# Jimmy Carr talking about his tax avoidance



## Brendan Burgess (23 Jun 2012)

http://www.youtube.com/watch?feature=player_embedded&v=cAcjntGQuCU

Fair play to him. He faced the music on 4 out of 5 cats. 

Seán Locke is good, but the rest are poor. 

Brendan


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## Sue Ellen (23 Jun 2012)

Was it not very staged and vetted though?


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## Knuttell (23 Jun 2012)

Not a fan of Jimmy Carr but was quite surprised at the all the outrage.The guy sheltered his earnings in a a legitimate fashion and ended up paying 1% tax.

Its just good tax planning,the outrage I suspect is really nothing more than envy that he had the smarts to hire a good tax accountant.

Would I do the same if I could?you better believe it.


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## blueband (24 Jun 2012)

same here, he done noting wrong, who would want to give the 'taxman' a penny more than they have to.


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## truthseeker (24 Jun 2012)

I thought I was missing something on this story with all the media coverage and talk of him apologising etc...

He didnt break the law. He took advantage of a legal scheme to pay less tax. 

Whats the problem?


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## circle (24 Jun 2012)

The problem was that he saw nothing morally wrong with not contributing a "fair share" to the society he lives in, particularly as he could well afford it. 

What makes it worse for him, compared to any other tax-avoiding multi-millionaire, is his hypocrisy in earning a lot of his fortune through comically lambasting politicians for their display of similar financial ethics.


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## Brendan Burgess (24 Jun 2012)

Sue Ellen said:


> Was it not very staged and vetted though?



Sue Ellen

You ruined it for me.  I had assumed it was spontaneous.


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## Sue Ellen (24 Jun 2012)

Brendan Burgess said:


> Sue Ellen
> 
> You ruined it for me.  I had assumed it was spontaneous.



   I know they're all staged but that one was particularly bad.


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## bullbars (25 Jun 2012)

circle said:


> What makes it worse for him, compared to any other tax-avoiding multi-millionaire, is his hypocrisy in earning a lot of his fortune through comically lambasting politicians for their display of similar financial ethics.


 
Just an observation; a few have already said that it was a legal scheme and he was savy to have done so. If it was one of our own politicians would we have been as easy on them.


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## blueband (25 Jun 2012)

nobody here broke the law! why would anyone in their right mind pay anymore than the have to, regardless of what you earn!


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## dereko1969 (25 Jun 2012)

blueband said:


> nobody here broke the law! why would anyone in their right mind pay anymore than the have to, regardless of what you earn!


 
Because if everyone did it we would have no services, no roads, no health system etc..

Obviously no-one stating this has any concept of society and this is what contributed to the sorry state we find ourselves in.

Carr himself also made jokes about the "1%" and greedy bankers when he himself had also lost his moral compass.


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## MrMan (25 Jun 2012)

dereko1969 said:


> Because if everyone did it we would have no services, no roads, no health system etc..
> 
> Obviously no-one stating this has any concept of society and this is what contributed to the sorry state we find ourselves in.
> 
> Carr himself also made jokes about the "1%" and greedy bankers when he himself had also lost his moral compass.



You obviously haven't seen him live if you think his moral compass is in any way linked to his tax dealings. Comedians are there to make you laugh, and practice what you preach doesn't come into it.


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## shnaek (25 Jun 2012)

dereko1969 said:


> Because if everyone did it we would have no services, no roads, no health system etc..



So, pretty much as we are then...


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## Firefly (25 Jun 2012)

dereko1969 said:


> Because if everyone did it we would have no services, no roads, no health system etc..


 
Unless, having the tax rate at 1% does in fact bring in more tax than tax at a higher rate. If not, then why doesn't David Cameron just remove/increase this rate rather than making the statements he did? Simples.


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## Chris (28 Jun 2012)

I don't know anything about Carr's political beliefs, but I applaud him for having reduced his taxes as much as possible. This left him with more money to save or invest or spend frivolously, all of which is good good for the economy.

It is beyond me why people would complain about someone legally avoiding taxation. And I agree with Firefly, higher taxation does not mean higher revenue, but rather in most cases it means lower revenue.




dereko1969 said:


> Because if everyone did it we would have no services, no roads, no health system etc..



So your logic is that if government doesn't provide these they simply wouldn't exist? How does everything the government does not provide end up in ample supply for every type of budget?


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## Complainer (29 Jun 2012)

truthseeker said:


> He didnt break the law. He took advantage of a legal scheme to pay less tax.
> 
> Whats the problem?



The problem is the law (or lack of law) that allows rich people to pay little or no tax by exploiting legal loopholes.

The other problem is the hypocrisy of Cameron whose family wealth is built on the back of the offshore fund business having the neck to have a go at Carr.


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## truthseeker (30 Jun 2012)

Complainer said:


> The problem is the law (or lack of law) that allows rich people to pay little or no tax by exploiting legal loopholes.



But thats not Carrs problem - thats the governments problem for not having a more sensible law in place.

If someone acts in accordance with the law, then they shouldnt be vilified for it.


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## mandelbrot (2 Jul 2012)

truthseeker said:


> But thats not Carrs problem - thats the governments problem for not having a more sensible law in place.
> 
> If someone acts in accordance with the law, then they shouldnt be vilified for it.


 
There's the spirit of the law and then there's the interpretation of that law. You can be pretty sure that the person(s) drafting the tax law didn't envisage it being abused / sidestepped in that way.

How do you define "sensible law"? - go look at any piece of legislation you like, tax law or otherwise, and see how "sensible" it is to read.


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## dereko1969 (2 Jul 2012)

The Irish anti-avoidance legislation is very simple and basically amounts to if it walks like a duck etc..

If any of you have ever seen any UK Revenue legislation it would make you cry, they try to legislate for every eventuality and always miss an element.


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## truthseeker (2 Jul 2012)

mandelbrot said:


> There's the spirit of the law and then there's the interpretation of that law. You can be pretty sure that the person(s) drafting the tax law didn't envisage it being abused / sidestepped in that way.
> 
> How do you define "sensible law"? - go look at any piece of legislation you like, tax law or otherwise, and see how "sensible" it is to read.



I dont disagree with any of this - but again, how is this Carrs problem? He hired a tax accountant who said 'listen, here is a scheme where you pay a very small amount of tax' - the tax accountant is an expert who Carr is paying for advice. If anything its the tax accountant who is abusing the law. Not Jimmy Carr.

And as for the spirit of the law and the interpretation of the law - laws should be clear and not open to ambiguous interpretation.


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## blueband (2 Jul 2012)

how is the accountant abusing the law? he is simply doing the job he is paid to do!


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## truthseeker (3 Jul 2012)

blueband said:


> how is the accountant abusing the law? he is simply doing the job he is paid to do!



Well mandelbrot is saying the law is being abused. If this is so, its more likely to be the accountant abusing it than Jimmy Carr.


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## mandelbrot (4 Jul 2012)

truthseeker said:


> Well mandelbrot is saying the law is being abused. If this is so, its more likely to be the accountant abusing it than Jimmy Carr.


 
That's tantamount to saying that if some bright spark found a loophole in the law so that they could legally kill people, and you availed of their service to bump off someone you don't like, then that's OK because
i) It's legal, and
ii) It's they who are abusing the law rather than you.


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## truthseeker (4 Jul 2012)

mandelbrot said:


> That's tantamount to saying that if some bright spark found a loophole in the law so that they could legally kill people, and you availed of their service to bump off someone you don't like, then that's OK because
> i) It's legal, and
> ii) It's they who are abusing the law rather than you.



That analogy doesnt work unless Jimmy Carr went to the accountant and said 'I want you to pay only 1% tax for me'. 

Its far more likely it was the accountant who said 'I know a way that you can only pay 1% tax legally'.

