# "Soaking the rich, again"



## Brendan Burgess (12 Jan 2016)

Good article in the Sunday Times by Cormac Lucey 

http://cormaclucey.blogspot.ie/2016/01/soaking-rich-again.html

Now that the recession is over, you may have thought that tax increases are a thing of the past and that the happy days are here again — but you would be wrong. Two weeks ago, _The Sunday Times_ reported that Fine Gael and the Labour party are planning to introduce new taxes for people earning more than €100,000 a year.

Fine Gael is also proposing new taxes for the better off, despite research from the Economic and Social Research Institute showing that it was those higher earners who had lost the most income during the austerity budgets after 2009.

A key factor behind this plan is that Fine Gael faces no real political competition on its right flank. It wouldn’t have been so politically careless in the past when the Progressive Democrats existed, and it wouldn’t be so politically careless now if it took Renua seriously


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## 44brendan (12 Jan 2016)

What I don't understand here is the categorizing of a single income of €100,000 as being in the "rich" bracket. In effect therefore a couple with 3/4 children and 1 earner at 100k is supposed to be significantly better off than a couple with 2 earners at 70K each and no kids, or even a single person on 70K! Surely this is myopic and unfair on many couples in the former category!!


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## Brendan Burgess (12 Jan 2016)

Hi 44

When politicians throw out ideas like "a tax on people earning over €100k" , they don't worry about the details of joint assessment. 

Do they mean a couple earning €50k each?  Do they mean a single person earning €100k?  

But the thing which annoys me most is that no party is actually calling for a reduction in the very high taxes paid by higher earners and an increase in taxes paid by the lower earners. The imbalanced system we have can't last.

Brendan


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## 44brendan (12 Jan 2016)

Realistically FG see their core vote as being currently in the middle income bracket. They are not an attractive party to the lower earners and would like to gain more votes from that sector.
SF & Socialist parties are attracting votes by targeting the rich! Realistically a political strategy would be to maintain satisfaction with the cohort of middle/low income earners and potentially increase their vote from this area. An attack on the "high earners" will not lose them many votes and imbalance & fairness is certainly the last thing on their minds.


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## Steven Barrett (12 Jan 2016)

And your reward for getting the required qualifications, working hard and getting a good job...we're going to tax you more!!! 

Talk about an incentive. 

We should be rewarding people for doing well, not punishing them. 


Steven
www.bluewaterfp.ie


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## Gordon Gekko (12 Jan 2016)

It is difficult to quantify the cost to the economy when a "high earner" says "why would I bother doing that for 45% of the upside". 

The concept of ending up with a minority share of the reward for your endeavour is ridiculous.

And in any event someone on €100k isn't "wealthy". Nevermind the fact that this governmemt deem someone on €70k or more to be a "high earner".


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## Delboy (12 Jan 2016)

And so many folk say FG are the Irish right wing party!!! No, they're just another collection of Rural school teachers, SthDub professionals etc who's Grand-daddies supported  Collins back in the day.

Tomorrow's papers will contain stories of FG bemoaning the fact that so many Irish won't come back home because of high taxes


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## seamus m (12 Jan 2016)

Its the farmers they look to protect no mention of taxing single farm payments to the rich farmer ,years of reps before that , animal subsidies before that stud farmers and horse breeding tax free probably some of the wealtiest in our society .Its a joke


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## Sophrosyne (13 Jan 2016)

Gordon Gekko said:


> It is difficult to quantify the cost to the economy when a "high earner" says "why would I bother doing that for 45% of the upside".



It very much depends on where you work and your area of expertise. In certain circumstances, "not bothering" might lose you your job.


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## Gordon Gekko (13 Jan 2016)

Sophrosyne said:


> It very much depends on where you work and your area of expertise. In certain circumstances, "not bothering" might lose you your job.



Of course, but "high earners" tend not be sacked and there is nuance to "not bothering" in this context. For example, partners in a firm not bothering to open up a new revenue stream, or a medical consultant choosing to close his practice because "what's the point for 45%?".


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## Jon Snow (13 Jan 2016)

seamus m said:


> Its the farmers they look to protect no mention of taxing single farm payments to the rich farmer ,years of reps before that , animal subsidies before that stud farmers and horse breeding tax free probably some of the wealtiest in our society .Its a joke



Without exception all of the items you've listed there are taxable now - some have always been, and the bloodstock exemption has been gone for 8 years at this stage.

