Nation in denial

[TarfHead]

Interesting (to me, anyway) piece by Stephen Collins in Saturday's Irish Times.

[broken link removed]

Excerpt (underlines are my choice)

"The figures on this are quite stark. Just 6 per cent of the workforce earn more than €100,000 a year, yet they contribute 47 per cent of the tax take. The top 1 per cent of earners on €200,000 or over contribute 21 per cent of the total tax take. While people on such large incomes should certainly be asked to pay more in the current national emergency, the exclusion of the bottom 40 per cent of the workforce from the tax net is no longer sustainable.
In this country workers don’t pay any tax, PRSI or the income levy if they earn less than €18,000. By contrast, in Britain all income above €6,860 is subject to income tax at 20 per cent. Most EU countries follow the British example and bring workers into the tax net at a much lower income threshold than in Ireland.
..

Similarly any increase in the basic 20 per cent rate of tax will also provoke outrage but the Government really has no choice in the matter. Every 1 per cent increase in the standard rate will generate an extra €535 million in revenue in a full year, compared to an extra €220 million for every percentage increase in the top rate."

Do Fianna Fail have the political courage to widen the tax net and get more people paying a higher standard rate of tax ? This will infuriate the unions, but, how else can they get a similar amount from the tax base ?

 

[MissRibena]

It's mad Ted! We've spent the last 10 years listening to how people on the minimum wage should be taken out of the tax net, that this was a priorty, yada, yada, yada.

Now, all of a sudden, they act all surprised that low-paid workers are not paying much/any tax and claim that a situation like this is not sustainable! But if it's not sustainable now, how could it ever have been sustainable? Surely sustainable means that it can last through a variety of good and bad times.

Have they forgotten it was all their own idea - a policy that was trumpeted with puffed-out chests? Why did the unions go with it anyway; surely it's worse to be taking money from low-paid people when the country is going belly up than when it's bouyant and there are good chances for upskilling and moving to better paid work.

It's like they have amnesia and are expecting us all to contract it along with them. I know it's expecting too much to ask for some straight talking but for crying out loud, a short-termist view has been taking by most of the world for the last 10 years, it's not like any of us would die of shock at this stage. Why all the BS? More than anything else in this mess, I'm sick of being patronised.

One way or another, the lower paid are going to have to be hit, either with honest-to-goodness band widening (unlikely) or some other sly type tax that will have the same impact and cause even more agro.

 

[Bonafide]

They should have brought in a 3rd low tax rate for low earners in the good old days. Then they would only be raising the rate already in existance and not bringing people into the tax net (who never should have left).

Try my hindsight glasses. 20:20 vision.

 

[Complainer]

Interesting (to me, anyway) piece by Stephen Collins in Saturday's Irish Times.

[broken link removed]

Just in case you thought that Stephen was some kind of independent commentator, you might like to check out his background;

It's mad Ted! We've spent the last 10 years listening to how people on the minimum wage should be taken out of the tax net, that this was a priorty, yada, yada, yada.

Now, all of a sudden, they act all surprised that low-paid workers are not paying much/any tax and claim that a situation like this is not sustainable! But if it's not sustainable now, how could it ever have been sustainable? Surely sustainable means that it can last through a variety of good and bad times.

Indeed, less that six months ago Cowen was boasting of taking people out of the tax net. From

We took 500,000 such workers out of the tax net altogether over the past decade.

More than zero. Many more than zero.

So what is 'many'? Wouldn't it be nice if all our politicians who keep telling us how the private sector has been devastated actually know what this number was?

You and others with this line of thinking need to reconcile the dual nature of the government as both your employer and the taxman.

Like many other employers they have cut the wages of their employees. Some workers in the country aren't going to get hit, some are still getting pay rises. I suggest public sector workers deal with this reality. More power to them, their companies are obviously still doing well and should be commended for their hard work in contributing to the exchequer.

It may be a surprise to you, but I was pretty clear on the fact that my employer was the taxman when I moved from private sector to public sector. I share your 'more power to them' view, as it happens.

This isn't a socialist paradise yet.

Not yet. Wait for the next election...

 

[DublinTexas]

Interesting (to me, anyway) piece by Stephen Collins in Saturday's Irish Times.

[broken link removed]

Excerpt (underlines are my choice)

"The figures on this are quite stark. Just 6 per cent of the workforce earn more than €100,000 a year, yet they contribute 47 per cent of the tax take. The top 1 per cent of earners on €200,000 or over contribute 21 per cent of the total tax take. While people on such large incomes should certainly be asked to pay more in the current national emergency, the exclusion of the bottom 40 per cent of the workforce from the tax net is no longer sustainable.
In this country workers don’t pay any tax, PRSI or the income levy if they earn less than €18,000. By contrast, in Britain all income above €6,860 is subject to income tax at 20 per cent. Most EU countries follow the British example and bring workers into the tax net at a much lower income threshold than in Ireland.
..