The intent hardly came from Jimmy Carrs side - unless he knows tax law which I doubt.

Id also make a serious distinction about the morality surrounding tax laws and money and the morality surrounding murdering people! Apples and oranges.


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## mandelbrot (4 Jul 2012)

truthseeker said:


> That analogy doesnt work unless Jimmy Carr went to the accountant and said 'I want you to pay only 1% tax for me'.
> 
> Its far more likely it was the accountant who said 'I know a way that you can only pay 1% tax legally'.
> 
> ...


 
I never said who approached who in my scenario! Lets say they approach you after seeing you being abused by your mother-in-law, and offer you their perfectly legal service...

There may be a distinction between the degree of immorality of the 2 things, but aggressive tax avoidance to ensure that you personally don't pay what by any yardstick would be a "fair" share of tax proportionate to your income while people who earn an awful lot less than you pay much more tax, is certainly immoral IMHO.


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## truthseeker (4 Jul 2012)

mandelbrot said:


> I never said who approached who in my scenario! Lets say they approach you after seeing you being abused by your mother-in-law, and offer you their perfectly legal service...



If the abuse was bad enough.........



mandelbrot said:


> There may be a distinction between the degree of immorality of the 2 things, but aggressive tax avoidance to ensure that you personally don't pay what by any yardstick would be a "fair" share of tax proportionate to your income while people who earn an awful lot less than you pay much more tax, is certainly immoral IMHO.



Its a level of immorality I can live with tbh. I see it more in terms of being clever enough to get a good tax accountant.


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## Leo (5 Jul 2012)

mandelbrot said:


> ... but aggressive tax avoidance to ensure that you personally don't pay what by any yardstick would be a "fair" share of tax proportionate to your income while people who earn an awful lot less than you pay much more tax, is certainly immoral IMHO.


 
I'd imagine Jimmy's 1% was still way more than many, if not most people pay. If you take he broader tax base and not just hone in on income tax...


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## bullbars (5 Jul 2012)

Error Post.


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## Firefly (6 Jul 2012)

Whether you condone this tax planning or not is irrelevant IMO, because it is largely subjective....some from the left would argue for higher taxes whilst some on the right would say even 1% is too much. IMO, if he is opertaing within the law then more power to him. If he is not then he should be prosecuted. Taxes should be continually review by government to ensure that whatever breaks are given bring in more money than what they cost....if this particular tax break is costing more money than what it brings in then it should be changed.

In any case this particular incident is pretty small fry - what about Denis O'Brien declaring his residence as Portugal and thus avoiding 50m in Capital Gains Taxes from the sale of ESAT? Perfectly legal at the time...wasn't the result the introduction of the whole Not Ordinarily Resident thing which has tightened tax avoidance in this country??


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## mandelbrot (6 Jul 2012)

Firefly said:


> Whether you condone this tax planning or not is irrelevant IMO, because it is largely subjective....some from the left would argue for higher taxes whilst some on the right would say even 1% is too much. IMO, if he is opertaing within the law then more power to him. If he is not then he should be prosecuted. Taxes should be continually review by government to ensure that whatever breaks are given bring in more money than what they cost....if this particular tax break is costing more money than what it brings in then it should be changed.
> 
> In any case this particular incident is pretty small fry - what about Denis O'Brien declaring his residence as Portugal and thus avoiding 50m in Capital Gains Taxes from the sale of ESAT? Perfectly legal at the time...wasn't the result the introduction of the whole Not Ordinarily Resident thing which has tightened tax avoidance in this country??


 
There's a big difference between a tax break and a loophole in legislation!

A tax break is deliberately inserted into tax legislation, to encourage investment or transactions of a certain type - Section 23, SSIA etc...

A loophole is where someone manages to find sufficient looseness in the wording to facilitate circumventing the intent of legislation, often through what are essentially artificial transactions.

So if you take the example of Denis O'Brien avoiding 50m, if you say there were 2m taxpayers in the country at the time, indirectly they each had to stump up an extra €25 to cover the hole left by his avoidance.

I'm genuinely at a loss at the attitude of people who say "more power to them" and "fair play to them" about people who manage to contrive their way out of paying tax - if you are a taxpayer in the country where they've avoided the tax then they are costing you money (unless you're managing to avoid as well  ). To me it's like being out with a group of people, and saying fair play the fella who always manages to dodge his round!


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## Sunny (6 Jul 2012)

mandelbrot said:


> There's a big difference between a tax break and a loophole in legislation!
> 
> A tax break is deliberately inserted into tax legislation, to encourage investment or transactions of a certain type - Section 23, SSIA etc...
> 
> ...


 
+1. Aggressive tax planning like this is simply wrong. It doesn't matter if the 1% he paid was more in absolute terms than my 52% of income.  

However, companies do it all the time and we don't seem to have a problem with it. Indeed many companies use Ireland to lower their tax bill in their home country. I know of one person working in the tax department of a UK financial institution who got a bonus bigger than most of their traders because of the tax he saved the bank using various legal loopholes.

At this stage, most countries tax codes need to be ripped up and written again. They are so complicated and with increasing globalisation, tax arbitrage has become a big issue.


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## Firefly (6 Jul 2012)

mandelbrot said:


> There's a big difference between a tax break and a loophole in legislation!
> 
> A tax break is deliberately inserted into tax legislation, to encourage investment or transactions of a certain type - Section 23, SSIA etc...
> 
> A loophole is where someone manages to find sufficient looseness in the wording to facilitate circumventing the intent of legislation, often through what are essentially artificial transactions.


 
I accept that, but the fact is that the whole thing comes down to whether the action is in accordance with the law. If someone finds a loophole, then it might be morally wrong (as in the case of Denis O'Brien IMO) but if it's within the law I don't see a problem. The onus should be on having water-tight laws in the first place. 




mandelbrot said:


> So if you take the example of Denis O'Brien avoiding 50m, if you say there were 2m taxpayers in the country at the time, indirectly they each had to stump up an extra €25 to cover the hole left by his avoidance.


 
I agree with you...the rest of us had to pick up the tab here. However, I don't think Denis O'Brien or his tax advisors are at fault here, rather whoever is responsible for maintaining the tax law.



mandelbrot said:


> I'm genuinely at a loss at the attitude of people who say "more power to them" and "fair play to them" about people who manage to contrive their way out of paying tax - if you are a taxpayer in the country where they've avoided the tax then they are costing you money (unless you're managing to avoid as well  ). To me it's like being out with a group of people, and saying fair play the fella who always manages to dodge his round!


 
I understand you point, and I suppose as someone who believes that we would be better served with a low tax economy with cheaper (not necessarily smaller!) government I was drawn to making those remarks. Again though, whilst I probably shouldn't be saying "more power to them", I nevertheless don't blame them, just like I don't blame anyone for sitting at home on the dole when they should be out working....I don't blame them individually for this, but blame the system as it allows this to happen. 

I like the last analogy too...that guy usually gets found out pretty quickly...no legislation needed here


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## truthseeker (6 Jul 2012)

mandelbrot said:


> I'm genuinely at a loss at the attitude of people who say "more power to them" and "fair play to them" about people who manage to contrive their way out of paying tax - if you are a taxpayer in the country where they've avoided the tax then they are costing you money (unless you're managing to avoid as well  ). To me it's like being out with a group of people, and saying fair play the fella who always manages to dodge his round!



I think its because of this: People hate paying taxes. Yeah, we know we need them for services and to keep running the country, but in this country we seem to get little for our money and a lot of it seems to get squandered. We hear story after story about politicians and ink cartridges and expense accounts etc....

Maybe if we lived somewhere where the government used the taxes wisely and provided good public services people would feel differently. 