No doubt there are some quite wealthy farmers but there are also far more who are doing well to make the average industrial wage, and need to find off-farm work to sustain themselves.


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## seamus m (13 Jan 2016)

Jon my mistake and tell me this would the published figure for single farm payments anywhere up to 300000 from what I read be before or after tax.


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## odyssey06 (13 Jan 2016)

I'll be voting Renua... not saying their policies are perfect or ************************* or I even agree with all of them, but they seem to be the only party that are genuinely pro-enterprise  and think that people are entitled to the fruits of their work... as opposed to FG, whose view of it is a begrudging goose that lays the golden egg, how much can we shake them down for etc


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## 44brendan (13 Jan 2016)

seamus m said:


> Jon my mistake and tell me this would the published figure for single farm payments anywhere up to 300000 from what I read be before or after tax.


SFP's are paid gross but are assessed as a normal part of a farmers income. Yes, many farmers are paper rich in terms of land value but the vast majority are still existing on a low income level and putting in a heavy workload just to achieve that. I'm not a farmer but I deal with them regularly in my business and I appreciate the work & expertise put in by them compared to many on higher incomes.
Jon Snows's comment fully reflect the current tax position of farmers. They are taxed broadly comparatively with all other business owners.


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## T McGibney (13 Jan 2016)

Single farm payments and their predecessors have always been taxable. End of.


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## Brendan Burgess (15 Jan 2016)

*FG plans new tax on income over €100k after USC abolition*


"Fine Gael will introduce a new income levy on workers earning more than €100,000 after it abolishes the Universal Social Charge, the Irish Independent can reveal."


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## Delboy (15 Jan 2016)

I thought FG were always on saying that Execs in MNCs were being put off from coming here because of the high taxes on those earning over 80k or so, and that FG would fix this!


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## Brendan Burgess (15 Jan 2016)

Maybe the problem is attracting those earning between 80k and 100k and not those earning over 100k? 

Brendan


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## Gerry Canning (15 Jan 2016)

It,s too glib to say k100 =rich .
If you have  k100 and no mortgage + no kids , you are rich.
If you have K100 and mortgage + 3 kids , you survive.

Anyone on k100 is 3 times the average wage ,so they are close to rich.

This whole (Tax the Rich) is a lazy conscript.
Soaking the Rich ,ain,t much better.

Usually the thread runs round what, farmers get, social welfare get , civil servants get etc.
Over the years I contend most things balance out  and most of the obvious unfairness get sorted in their electoral turn.

Maybe lets agree k150 = rich ? , so lets Soak them a bit ?


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## odyssey06 (15 Jan 2016)

It's almost as if our politicians don't understand the concepts of percentages, and don't realise that 40% of €120,000 is greater than 40% of €90,000...


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## 44brendan (15 Jan 2016)

To be fair the headline grabber "Soaking the Rich" is a bit unfair. The actual context of this is in respect of the proposed elimination of USC. FG are rowing back on this somewhat by retaining a small additional tax charge on those earning over 100K. It seems reasonably equitable in that it will only apply to excess earnings >100K and be below the existing 8% USC rate!


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## Delboy (15 Jan 2016)

Gerry Canning said:


> Maybe lets agree k150 = rich ? , so lets Soak them a bit ?


Not enough of them to make a difference, other than as a Political point score


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## Purple (18 Jan 2016)

Gerry Canning said:


> Maybe lets agree k150 = rich ? , so lets Soak them a bit ?


 They are already being soaked a lot. If we want to soak them a bit then we'll have to reduce the amount of tax they pay.


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## Gerry Canning (18 Jan 2016)

Purple said:


> They are already being soaked a lot. If we want to soak them a bit then we'll have to reduce the amount of tax they pay.



In the (fudge) of statistics , it seems that the (richer) are getting (richer) a lot faster than Joe Soap.
If that is true , at what point do we decide there is a divide that is too large?

The (richer) hold the levers of power and (if ) too rich ,would we end up with a rich cohort and then the plebs? (USA seems to be heading that way).

Just asking?


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## T McGibney (18 Jan 2016)

Gerry Canning said:


> In the (fudge) of statistics , it seems that the (richer) are getting (richer) a lot faster than Joe Soap.
> If that is true , at what point do we decide there is a divide that is too large?
> 
> The (richer) hold the levers of power and (if ) too rich ,would we end up with a rich cohort and then the plebs? (USA seems to be heading that way).
> ...



