your _question, I'm 



Purple said:


> .... trying to deflect from the overall substantive issue by deflecting/directing towards the specific?



But if you don't answer the OP question, that's just fine and dandy!


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