Dodging the round isnt the same. The analogy would work if we all paid for our round and got served up half filled glasses of some swill concocted from the left overs of other peoples drinks. In that case, I applaud the guy who manages to dodge his round.

Id like to have your idealistic view of taxes Mandelbrot, unfortunately reality in Ireland has soured my viewpoint.


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## Firefly (6 Jul 2012)

Sunny said:


> +1. Aggressive tax planning like this is simply wrong.


 
We are all entitled to our opinions on this, but it is incorrect to say it's wrong when in fact it's legal.



Sunny said:


> However, companies do it all the time and we don't seem to have a problem with it. Indeed many companies use Ireland to lower their tax bill in their home country. I know of one person working in the tax department of a UK financial institution who got a bonus bigger than most of their traders because of the tax he saved the bank using various legal loopholes.


Individuals do it too and it's not just the rich. Not focusing on you Sunny, but did you take out an SSIA? Same thing on a lesser scale, but still costed the taxpayer several hundred million in the aggregate.



Sunny said:


> At this stage, most countries tax codes need to be ripped up and written again. They are so complicated and with increasing globalisation, tax arbitrage has become a big issue.


 
I agree.


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## Sunny (6 Jul 2012)

Firefly said:


> We are all entitled to our opinions on this, but it is incorrect to say it's wrong when in fact it's legal.
> 
> 
> Individuals do it too and it's not just the rich. Not focusing on you Sunny, but did you take out an SSIA? Same thing on a lesser scale, but still costed the taxpayer several hundred million.
> ...


 
So take the recent John Gallagher case. He used a legal loophole to walk free. Is it incorrect to say that is wrong? I know its off topic but just pointing out that not everything that is legal is right 

The SSIA is not the same thing. It was not a loophole. I still paid every cent of tax I owed as the money I put into the SSIA came from after tax income. It was also available to every citizen of this country and not just those who could divert income into corporate structures and then hire a good tax accountant to divise a scheme. You try doing exactly the same thing that Jimmy Carr did to lower your tax bill. Can you do it? Bet you can't.


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## Firefly (6 Jul 2012)

Sunny said:


> So take the recent John Gallagher case. He used a legal loophole to walk free. Is it incorrect to say that is wrong? I know its off topic but just pointing out that not everything that is legal is right


 
I agree with you...I think what happened with the John Gallagher thing was a disgrace. I don't blame him our his lawyers though (even though I would *despise* both of them). I blame the law, and those responsible for maintaining it, for allowing this to happen in the first place and would hope that it is changed as a result. 


Edit: I also think what Denis O'Brien did was a disgrace too...no way should he have been allowed to get away with that level of tax avoidance. But he operated within the law so I don't blame him personally. Ditto for U2 and the rest. And ditto for all the multinationals operating here....




Sunny said:


> The SSIA is not the same thing. It was not a loophole. I still paid every cent of tax I owed as the money I put into the SSIA came from after tax income. It was also available to every citizen of this country


 
I agree that the SSIA was not a loophole but a tax incentive...the end result is the same though....less money going legally into the system. The taxpayer ends up footing the bill, which in the case of the SSIA was actually hillarious as everyone was in on it / availed of it.



Sunny said:


> ..and not just those who could divert income into corporate structures and then hire a good tax accountant to divise a scheme. You try doing exactly the same thing that Jimmy Carr did to lower your tax bill. Can you do it? Bet you can't.


 
I agree. The rich will always find ways of protecting their wealth and the richer you are the more you have to gain by protecting your wealth. I don't have any problem with this for the individual(s) concered, and as I agreed with you earlier, it's the tax codes should be changed.


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## Chris (11 Jul 2012)

mandelbrot said:


> I'm genuinely at a loss at the attitude of people who say "more power to them" and "fair play to them" about people who manage to contrive their way out of paying tax - if you are a taxpayer in the country where they've avoided the tax then they are costing you money (unless you're managing to avoid as well  ). To me it's like being out with a group of people, and saying fair play the fella who always manages to dodge his round!



Not trying to single you out here, but I find the attitude towards wealthy people's income and assets, their property, quite disturbing. These headlines come Jo with such regularity and everyone believes that so many of our problems could be solved if we simply took a "fair share" from "the rich".
How about for a change there is a call for the general public to pay their fair share. In both Ireland and the UK almost 50% of income earners pay no income tax at all. But somehow it is fair to demand that rich people, who pay about 80% of all income taxes should hand over even more?!?!
There's a great clip on YouTube that shows. Icely where taxing the rich would end up: http://www.youtube.com/watch?v=661pi6K-8WQ


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## mandelbrot (11 Jul 2012)

Chris said:


> Not trying to single you out here, but I find the attitude towards wealthy people's income and assets, their property, quite disturbing. These headlines come Jo with such regularity and everyone believes that so many of our problems could be solved if we simply took a "fair share" from "the rich".
> How about for a change there is a call for the general public to pay their fair share. In both Ireland and the UK almost 50% of income earners pay no income tax at all. But somehow it is fair to demand that rich people, who pay about 80% of all income taxes should hand over even more?!?!
> There's a great clip on YouTube that shows. Icely where taxing the rich would end up: http://www.youtube.com/watch?v=661pi6K-8WQ


 
I actually agree with the point you've made there Chris (if you look at my posting history you won't see me posting any of that Sinn Fein / ULA "tax the rich" nonsense anywhere, although I doubt I lean as far right as you!), and I appreciate you're not singling me out - my issue is with people who create contrivances and artificial transactions in order to avoid what I see as being the tax they should be obliged to pay, if they were playing fair!

Reclassifying money that has been earned as income (and should be taxed accordingly by any fair-minded interpretation of the intent of tax legislation), as something different in order to reduce the liability is wrong in my opinion. And it costs other high earners (who haven't managed to game the system) as much as it costs the little guy!

Hence my analogy of the group of people out having drinks could be tweaked to say, you are out with a group of people, one of whom is Jimmy Carr, and every time it's his round the fecker vanishes... but he did buy some peanuts at one stage..!


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## Complainer (15 Jul 2012)

Chris said:


> Not trying to single you out here, but I find the attitude towards wealthy people's income and assets, their property, quite disturbing. These headlines come Jo with such regularity and everyone believes that so many of our problems could be solved if we simply took a "fair share" from "the rich".
> How about for a change there is a call for the general public to pay their fair share. In both Ireland and the UK almost 50% of income earners pay no income tax at all. But somehow it is fair to demand that rich people, who pay about 80% of all income taxes should hand over even more?!?!
> There's a great clip on YouTube that shows. Icely where taxing the rich would end up: http://www.youtube.com/watch?v=661pi6K-8WQ



Why the focus on income tax? Look at the big picture, including VAT, which was bringing in more that income tax recently.


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## Chris (17 Jul 2012)

Complainer said:


> Why the focus on income tax? Look at the big picture, including VAT, which was bringing in more that income tax recently.



The reason is that this thread is about Carr's taxes on income not on spending.

But of course VAT is also important, and I would still say that rich people pay way more VAT than the rest of the population. Their houses cost more, their cars cost more, they buy more expensive jewellery, their furniture costs more, all resulting in a higher VAT bill. Let me give you an example, I have a very wealthy neighbour who buys a new Merc every 2-3 years The last one he bought, a CLS 63, attracted over €40k in VAT and VRT, that would require an average person to spend €200k, and he did this on one purchase.

Anyway, back to Carr, I still believe that he did nothing wrong by reducing his tax bill, quite the opposite, he has kept money out of the wasteful hands of politicians. Unless Carr has invested all his money in Gilts he has done the economy a great service. I don't think there is anything unfair about it, he simply employed a better adviser than the rest did, who are now of course perfectly able to pursue the same process. If tax codes weren't such a mangled mess of one law trying to stop unintended consequences of another law then there would be no loop hole or avoidance wrangling. But the day a government will actually simplify the tax code is the day pigs will fly; and I would rather bet on evolution helping out pigs.