Similarly any increase in the basic 20 per cent rate of tax will also provoke outrage but the Government really has no choice in the matter. Every 1 per cent increase in the standard rate will generate an extra €535 million in revenue in a full year, compared to an extra €220 million for every percentage increase in the top rate."

Do Fianna Fail have the political courage to widen the tax net and get more people paying a higher standard rate of tax ? This will infuriate the unions, but, how else can they get a similar amount from the tax base ?

You must put this into real word figures to make it more scary:

about 213822 people are contributing a full of 47 per cent of the tax take.
about 35637 people are contributing a full 21 per cent of the tax take.

If one of the 35637 leaves the state (or pulls a Bono) the state is out of 0.0005 % of it's taxes!

And now they want to rely even more on this group? What if 100 of the 35637 people leave? 0.05% of tax income gone!

Madness.

 

[sunrock]

You must put this into real word figures to make it more scary:

about 213822 people are contributing a full of 47 per cent of the tax take.
about 35637 people are contributing a full 21 per cent of the tax take.

If one of the 35637 leaves the state (or pulls a Bono) the state is out of 0.0005 % of it's taxes!

And now they want to rely even more on this group? What if 100 of the 35637 people leave? 0.05% of tax income gone!

Madness.

NO It will be one less exorbitant salary the government will have to pay. The replacement worker will no doubt be on a lower salary. I f the worker is in the private sector even lower still.
And no I don`t think ,you should worry that these high earners will chuck in their high paid jobs to leave the state.They know which side their bread is buttered on.People who can decide in which country they pay their tax are relatively few and have already made their decision by and large.
Multinational companies of course could leave but there is no danger of their tax being increased.
I see the media touting AUSTRALIA as an option for the irish unemployed but one needs a work permit and as everyone in europe sees australia as an option, I think the oppurtunities will be limited and I wouldn`t advise any irish jobseeker to go there unless for abit of sun and fun.

 

[diarmuidc]

http://www.rte.ie/news/2009/0303/economy.html

Figures from the Department of Finance showed an Exchequer deficit of just over €2bn for the first two months of the year as tax revenues continued to fall.

Puts the pension levy into perspective.

 

[orka]

NO It will be one less exorbitant salary the government will have to pay. The replacement worker will no doubt be on a lower salary. I f the worker is in the private sector even lower still.

This doesn't make any sense - how can a replacement private sector worker earning less and paying less tax be a good thing for government finances?

And no I don`t think ,you should worry that these high earners will chuck in their high paid jobs to leave the state.They know which side their bread is buttered on.People who can decide in which country they pay their tax are relatively few and have already made their decision by and large.

There are some highly paid people who won't move - medical consultants are the stand-out group for me - there's no way they could get the same public pay/private practice set-up they have here. But there are many people who are very mobile - finance professionals for example are often working in global markets anyway so it doesn't really matter where they are located. Many probably would prefer to stay here - but not if they are going to get bent over in being asked to pay really high taxes without meaningful cuts in public spending and a widening of the tax base so there isn't the ridiculous situation (a major anomaly in the EU) where 40% of people pay NO income tax (but still feel entitled to bleat on about 'fair shares').

 

[DublinTexas]

This doesn't make any sense - how can a replacement private sector worker earning less and paying less tax be a good thing for government finances?


There are some highly paid people who won't move - medical consultants are the stand-out group for me - there's no way they could get the same public pay/private practice set-up they have here. But there are many people who are very mobile - finance professionals for example are often working in global markets anyway so it doesn't really matter where they are located. Many probably would prefer to stay here - but not if they are going to get bent over in being asked to pay really high taxes without meaningful cuts in public spending and a widening of the tax base so there isn't the ridiculous situation (a major anomaly in the EU) where 40% of people pay NO income tax (but still feel entitled to bleat on about 'fair shares').

I agree mobile workforces that can provide their work independend from the physical location are most likely to ask for inter company transfers to some other countries where they can keep their standard of living.

If they now raise the tax by at least 5% as they must to cover the whole you are going to see a lot of more people in international companies asking for transfers and in addition existing employers are going to have problems to fill positions for highly skilled workers which are open because our 3rd level education system can't fill them.

The new Intel Facility for example, they have a lot of open jobs, do you really think that an international professional will come to their if he has a tax burden that is unresonable?