You're referring to the Oxfam report, Gerry? Hold your fire, it's nonsense. A typical US (or Irish) family with functioning mortgage & other debt is *not *poorer than a typical debt-free Eritrean small farmer, as Oxfam assume.


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## Gerry Canning (18 Jan 2016)

T Mc Gibney,

I wasn,t referring to Oxfam report .

It does appear that the balance in income is being skewed too much in favour (not of the rich on sayK200) but on the super -super rich.
The super-super rich used to be those who owned Land and controlled tenants etc, eventually the plebs revolted; now the super-super rich have different levers but I suggest no less greedy ?
Even in our own mess , the super-super rich were not watched ? and believed their own entitlements. We all paid a price..

There does appear to be too large a disparity twix super rich and wealth spread?
It can,t be a positive sign , can it?


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## T McGibney (18 Jan 2016)

The problem is that it's so easy to distort the statistics and this is being done wholesale at the moment to feed the politically-motivated "income equality" agenda. http://www.iea.org.uk/blog/beware-oxfam’s-dodgy-statistics-on-wealth-inequality

Even in this discussion, the repeated mixing-up of income and wealth is very misleading. George Best earned huge income for years, but lived miserably and ended destitute. http://www.telegraph.co.uk/finance/...ad-died-I-ate-beans-for-Christmas-dinner.html


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## Deiseblue (18 Jan 2016)

George Best is a poor example to be fair , Best did not earn huge amounts.
This was an era before agents , sky tv money & the spread of the game from pretty much a working class base & of course Georgie was never transferred so as such did not benefit from signing on fees , a portion of the transfer fee etc. added to the fact that he was managed for most of his career by the famously parsimonious Sir Matt Busby .
It is telling that John Giles who played in the same era said on the Ray Darcy show on Saturday that the most he earned in one year was £10,000 & that was playing in a far more successful team than Georgie.
Good money granted at the time but certainly not huge !


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## Brendan Burgess (18 Jan 2016)

T McGibney said:


> The problem is that it's so easy to distort the statistics and this is being done wholesale at the moment to feed the politically-motivated "income equality" agenda. http://www.iea.org.uk/blog/beware-oxfam’s-dodgy-statistics-on-wealth-inequality



Yeah, I heard RTE report that the top 1% own more than the rest of us combined...

But to get into the top 1%, you need around €700k in assets, so that is a lot of people in Ireland.

I don't know the stats, but I imagine that most of Ireland's population fall into the top 10% of wealth worldwide.Anyone with a bit of equity in their house and any sort of pension fund would be unbelievably wealthy by the standards of the majority of the World's population. 

Of course, because of the huge amount of negative net wealth in Ireland, we also have our share of the poorest. The people who have no assets, but no debts either, are not the poorest. 

Brendan


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## T McGibney (18 Jan 2016)

Deiseblue said:


> George Best is a poor example to be fair , Best did not earn huge amounts.
> This was an era before agents , sky tv money & the spread of the game from pretty much a working class base & of course Georgie was never transferred so as such did not benefit from signing on fees , a portion of the transfer fee etc. added to the fact that he was managed for most of his career by the famously parsimonious Sir Matt Busby .
> It is telling that John Giles who played in the same era said on the Ray Darcy show on Saturday that the most he earned in one year was £10,000 & that was playing in a far more successful team than Georgie.
> Good money granted at the time but certainly not huge !



Best earned millions but was never rich.  "I spent a lot of money on booze, birds and fast cars. The rest I just squandered."


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## Fella (18 Jan 2016)

I remember reading somewhere that if you redistributed all the money in the world and shared it equally with everyone then within a couple of years the same wealth divide that existed before hand would return , most people are poor for a reason and vice versa. That's life , tax them all you want they will move or do whatever it takes to maintain/increase wealth , I don't think the wealthy should be overly taxed , I think they should be applauded, most poor people think wealthy should be taxed more because they don't understand anything about money in first place thats why they are poor. Harsh but true.


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## Deiseblue (18 Jan 2016)

George's career as a top class footballer ended at age 27 , he then was sporadically employed as a footballer for hire - I actually saw him play in his pomp & also for Shels !
He earned some money outside the game for endorsing products including a well remembered ad for Cookstown sausages & by flogging stories about his various travails to the press & in latter years by appearing on the speaking circuit.
The reality is that sadly he made a good but not excessive living from the game over a short career , it should be noted that Calum Best was born in 1981 when George was 35  &  his best years both earning wise and as  a footballer were over & given George's spiralling drink problem was lucky to get beans for Christmas dinner - the good times did not arrive for footballers until the 90's when John Barnes became the highest paid player at £10,000 a week.                   Of course George squandered his money but the reality is that he did not have excessive amounts to squander.