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## blueband (17 Jul 2012)

Chris said:


> Not trying to single you out here, but I find the attitude towards wealthy people's income and assets, their property, quite disturbing. These headlines come Jo with such regularity and everyone believes that so many of our problems could be solved if we simply took a "fair share" from "the rich".
> How about for a change there is a call for the general public to pay their fair share. In both Ireland and the UK almost 50% of income earners pay no income tax at all. But somehow it is fair to demand that rich people, who pay about 80% of all income taxes should hand over even more?!?!
> 
> then how come the latest report out shows the gap between rich and poor is widening all the time?


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## Purple (17 Jul 2012)

blueband said:


> then how come the latest report out shows the gap between rich and poor is widening all the time?





The latest reports I heard about came from Social Justice Ireland, a lobby group with a vested interest in the poverty industry. It is not in the least bit surprising that their report was covered extensively by RTE, a biased left-wing media outlet. Reports from Social Justice Ireland about poverty are like reports from Phillip Morris Inc. about second hand smoking.
What Chris posted is simple fact. What SJI say is derived from CSO information and then subjected to their own measurement criteria.


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## Sunny (17 Jul 2012)

The reason why wealthy people pay most of the overall income tax take is that they earn more. They are not asked to pay a higher rate of tax than someone on 50k. Someone on 500k is on the same effective tax rate (many times actually less) than someone on 50k. It is as pointless as saying that men pay most of income tax taken in every year. Everyone (including low earners) should pay their fair share of tax. However, we need to the look at the percentage of income paid, not the absolute amount. Is the person on €1m who pays €500k a better citizen than the person on €50k who pays €25k? 

As for surveys showing the gap between the rich and the poor? Give me a break.


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## Purple (17 Jul 2012)

Sunny said:


> The reason why wealthy people pay most of the overall income tax take is that they earn more. They are not asked to pay a higher rate of tax than someone on 50k. Someone on 500k is on the same effective tax rate (many times actually less) than someone on 50k. It is as pointless as saying that men pay most of income tax taken in every year. Everyone (including low earners) should pay their fair share of tax. However, we need to the look at the percentage of income paid, not the absolute amount. Is the person on €1m who pays €500k a better citizen than the person on €50k who pays €25k?
> 
> As for surveys showing the gap between the rich and the poor? Give me a break.




Someone on €500K will pay a much higher proportion of their income in tax than someone on €50k because the marginal rate accounts for a greater proportion of their tax bill. Someone on €50k pays way less than €25k, someone on €1 million (should) pay more than €500k.

I have a thread elsewhere about this. I am of the view that there should be a cap on the level of income tax that any one individual pays. Maybe it should be €1 million. The loss to the exchequer would be small but more very high income earners would live here and pay VAT while spending their money. It would also reduce the size of the tax avoidance industry. I know the folks at McCann-Fitzgerald and various accountancy firms would not be too happy but that would be a good thing.


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## Sunny (17 Jul 2012)

Purple said:


> Someone on €500K will pay a much higher proportion of their income in tax than someone on €50k because the marginal rate accounts for a greater proportion of their tax bill. Someone on €50k pays way less than €25k, someone on €1 million (should) pay more than €500k.


 
They will pay a higher but not a significantly higher proportion. The effective tax rate of the 10,000 top earners is about 29%. They earned an average of €590,000. My effective tax rate on a fraction of that income is 26%. Both situations ignore PRSI etc. People on very large incomes do not pay the most of tax because they are burdened with huge tax rates. They pay the most because they earn the most.

I am not saying that we should tax them more. Simply saying that we shouldn't be making out that the wealthy are doing more than anyone else with regards to paying tax just because the absolute amount of tax they pay is greater than other peoples.


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## Complainer (21 Jul 2012)

Chris said:


> The reason is that this thread is about Carr's taxes on income not on spending.


Mmmm just a tad convenient to take the blinkered view of income tax only, no?



Chris said:


> But of course VAT is also important, and I would still say that rich people pay way more VAT than the rest of the population. Their houses cost more, their cars cost more, they buy more expensive jewellery, their furniture costs more, all resulting in a higher VAT bill. Let me give you an example, I have a very wealthy neighbour who buys a new Merc every 2-3 years The last one he bought, a CLS 63, attracted over €40k in VAT and VRT, that would require an average person to spend €200k, and he did this on one purchase.


Mmmm, just a tad selective in the story there, no? No mention of overseas spending? No mention of overseas investment? No mention of %saved vs %spent? No mention of whether the neighbour's car is a company car or not, and all the tax implications that go with that? No mention of the %spent on customs and excise duties by the stereotypical smoking and drinking layabout, if some AAM posters are to be believed? But really, can't we move beyond the 'I know a bloke who buys a new car' stories?



Chris said:


> Anyway, back to Carr, I still believe that he did nothing wrong by reducing his tax bill, quite the opposite, he has kept money out of the wasteful hands of politicians. Unless Carr has invested all his money in Gilts he has done the economy a great service. I don't think there is anything unfair about it, he simply employed a better adviser than the rest did, who are now of course perfectly able to pursue the same process.


I don't think anyone questioned the legality of Carr's actions, but there is certainly an ethical and moral issue here. The issue arises from Carr's tendency to rush to judgement on others, for any and all kinds of reasons. If you're going to appoint yourself as judge and jury, you want to make sure you have a clean record. It's a bit like Bono lecturing the Irish government on how much aid they should be giving to Africa while avoiding Irish taxes by sheltering his income offshore. If he wants to avoid taxes, fine - but just shut up lecturing others.



Sunny said:


> However, we need to the look at the percentage of income paid, not the absolute amount.


Actually, we need to look at the percentage of income paid on ALL taxes, not just income tax.



Sunny said:


> As for surveys showing the gap between the rich and the poor? Give me a break.


Why - an inconvenient truth perhaps?


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## Sunny (21 Jul 2012)

No, because the surveys are a load of crap. Same as the ones that show public sector employees earn more than the private sector. They are all deeply flawed. 

As for looking at all taxes, what will that show you?


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## Complainer (21 Jul 2012)

Sunny said:


> No, because the surveys are a load of crap. Same as the ones that show public sector employees earn more than the private sector. They are all deeply flawed.


And what are the particular flaws in the EU-SILC survey on which the Social Justice Ireland report was based?



Sunny said:


> As for looking at all taxes, what will that show you?


I suspect that it will show that people on low incomes pay a much larger portion of their income on taxes than people on high incomes, when you take VAT and excise duties into account in particular.


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## Purple (22 Jul 2012)

Complainer said:


> I suspect that it will show that people on low incomes pay a much larger portion of their income on taxes than people on high incomes, when you take VAT and excise duties into account in particular.



Can you offer more than a suspicion?


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## Chris (26 Jul 2012)

Complainer said:


> Mmmm just a tad convenient to take the blinkered view of income tax only, no?


Not at all, it is simply called sticking to the topic of the thread. But I would be very interested in a debate over VAT and other sources of tax, so maybe go ahead and start another thread.



Complainer said:


> Mmmm, just a tad selective in the story there, no? No mention of overseas spending? No mention of overseas investment? No mention of %saved vs %spent? No mention of whether the neighbour's car is a company car or not, and all the tax implications that go with that? No mention of the %spent on customs and excise duties by the stereotypical smoking and drinking layabout, if some AAM posters are to be believed? But really, can't we move beyond the 'I know a bloke who buys a new car' stories?