 

[sunrock]

When the tax take is dicussed as in the above posts , it is a percentage of income tax Only. The low paid still have to pay tax on petrol,cigs,drink and cars etc.
Personally I think the low paid should be brought into the tax net and the high earners should also have their tax increased.
I do not share the concern of other posters in worrying about getting people to fill job vacancies. Highly qualified job applicants are desperate to find jobs and are adjusting their salary expectations downwards,and this recession is worldwide,so intel could recruit anywhere in the world.
I also feel this government jobs embargo is really discriminating against young people entering the job market...I presumt the government are hoping they will all emigrate,but seeing that this is a world wide recession,it looks like they will sit tight on the dole which will of course cost the government a lotof money

 

[zephyro]

Not yet. Wait for the next election...

The budget deficit will be around €25b this year and probably more over the next few. Do you have or know of a plan from the socialist brethren backed by hard numbers that sum to around €25b?

 

[sunrock]

This doesn't make any sense - how can a replacement private sector worker earning less and paying less tax be a good thing for government finances?


I was responding to a prvious posters concerns about workers leaving their jobs in this state to work abroad because of increased taxes here.
Since this is a global downturn,I would imagine austerity measures will be in place worlwide .Even if a certain worker left his job ,I am sure his /her employer would have no problem filling that vacany ,probably at a lower rate.
Recently many companies have ceased operations here or moved abroad for lower labour costs,with subsequent massive loss of tax revenue to our government.My point is that lowering our cost base and wages are helping companies survive and still contribute to the tax base.

 

[shnaek]

... concerns about workers leaving their jobs in this state to work abroad because of increased taxes here.

I have to say that I do think these concerns are real. When you look at this from a logical point of view - why stay here if we become a high tax economy, when you can go to other high tax economies and enjoy far better services for those taxes?

Look at what you get in Denmark, Sweden, France, Germany etc for what you pay. You get far superior roads, superior public transport, superior health etc. What do you get here for your higher taxes?

Thinking about it in the 'Shopping Around' sense of things (which we were all encouraged to do a while back in order to get the best deals!) then you have to say that a high tax Ireland would be rather poor value for money. Unless you really loved the country, or were stuck here for some reason - you have to say there are better options out there, even with the global downturn.

I hate to run down the country - on a beautiful day there's no nicer place - but our leaders have really let us down, and this time it could screw the country for a decade or more. Do we really want to stay when all we hear every day is depressing the life out of us? Could you take ten years of this? Could you even take 5 years of it?

 

[sunrock]

I have to say that I do think these concerns are real. When you look at this from a logical point of view - why stay here if we become a high tax economy, when you can go to other high tax economies and enjoy far better services for those taxes?

Look at what you get in Denmark, Sweden, France, Germany etc for what you pay. You get far superior roads, superior public transport, superior health etc. What do you get here for your higher taxes?
have to say that a high tax Ireland would be rather poor value for money. Unless you really loved the country, or were stuck here for some reason - you have to say there are better options out there, even with the global downturn.

Fair point,but most people are STUCK HERE.
Because they still have an income here from a job or social welfare payments
and
they have no guarantee of getting an income in sweden etc
If you do think you can get a similiar income abroad,please don`t think,it would be unpatriotic to move.In actual fact you could hardly do a more patriotic act,someone on the dole will slip into your job saving the government here this persons dole money or saving them your salary if you are a public worker and the gov applies the job embargo.

I

 

[Purple]

I do not share the concern of other posters in worrying about getting people to fill job vacancies. Highly qualified job applicants are desperate to find jobs and are adjusting their salary expectations downwards,and this recession is worldwide,so intel could recruit anywhere in the world.

There are still many job vacancies that Irish people cannot fill because they don't have the skills or an education system which is good enough to train them. Even in my company, which is relatively low-tech, we cannot get skilled Irish people. What chance does Intel have?

 

[Complainer]

The budget deficit will be around €25b this year and probably more over the next few. Do you have or know of a plan from the socialist brethren backed by hard numbers that sum to around €25b?

Do you have or know of a plan from anyone backed by hard numbers that sum to around €25b?

 

[sunrock]

There are still many job vacancies that Irish people cannot fill because they don't have the skills or an education system which is good enough to train them. Even in my company, which is relatively low-tech, we cannot get skilled Irish people. What chance does Intel have?

Surely these companies can get the skilled jobseeker from one of the unemployed in the WHOLE WORLD. Wages even with higher taxes are still quite good by internatioal standards.

 

[diarmuidc]

Do you have or know of a plan from anyone backed by hard numbers that sum to around €25b?

YES but you don't want to listen to it.

 

[Complainer]

YES but you don't want to listen to it.

Let's hear it, then.

 

[diarmuidc]

Let's hear it, then.

You cut expenditure in each government department back to pre-bubble levels. If each minister can't get the job done, hire in someone who will. Pretty much every large company has done the same exercise at some period in their history.