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## T McGibney (18 Jan 2016)

I used Best merely as an example but there are many more who earned way, way more than €75k/€100k p/a and never actually became "rich", or if so only for a very short time. Just as there are many rich people who have never earned €75k and never will.


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## Gordon Gekko (18 Jan 2016)

A couple earning €100k between them are absolutely in the squeezed middle. Rent/mortgage, childcare, etc.

They are not "rich".

I know plenty of people who live month to month and the tabloid headline would be that they are "rich".


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## Gerry Canning (18 Jan 2016)

I think we agree that the word (RICH) means little in isolation.
I think we agree that the nominal rich ie over k100 are not rich/wealthly in any meaningful way.

I think we have 3 camps ,
The under k100 who mistakingly  believe that k100 = rich & wealthy .
The k100 people  who work hard to provide for their families ,who by no means can be called wealthy.

Those who inherited wealth by virtue of birth .
Am inclined to believe these inheritors should be (soaked) ( its the pinkie in me !)


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## Purple (18 Jan 2016)

Gerry Canning said:


> I think we agree that the word (RICH) means little in isolation.
> I think we agree that the nominal rich ie over k100 are not rich/wealthly in any meaningful way.
> 
> I think we have 3 camps ,
> ...


I made the argument here before for high inheritance taxes and low income taxes and I was castigated.


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## T McGibney (18 Jan 2016)

You won't make much of a dent in the personal tax burden by jacking up inheritance and gift taxes, as the tax take from the latter is tiny compared to that from personal taxes. In fact, inheritance and gift taxes are already so ruinously high that they are only sustainable by virtue of the various reliefs for businesses, farms and family homes.


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## Purple (18 Jan 2016)

T McGibney said:


> You won't make much of a dent in the personal tax burden by jacking up inheritance and gift taxes, as the tax take from the latter is tiny compared to that from personal taxes. In fact, inheritance and gift taxes are already so ruinously high that they are only sustainable by virtue of the various reliefs for businesses, farms and family homes.


...and that's why I was castigated


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## 44brendan (18 Jan 2016)

Inherited "wealth" in Ireland is extremely low in terms of any perceived tax take from same. The vast majority of inheritances consist of family homes. A few of these may be palatial but are caught by the net 33% CAT rate. An increase on same for "trophy" houses would make no meaningful difference to the tax take. In terms of wealth the bulk of inheritances are business assets (mainly farms). A penal tax on these types of assets would destroy the farming community and many family businesses.

This is really the Sinn Fein/ Joe Higgins type of popularism that there is this large core of wealthy people in Ireland who avoid paying their fair share of taxes by means of shady schemes and cronyism. Unfortunately the reality is that this type of "political rhetoric" is just another opiate for the masses. The perception that "soaking the wealthy" is an alternative to us all paying a fair share of taxes is a myth and as yet no proponent has put forward a verifiable and independent study supporting the contention!


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## Purple (19 Jan 2016)

The Indo had this yesterday peddling the same BS about the top 1% being richer than everyone else.


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## PGF2016 (19 Jan 2016)

Gerry Canning said:


> I think we agree that the word (RICH) means little in isolation.
> I think we agree that the nominal rich ie over k100 are not rich/wealthly in any meaningful way.
> 
> I think we have 3 camps ,
> ...




There's a fourth camp. Those on 100k who live modestly and have no financial worries and consider themselves rich. They don't have 161 Mercs or mansions in D4 but realize how good they have it when they look at the rest of the world.


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## Purple (19 Jan 2016)

PGF2016 said:


> There's a fourth camp. Those on 100k who live modestly and have no financial worries and consider themselves rich. They don't have 161 Mercs or mansions in D4 but realize how good they have it when they look at the rest of the world.


When you look at the rest of the world nearly all of us in Ireland have it good.


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## noproblem (19 Jan 2016)

Hope this is the right place to put this post.
Talking about the 10 or 100 richest people in the world and, let's say they own 99% of the world's total wealth? Suppose they decided to liquidate all of their assets and keep them as cash? No doubt there would be buyers and it would then become impossible to determine those cash rich 100 people for future wealth purposes. I'm guessing there would be a new 100 richest people in the world and on and on and on, etc if they decided to do the same. Does it make any difference at all about having rich people, or who/what they are, etc? There's always going to be one human with more than the next human and vica versa.