Not selective at all. Do you think my rich neighbour is an exception when it comes to spending? But let's address some of the points you question:
1) Overseas spending: even when cars are bought abroad you have to pay the VAT and VRT here. Everybody is able to buy stuff over the internet from abroad at lower tax rates, so this is not something exclusively open to rich people when they are jetting around the world.
2) Overseas investment: no matter where the investment is it attracts taxes here to those that are resident. I have 0% invested in Ireland, and for my rich neighbour's sake I hope he has the same. And the reason people are not investing here is because they think that either government action or inaction are making things worse. Increasing taxes will certainly not make it a more attractive place to invest.
3) The Mercedes is a private car, his company provided car is a fairly standard Opel Insignia. But I agree that the cost of getting to work should not only be a deductible reserved for the self employed, it should be open to everyone.
4) If a layabout spends a lot on cigarettes and booze and receives all their income from state benefits, then they are not contributing to the tax pool, they are simply handing some of the tax pool's money back that was originally there anyway.

I think it is total ignorance of reality to suggest that the story of my neighbour is somehow an isolated occurrence. People give out about the income "the rich" have and the lavish life styles they live, but then suddenly when it doesn't suite your belief that rich people do not pay their fair share of taxes you ignore the fact that rich people spend an awful lot of their money on luxury items that attract huge amounts of VAT. But maybe you can provide some evidence that suggests that rich people do not contribute the lions share of VAT, as they do with income tax.



Complainer said:


> I don't think anyone questioned the legality of Carr's actions, but there is certainly an ethical and moral issue here. The issue arises from Carr's tendency to rush to judgement on others, for any and all kinds of reasons. If you're going to appoint yourself as judge and jury, you want to make sure you have a clean record.



He is a comedian who makes a living out of one-liners that make people laugh. I think it is a far stretch of the imagination to say that he is judging people for their actions.



Complainer said:


> It's a bit like Bono lecturing the Irish government on how much aid they should be giving to Africa while avoiding Irish taxes by sheltering his income offshore. If he wants to avoid taxes, fine - but just shut up lecturing others.


I fully agree, Bono is a total hypocrite. 


Bottom line is this, no matter how much people say that rich people are not paying their fair share and that all the problems of financing public services would go away if we just taxed the rich a fair amount, the numbers just don't add up.

Let's see what would happen if the UK introduced a 100% tax on the top 0.1%, often called the super rich; surely they have enough other assets to live out their lives that they don't need their lavish income:
The top 0.1% have an annual mean income of £780,043 x 42,000 people = £32.8bn. That is barely 25% of the annual budget deficit for the year 2011!!!
Maybe the top 0.1% is not enough, so let's extend it to the top 1%:
The  top 1% have an annual mean income of £155,832 x 421,000 people = £65.6bn. That is still only 50% of the annual budget deficit for the year 2011!!!
And where is all that income going to be one year after the tax hike? Gone forever.

Obama summed it all up nicely a while back when he was asked why he was in favour of raising capital gains taxes when the past decade had proven that lowering capital gains tax actually resulted in more revenue. His answer was that for him it was about fairness. So people really believe that we will live in a better world if governments take a higher percentage but as a result have less to spend. It's pure genius, isn't it?!?!?

Britain, Ireland, USA, Germany, France, none of them have a deficit because of tax revenue problems. They all have a spending problem, and have quite simply run out of other people's money to borrow or take in order to finance out of control spending. This might not fit well with your socialist ideology but I think it is time to face reality.

Sources:
http://static.guim.co.uk/sys-images...3/21/1332345654504/UK-deficit-graphic-008.jpg
http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom


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## Complainer (28 Jul 2012)

In all fairness, Carr has built a large part of his reputation on taking the high moral ground. Look at his attack on 'tax avoiding bankers' here for context.

http://www.youtube.com/watch?v=WHwjRx2AG8M

Your analysis is still rather selective. You ignore the ability of wealthier people to spend more time overseas, to buy property overseas and to invest in overseas companies. Your analysis of proposed taxes in the UK ignore the option of an asset tax or wealth tax, which seems to work reasonably well in your beloved Switzerland, France and elsewhere.

Obama's CGT move was to close a loophole exploited by many companies, who opted to return investment to shareholders via increased stock prices (attracting CGT) instead of dividends (attracting income tax). As usual, those who were exploiting the loophole squeal a bit when they caught. I think we'll hear a bit more squealing over the coming years.

But nice that we could agree on Bono.


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## T McGibney (28 Jul 2012)

"He who lives by the jeer dies by the jeer"-  The Financial Times on Jimmy Carr


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## Purple (28 Jul 2012)

Complainer said:


> Obama's CGT move was to close a loophole exploited by many companies, who opted to return investment to shareholders via increased stock prices (attracting CGT) instead of dividends (attracting income tax).


He also wants American companies to pay tax in America (rather than here). In the context of this discussion I presume you support this. Will you also support the pay cuts for public servants and reduction in services to the public that would result if US companies pulled out of this tax haven?


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## Chris (30 Jul 2012)

Complainer said:


> In all fairness, Carr has built a large part of his reputation on taking the high moral ground. Look at his attack on 'tax avoiding bankers' here for context.
> 
> http://www.youtube.com/watch?v=WHwjRx2AG8M
> 
> ...



I think you need to do a bit more research on the points you are trying to make. Switzerland's wealth tax is only on assets held in the country which essentially makes it voluntary, as you can live and work in Switzerland and have all your assets in a country with no wealth tax, making it by all means a voluntary tax. I'm also sure that rich people in Britain would gladly sign up for a wealth tax of 0.3% if they had the same income taxes as Switzerland.

France does not have a successful wealth tax as rich people keep their assets largely outside of France. But I'm not surprised that you would advocate seizing people's private property through wealth taxation with the blinkered view of the effect that will have on people with large assets; how long do you think those assets or people will remain in the UK? And just to demonstrate how futile a wealth tax would be take a look at these facts:
- £225bn is the total wealth of the top 100 in the UK
- that would cover the UK's budget deficit for 20 months if all of the wealth were seized
- £40bn is the wealth of the top 3 who are of Indian and Russian origin and would be gone before the announcement of a wealth tax was completed
- so with £185bn left the deficit would be covered for only 16 months
Of course all this ignores what would happen when those people that make the investments, that make all the jobs possible suddenly, didn't have the capital to invest.

Obama's planned move on CGT has nothing to do with loopholes, he said so himself. In the US it was always more attractive to pay out dividends as qualified dividends are taxed at 15% irrespective of your total income while short term capital gains tax rates go up to 35%. The undeniable truth is that when CGT rates went down CGT revenue went up, how can that possibly be a bad thing that needs rectifying?

It is also total nonsense to suggest that it is in any way more difficult for the average Joe to invest overseas or buy goods from anywhere in the world. For equities you don't even need a foreign broker and just look at the droves of Irish people that got caught up in property investments in Spain and Bulgaria and god knows what other dodgy places. And I've said it before, it doesn't matter where an Irish resident invests, any income and gains from abroad are taxable here. 
The idea of being able to close deficits by taking from rich people is so far removed from reality that it really baffles me how little people understand about how much governments are overspending!


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## Complainer (30 Jul 2012)

I'd be first to admit that I don't know much about wealth taxes, but you have made a convincing argument for rationalising these taxes across Europe and the developed world. There are good reasons why the Russian and Indian millionaires live in UK or the US etc. They prefer it to living in their home countries. There is indeed a tipping point that will push many of them away, but there is also room to get some kind of tax revenue here without reaching tipping point for most of these folk.

In relation to CGT, your analysis is very superficial. Your 'undeniable truth' does not show cause and effect. Look at what else was happening in the world. Was the increase in overall income due to the drop in rates or to market recoveries, or was it due to people taking the opportunity to cash in gains on the expectation that rates may well go back up again. Is it due to the movement in the rate rather than the absolute level of the rate.

Perhaps we live in different worlds Chris. 'Average Joe's in my world don't invest in equities, at home or abroad.


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## Purple (31 Jul 2012)

Complainer said:


> Perhaps we live in different worlds Chris. 'Average Joe's in my world don't invest in equities, at home or abroad.


Given your location I suspect that many of the average joe's in your world have a pension and therefore have invested in equities, at home and abroad.
I'd also suggest that many retired people invest their lump-sum. That would also go into equities at home and abroad.


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## Chris (31 Jul 2012)

Complainer said:


> I'd be first to admit that I don't know much about wealth taxes, but you have made a convincing argument for rationalising these taxes across Europe and the developed world. There are good reasons why the Russian and Indian millionaires live in UK or the US etc. They prefer it to living in their home countries. There is indeed a tipping point that will push many of them away, but there is also room to get some kind of tax revenue here without reaching tipping point for most of these folk.


Complainer, your posts on this thread simply highlight the problem with people advocating higher taxes on rich people to solve the fiscal mess. You are constantly making assumptions and claims to desparately support your beliefs that either do not stand up to fact or are based on completely false premises.
When it is pointed out that taxing even 100% of the income away from wealthy people is not enough to solve the problem you point to taxing their actual wealth. When it is pointed out that taxing their assets away is (a) not enough to plug the whole in public finances, and (b) would drive away those wealthy people you conclude that having a small wealth tax would not drive them away. But this again ignores the fact that even a small enough percentage of a tax taken on wealth will not plug the deficit!
You also claim that the likes of Laksmi Mittall , Usmanov and Abramovich live in the UK because they like living there compared to their home countries. This completely ignores the fact that they have non-domiciled status where only their UK based income is liable to UK income tax, not their foreign income and that they can use tax schemes like Carr does. These people could just as easily move to Monaco and pay 0% CGT, 0% wealth tax and 0% income tax; and there are plenty of other places where they can do the same. 
The big problem with finding that tipping point for a wealth tax you allude to, is that once you find it, it is too late. But of course it is a lot more convenient to believe that you can take from rich people and (a) solve the budget problems and (b) not cause a reduction in revenue.



Complainer said:


> In relation to CGT, your analysis is very superficial. Your 'undeniable truth' does not show cause and effect. Look at what else was happening in the world. Was the increase in overall income due to the drop in rates or to market recoveries, or was it due to people taking the opportunity to cash in gains on the expectation that rates may well go back up again. Is it due to the movement in the rate rather than the absolute level of the rate.


My analysis is not superficial at all but you are actually on to something in this statement. It is absolutely about the direction of movement in rates, and it is absolutely about people cashing in gains when taxes are down. You do realise that you are making my point here. When taxes go down less people try to legally avoid (e.g. by not selling gains) or illegally evade them. Another measured side effect when CGT was lowered was that more people invested, which is also a good thing.
But the 2003 CGT cut is not an isolated example, the same thing happened in 1981 when Reagan cut the tax, and also when Clinton cut it in 1996. When Reagan increased the rate in 1986 again, CGT revenue fell over the following years. Again, if you are going to claim a lack of cause and effect, at least do some research into the matter.



Complainer said:


> Perhaps we live in different worlds Chris. 'Average Joe's in my world don't invest in equities, at home or abroad.


Purple has already commented on your claim about average Joes not investing. Anyone with a PRSA has a selection of funds where the choices include Irish, European, Asian, US equities. I am surrounded by average Joes and 80% of them have a private pension, that is the real world, whether you like it or not.


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## PaddyW (31 Jul 2012)

I must agree with Chris, I'm an average Joe and I have a private pension which invests in equities around the world.


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## Complainer (31 Jul 2012)

Chris said:


> When it is pointed out that taxing even 100% of the income away from wealthy people is not enough to solve the problem you point to taxing their actual wealth. When it is pointed out that taxing their assets away is (a) not enough to plug the whole in public finances, and (b) would drive away those wealthy people you conclude that having a small wealth tax would not drive them away. But this again ignores the fact that even a small enough percentage of a tax taken on wealth will not plug the deficit!


I don't quite get your logic that because any wealth tax would not 'plug the hole', it is therefore not worth doing. I doubt if any individual tax will 'plug the hole', but that doesn't mean they are not worth doing. Every little helps, as they say.


Chris said:


> You also claim that the likes of Laksmi Mittall , Usmanov and Abramovich live in the UK because they like living there compared to their home countries. This completely ignores the fact that they have non-domiciled status where only their UK based income is liable to UK income tax, not their foreign income and that they can use tax schemes like Carr does. These people could just as easily move to Monaco and pay 0% CGT, 0% wealth tax and 0% income tax; and there are plenty of other places where they can do the same.
> The big problem with finding that tipping point for a wealth tax you allude to, is that once you find it, it is too late. But of course it is a lot more convenient to believe that you can take from rich people and (a) solve the budget problems and (b) not cause a reduction in revenue.


And as I said earlier, the solution to this problem is for developing countries to come together and a common wealth tax, so these guys have nowhere to hide, or nowhere decent to hide, to be more specific. I'm sure you and others will continue to scaremonger to avoid any possibility of such taxes, but it's time to call some bluffs.



Chris said:


> My analysis is not superficial at all but you are actually on to something in this statement. It is absolutely about the direction of movement in rates, and it is absolutely about people cashing in gains when taxes are down. You do realise that you are making my point here. When taxes go down less people try to legally avoid (e.g. by not selling gains) or illegally evade them. Another measured side effect when CGT was lowered was that more people invested, which is also a good thing.


So the solution here is to avoid these reactionary drops in rates, so people stop playing the tax system and concentrate on investing. Let them cash in their gains when most appropriate for them, not based on temporary changes in tax rates.



Chris said:


> Anyone with a PRSA has a selection of funds where the choices include Irish, European, Asian, US equities. I am surrounded by average Joes and 80% of them have a private pension, that is the real world, whether you like it or not.


I wasn't thinking about pensions when I made my point about average Joes, and I really don't think you were either. You are correct, in that lots of people with pensions are invested in equities. The proportion of these who make active investment decisions about where to invest is fairly low. Most people go along with whatever defaults the fund investment managers suggest. The substantive point remains - the more money you have, the easier it is for you to spend or invest it overseas, rather than in Ireland.


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## Purple (1 Aug 2012)

Complainer is making the point that a Wealth Tax is desirable from a moral point of view. That's a perfectly valid position to take though I disagree. 
Chris is arguing against it from a logical and economic perspective. Also a valid point of view. But one doesn't counter the other.
Complainer is a socialist and so his views will be coloured by that doctrine, it's a bit like a fundamentalist Christian discussing evolution; he may understand the science (or economics in this case) but he drew a conclusion before he was presented with the evidence and so will look at the evidence selectively and take from it what supports his preconceptions.
There’s nothing fundamentally wrong with socialism in its present watered down form but it does ignore economic reality in order to support its preconceptions and so, ironically, it traps people in poverty.


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## T McGibney (1 Aug 2012)

Purple said:


> There’s nothing fundamentally wrong with socialism in its present watered down form


For the record, I disagree...


Purple said:


> ...but it does ignore economic reality in order to  support its preconceptions and so, ironically, it traps people in  poverty.



... for this precise reason.


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## Purple (1 Aug 2012)

T McGibney said:


> For the record, I disagree...



Yea, but look at the social reforms and advances in equality in Ireland and Europe over the last 40 years. Just about all of them have been driven by leftwing parties. Even in this country the Labour Party in government has an excellent record on social reform. That has to count for something. (Though it was a FF minister that de-criminalised homosexuality).


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## Chris (31 Aug 2012)

Been away and busy for a while, but I do want to revisit this discussion.