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## Sophrosyne (19 Jan 2016)

Could we clarify what we are discussing?

Cormac Lucey’s article is based on a report, 2 weeks earlier in the Sunday Times that mentioned that Fine Gael were planning to introduce new taxes for people earning €100,000 or more - though it had not yet decided on the income level.

This is in the context of the abolition of USC.

There is no information about this new tax, although an article in the Irish Independent dated 15 January last suggests that it will be in the form of increased PRSI contributions and that the increase will be considerably less than the current 8% USC rate.


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## Gordon Gekko (19 Jan 2016)

It's all political rhetoric. This group of so called wealthy people have actually borne the brunt of the emergency taxes. Money has been given back to the so called middle income and low income earners. The €70k plus brigade deserve a break also.


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## Sophrosyne (19 Jan 2016)

But there is no tax increase. Everyone will pay less.


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## Gordon Gekko (19 Jan 2016)

Sophrosyne said:


> But there is no tax increase. Everyone will pay less.



Except those on €70k or €100k upwards who will pay the same!


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## Sophrosyne (19 Jan 2016)

How do you reckon that?


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## Gordon Gekko (19 Jan 2016)

Because nothing has happened to either tax or USC for income over €70k!

Tax went down by 1% to 40% and USC went up from 7% to 8%.

That isn't paying less.


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## Sophrosyne (19 Jan 2016)

But the article is not about the 2016 Budget.

It is about the eventual abolition of USC.

Higher earners would have the most to gain when it is abolished.

Fine Gael, if re-elected are proposing a modest increase, probably in PRSI for higher earners. They haven't yet decided who higher earners are.


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## Gordon Gekko (19 Jan 2016)

I am very sceptical about the abolition of the USC for "high earners".


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## Sophrosyne (19 Jan 2016)

Nevertheless, that was the context of the article.


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## Purple (22 Jan 2016)

Sophrosyne said:


> Nevertheless, that was the context of the article.


If they abolish it they will replace it with something else.
There should be no increased in spending or cuts in taxes until we have our public finances back in order and a large decrease in our debt levels. The economy is growing and doesn't need any stimulus.


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## Sophrosyne (22 Jan 2016)

I just referenced the context of the newspaper article, without expressing any opinion on its merit.


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## Purple (22 Jan 2016)

Sophrosyne said:


> I just referenced the context of the newspaper article, without expressing any opinion on its merit.


OK. What's your opinion on its merit?


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## Ravima (24 Jan 2016)

Who are the rich? Anyone who has more than I, therefore I have no problem with taxing the rich!


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## Sophrosyne (24 Jan 2016)

Purple said:


> OK. What's your opinion on its merit?



My opinion is that it was overreaction without adequate information.


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## orka (25 Jan 2016)

Front page of today's Irish Times http://www.irishtimes.com/news/poli...uring-public-spending-over-tax-cuts-1.2508863



> Mr Noonan said the USC abolition would cost €4 billion in gross terms, but this would be offset by a clawback mechanism on salaries over €100,000."



That's going to be quite some clawback mechanism.  Total income of those earning 100K+ in 2013 revenue statistics was about €19B.  108,000 tax cases earning 100K+ so 10.8B of the 19B is 'under 100K' and the balance (8.1B) is from that part of salary above 100K.  So he'll need to get 4B 'clawback mechanism tax' from 8.1B of income - a tax rate of an additional 49% on income over 100K...  [I make that a marginal rate of 100% for PAYE and 104% for the self-employed!]

I hope this has been badly reported - I would be very disappointed in Michael Noonan if that's what he said/implied.  Almost SinnFein-esque in its 'sure we'll just schlep it on to the rich, it'll be grand'.

_[Edited to fixed calcs]_


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## mtk (25 Jan 2016)

renua starting to look more attractive


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## Purple (25 Jan 2016)

mtk said:


> renua starting to look more attractive


I'd like to think so but their 3 strikes and you're our nonsense is a major turn-off.


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## Delboy (25 Jan 2016)

Purple said:


> I'd like to think so but their 3 strikes and you're our nonsense is a major turn-off.


Granted the 3 strikes plan as they set it out seems a bit simple, but in general and if properly planned, I think it would be a great idea.
Yeah, it'll hurt the legal profession, but thats a nice side effect


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