Complainer said:


> I don't quite get your logic that because any wealth tax would not 'plug the hole', it is therefore not worth doing. I doubt if any individual tax will 'plug the hole', but that doesn't mean they are not worth doing. Every little helps, as they say.


As Purple summarizes well, our differences in opinion here are fundamental. My logic is that there is a huge focus on taxing "the rich" as a solution to all problems. Obama is probably the worst politician for constantly regurgitating the idea that all that needs to be done is take more money from the rich, give it port and middle class people and then everything will be fixed, including the deficit. The slightest bit of economic scrutiny proves this completely illusionary. 
Some countries, like Ireland and the UK, are talking about austerity and reducing spending but there have been no net spending cuts. All we have had is new and increased taxes but no reduction in total government spending and no economic recovery.
The logical reason that a wealth tax is not worth doing is that it will encourage wealthy people to leave, rather than attract wealthy people to come here. In the very short term there may be a boost to revenue, but that quickly reverses.
You say that "every little helps", but I think we are beyond a stage where little amounts will make any difference. We don't need haircuts to spending we need amputations and we want high income earners to come here, not leave.



Complainer said:


> And as I said earlier, the solution to this problem is for developing countries to come together and a common wealth tax, so these guys have nowhere to hide, or nowhere decent to hide, to be more specific. I'm sure you and others will continue to scaremonger to avoid any possibility of such taxes, but it's time to call some bluffs.


Do you honestly think that you will be able to convince Monaco to not be a tax haven. Or what about the countless Caribbean countries? It is wishful thinking to believe that a concerted effort by all modern western countries can be achieved to introduce a tax that would do long term harm.



Complainer said:


> So the solution here is to avoid these reactionary drops in rates, so people stop playing the tax system and concentrate on investing. Let them cash in their gains when most appropriate for them, not based on temporary changes in tax rates.


You make a very good point here. Investors should be driven in their actions by factors surrounding the countries, industries and companies they invest in. But at high tax rates they are less likely to cash in and move investments around. In economic terms this is referred to as regime uncertainty and creates havoc for businesses and investors in their attempts to make predictions about the future.
Drop tax rates and leave them there is the solution.



Complainer said:


> I wasn't thinking about pensions when I made my point about average Joes, and I really don't think you were either. You are correct, in that lots of people with pensions are invested in equities. The proportion of these who make active investment decisions about where to invest is fairly low. Most people go along with whatever defaults the fund investment managers suggest. The substantive point remains - the more money you have, the easier it is for you to spend or invest it overseas, rather than in Ireland.


I know you weren't thinking about pensions, that is why t was pointed out. And I disagree with your premise that people just simply go with a fund that is suggested to them and don't actively make decisions. Every company that I have worked for has had annual meetings with pension brokers who give an overview of a whole host of investment funds available and what their risks are. People do care about this and if they don't they are being very foolish and cavalier with their money. It is just as easy for someone with a PRSA to have all the money go into non-Irish or non-European funds, no more difficult than for a rich person.



Purple said:


> Complainer is making the point that a Wealth Tax is desirable from a moral point of view. That's a perfectly valid position to take though I disagree.
> Chris is arguing against it from a logical and economic perspective. Also a valid point of view. But one doesn't counter the other.
> Complainer is a socialist and so his views will be coloured by that doctrine, it's a bit like a fundamentalist Christian discussing evolution; he may understand the science (or economics in this case) but he drew a conclusion before he was presented with the evidence and so will look at the evidence selectively and take from it what supports his preconceptions.
> There’s nothing fundamentally wrong with socialism in its present watered down form but it does ignore economic reality in order to support its preconceptions and so, ironically, it traps people in poverty.


Well summarized, but...



T McGibney said:


> For the record, I disagree...
> 
> 
> ... for this precise reason.


...I agree with this. To slightly rephrase a quote from Lawrence Reed, "All that socialism has done for the poor is make sure that they have plenty of company."



Purple said:


> Yea, but look at the social reforms and advances in equality in Ireland and Europe over the last 40 years. Just about all of them have been driven by leftwing parties. Even in this country the Labour Party in government has an excellent record on social reform. That has to count for something. (Though it was a FF minister that de-criminalised homosexuality).


This I agree with; as a libertarian I find myself very often agreeing with left leaning and socialist politicians over matters of gay marriage, abortion, etc. Only two days ago I heard an interview with Ming Flanagan (someone I disagree with almost every time he speaks) on News Talk make one of the best and precise arguments for the legalization of Marihuana.


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## Complainer (31 Aug 2012)

Chris said:


> My logic is that there is a huge focus on taxing "the rich" as a solution to all problems. Obama is probably the worst politician for constantly regurgitating the idea that all that needs to be done is take more money from the rich, give it port and middle class people and then everything will be fixed, including the deficit. The slightest bit of economic scrutiny proves this completely illusionary.
> Some countries, like Ireland and the UK, are talking about austerity and reducing spending but there have been no net spending cuts. All we have had is new and increased taxes but no reduction in total government spending and no economic recovery.


I don't follow US politics much, but you're wrong to say that there is 'huge focus on taxing the rich' here in Ireland. It actually gets very little coverage, and very little media. It certainly gets very little time in any serious political debates. 

No-one is suggesting that it is the sole solution to our woes. But it is certainly a part of the solution.




Chris said:


> The logical reason that a wealth tax is not worth doing is that it will encourage wealthy people to leave, rather than attract wealthy people to come here. In the very short term there may be a boost to revenue, but that quickly reverses.


That's a fairly simplistic analysis. There are wealthy people who (shock horror, hold onto your seat) believe that they should be paying more tax, not less - 68% of millionaires in one US survey supported additional taxes - see http://blogs.wsj.com/wealth/2011/10/27/most-millionaires-support-warren-buffetts-tax-on-the-rich/




Chris said:


> You say that "every little helps", but I think we are beyond a stage where little amounts will make any difference. We don't need haircuts to spending we need amputations and we want high income earners to come here, not leave.


We certainly have a huge financial gap to close, but every little does indeed help to close this gap. We certainly want people who will spend, and generate exports to come here - but you're not a sole spokesperson for that group. There are wealthy, export-generating people who believe they/we should be paying more tax. 



Chris said:


> Do you honestly think that you will be able to convince Monaco to not be a tax haven. Or what about the countless Caribbean countries? It is wishful thinking to believe that a concerted effort by all modern western countries can be achieved to introduce a tax that would do long term harm.


Do you honestly think that you will be able to convince South Africa to eliminate apartheid? Do you honestly think that you will be able to convince Myanmar to free Aung San Suu Kyi? Do you honestly think that you will be able to persaude Switzerland to stop laundering mafia money, and al-queda money? Oh right - we've already done the unthinkable, and we can do it again, if we really want.



Chris said:


> You make a very good point here. Investors should be driven in their actions by factors surrounding the countries, industries and companies they invest in. But at high tax rates they are less likely to cash in and move investments around. In economic terms this is referred to as regime uncertainty and creates havoc for businesses and investors in their attempts to make predictions about the future.
> Drop tax rates and leave them there is the solution.


Or raise the rates, and commit to keeping them high - remove all that nasty uncertainty, and let people run their businesses and investments based on real reasons, not on tax reasons.



Chris said:


> I know you weren't thinking about pensions, that is why t was pointed out. And I disagree with your premise that people just simply go with a fund that is suggested to them and don't actively make decisions. Every company that I have worked for has had annual meetings with pension brokers who give an overview of a whole host of investment funds available and what their risks are. People do care about this and if they don't they are being very foolish and cavalier with their money. It is just as easy for someone with a PRSA to have all the money go into non-Irish or non-European funds, no more difficult than for a rich person.


I've been at those annual meetings, and most people come out of the meetings going 'I dunno really' and follow some default recommendation from the fund manager (who will be working hard to avoid any hard questions about the value returned for his commission compared to 'buy the index' strategy.


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## Chris (4 Sep 2012)

Complainer said:


> I don't follow US politics much, but you're wrong to say that there is 'huge focus on taxing the rich' here in Ireland. It actually gets very little coverage, and very little media. It certainly gets very little time in any serious political debates.


Yes there is the same focus here and it has already been done with marginal rates of taxation up to 53% and capital gains taxes up to 30%. There was huge debate about how the deficit would be fixed and how much would come from "cuts" and how much from increased taxes during the last election. Election campaigns hardly fall outside the category of "serious political debates".



Complainer said:


> No-one is suggesting that it is the sole solution to our woes. But it is certainly a part of the solution.


As I already stated, the loudest advocates of taxing the rich are putting it forward as the solution of all solutions. You are also ignoring the fact that taxing the rich will bring in more money in the short term but less in the long term, which will exacerbate the problem. When there is less money for investment in private business there are less jobs created, it is as simple as that.



Complainer said:


> That's a fairly simplistic analysis. There are wealthy people who (shock horror, hold onto your seat) believe that they should be paying more tax, not less - 68% of millionaires in one US survey supported additional taxes - see http://blogs.wsj.com/wealth/2011/10/27/most-millionaires-support-warren-buffetts-tax-on-the-rich/


No it is not simplistic analysis, what is simplistic is for you to not actually take a closer look at the survey and what those 68% are proposing:


> A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income.


You can have $1 million in assets and have a far lower income than $1 million per year. What this survey has achieved is asking those who would not be affected by the higher tax if they would be in favour of it. The survey is flawed from the outset. The results would be totally different if they had only asked those with income above $1 million that would actually be affected.
Buffet is as much a hypocrite as Bono, especially when it comes to the dishonesty over his actual rate of taxation: [broken link removed]
I know, very inconvenient when the truth comes out and blows holes in flawed theories.



Complainer said:


> We certainly have a huge financial gap to close, but every little does indeed help to close this gap. We certainly want people who will spend, and generate exports to come here - but you're not a sole spokesperson for that group. There are wealthy, export-generating people who believe they/we should be paying more tax.


Then why don't they send a cheque to the revenue if they feel so passionately about it? The answer is that it is all just talk by a few people who are looking for a better image and who would not be affected by the taxes they are advocating. The same people hire tax advisors for their business and personal interests to reduce taxes as much as is possible, but they then advocate higher taxation.



Complainer said:


> Do you honestly think that you will be able to convince South Africa to eliminate apartheid? Do you honestly think that you will be able to convince Myanmar to free Aung San Suu Kyi? Do you honestly think that you will be able to persuade Switzerland to stop laundering mafia money, and al-queda money? Oh right - we've already done the unthinkable, and we can do it again, if we really want.


Your analogies are completely in reverse, taking ever more money from wealthy people who made their money by other people voluntarily buying their goods and services is immoral and damaging to the economy and a few countries understand this and take advantage of it. Your question should be whether you could/should convince SA to reintroduce apartheid, or Burma to imprison San Suu Kyi again.
You are also not advocating that one country change one policy, you are saying that all countries should introduce a wealth tax of some kind so that rich people have no way of avoiding it. Do you honestly believe that is achievable? Achievable in any time frame that will actually avoid the looming train wreck?
We are in a car heading towards a cliff in thick fog. You don't slow down the car, you stop it immediately. And to clarify, by we I mean Europe and North America, Ireland has already found the cliff.



Complainer said:


> Or raise the rates, and commit to keeping them high - remove all that nasty uncertainty, and let people run their businesses and investments based on real reasons, not on tax reasons.


Truly amazing, you are contradicting yourself within two lines of text. Why do you think rich people would be inclined to invest more if the tax rates were increased more? Why would a business person or investor take on the same risk, but enjoy less of the reward? Taxes have the exact opposite effect to what you are suggesting; they increase uncertainty and reduce the incentive to invest!



Complainer said:


> I've been at those annual meetings, and most people come out of the meetings going 'I dunno really' and follow some default recommendation from the fund manager (who will be working hard to avoid any hard questions about the value returned for his commission compared to 'buy the index' strategy.


The point is that it is just as easy for an average Joe to invest their entire pension outside the country as it is for a rich person to do so. Whether they do so or not is up to them.


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## Firefly (7 Sep 2012)

Complainer said:


> We certainly have a huge financial gap to close, but every little does indeed help to close this gap.




Let's say for a minute that we did "tax the rich". And let us also imagine that this had no negative consequences, ie the rich don the green jersey and suck it up for the good of the country, by paying this tax and not moving any assets off-shore. Heck, any "rich" investors and business people contemplating expanding their businesses or opening new ones carry on as normal.

 2 simple questions if I may:

1. Roughly how much extra tax income do you think would be generated annually? Anything over 2bn a year and I'd like something to back this up.

2. Where will the balance come from to meet our 15bn+ annual deficit?

Firefly.


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## Firefly (12 Sep 2012)

Complainer said:


> Or raise the rates, and commit to keeping them high - remove all that nasty uncertainty, and let people run their businesses and investments based on real reasons, not on tax reasons.


 
Not working out to well in France at the moment is it?

http://www.ft.com/cms/s/0/21c53a2e-fc30-11e1-aef9-00144feabdc0.html#axzz26EuTEEp3

“There is a real growing feeling that ‘the rich’ are being hunted down in France at the moment,” said Bernard Grinspan, managing partner of the Paris office of Gibson Dunn, the law firm. “They are being stigmatised and this is encouraged from the top. A number of people left before the election and more since, especially people in the private equity world. Entrepreneurs are very worried.”


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## Chris (13 Sep 2012)

Firefly said:


> Not working out to well in France at the moment is it?
> 
> http://www.ft.com/cms/s/0/21c53a2e-fc30-11e1-aef9-00144feabdc0.html#axzz26EuTEEp3
> 
> “There is a real growing feeling that ‘the rich’ are being hunted down in France at the moment,” said Bernard Grinspan, managing partner of the Paris office of Gibson Dunn, the law firm. “They are being stigmatised and this is encouraged from the top. A number of people left before the election and more since, especially people in the private equity world. Entrepreneurs are very worried.”



So much for all those rich people in favour of higher taxes. It is morally disturbing to think that the French government want to take 75% of somone's income and then on top of that and them for 19% in VAT when they spend their remaining 25%. That's an 80% rate of tax!


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## Firefly (13 Sep 2012)

Chris said:


> So much for all those rich people in favour of higher taxes. *It is morally disturbing to think that the French government want to take 75% of somone's income and then on top of that and them for 19% in VAT when they spend their remaining 25%. That's an 80% rate of tax!*


 
Shure haven't they loads of money


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## circle (13 Sep 2012)

Purple said:


> Yea, but look at the social reforms and advances in equality in Ireland and Europe over the last 40 years. Just about all of them have been driven by leftwing parties. Even in this country the Labour Party in government has an excellent record on social reform. That has to count for something. (Though it was a FF minister that de-criminalised homosexuality).


 
Two independent senators more affiliated with Labour than FF did somewhat force Máire GQ's hand by bringing the case to the ECHR.

In fairness Labour usually deliver social change in coalition with FG, for example both Divorce Referenda were under FG/Lab.


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## Purple (14 Sep 2012)

circle said:


> Two independent senators more affiliated with Labour than FF did somewhat force Máire GQ's hand by bringing the case to the ECHR.
> 
> In fairness Labour usually deliver social change in coalition with FG, for example both Divorce Referenda were under FG/Lab.



Can you post some detail please?


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