Credit Cards tax to Charities

This featured yesterday on radio and in the Irish Times. The campaign has a website where you can sent an email to the Govt here [broken link removed]. Personally I detest these type of nasty taxes but this seems like an interesting twist.

If the government agrees to give this money to charities then it is the same as the government saying it doesn’t need this tax revenue. If that is the case, then the money, which originally belongs to me and you at the outset, should not be collected at all.

I think it’s all academic as there isn’t a chance that this scheme will happen.

I agree with Mouldy. If the state does not need the taxes then they should not collect them and leave it up to the individual to make a decision on what they want to do with it - e.g. donate it to charity or whatever.

Well I don't think its there because they need it as such, but its more there to encourage responsible use of credit cards, I mean with one card you've got a 40 euro a year duty, but if your an impulsive shopper that think carrying 10 credit cards will allow more puchasing power you would think twice about getting all the extra cards as 40 by 10 is a lot more than just 40.

simplename said:

Well I don't think its there because they need it as such, but its more there to encourage responsible use of credit cards

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I've never heard that being put forward as the rationale for the SD on cards and I doubt very much that it is the case. Even if that was the case why would they slap a tax (albeit €10 or usually €20 for combined debit and ATM cards rather than €40) on ATM or debit cards (e.g. Laser) when there is no credit risk involved (i.e. with a debit card or an ATM card on an account with no overdraft facility you can only spend money that you already have)?

I agree with ClubMan. We are the only Country in the World with a credit Card Tax - correct me if I'm wrong.
I have two users on my Card so I only pay €20 and I will not get a Laser Card because of the extra €10 charge.
€30 (€10 for ATM & €20 credit card) per year is enough tobe paying. All these charges should go.

BroadbandKen said:

I have two users on my Card so I only pay €20 and I will not get a Laser Card because of the extra €10 charge.

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I thought that the SD was actually charged on the account so more than one ATM only card on a single account should only cost €10 total? I seem to recall that that's how it works for multiple CCs operating on the same CC account anyway (i.e. only a single €40 charge on the account itself no matter how many cards operate off it). You should check this out because the bank could be misinterpreting the rules and incorrectly charging the SD on each card.

I remember being asked for my opinion on this by one of the charities that was going to get involved, when this idea was first mooted. I haven't changed my stance since then -- this idea was ill-conceived and not thought through to a logical conclusion. There is simply no way that any responsible government minister could effectively take a revenue stream and direct it through the voluntary sector without putting adequate controls in place, effectively duplicating the work of the Irish Aid section of the Department of Foreign Affairs. Secondly, there would (rightly) be uproar if the government on the one hand decided that they no longer needed this revenue and on the other hand decided to force every cardholder to pay an equivalent amount to a group of charities, whose aims might not all appeal to everybody. In other words, there would have to be an opt-out clause, and most people would take it.

In essence, this proposal was very badly thought through. I understand that the promotor is an accountant -- glad he's not doing my books!

auto320 said:

In other words, there would have to be an opt-out clause, and most people would take it.

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AFAIK it is not a 'compulsory' scheme. I vaguely remember this being mentioned in radio interview mentioned above.

God forbid, that everyone that has been financially assessed by a bank to afford a credit card, should automatically donate €40 to a charity each year.

The promotors of this scheme at the time were estimating a return based on the number of credit cards in use, assuming that most people would opt in or otherwise stay with the tax given a choice. In my view, they are completely off the mark in this; I have no problem with supporting deprivation through my taxes and the voluntary sector, but I would be the first one to opt out of this scheme and I think most people would do likewise. That's why I think it is badly thought out, surprised that it has run so far even. Ideas like this normally don't get past the first mention, with good reason. Amazed that the venerable Mr. Hobbs even lends his name to it.

In fairness, we need people who give of their own time to formulate and implement any ideas that will make someone elses life a little better.

If we are to knock these at the first hurdle, nothing would ever be done.

It is very well to criticise, but I don't see too many alternative suggestions here.

>>If the government agrees to give this money to charities then it is the same as the government saying it doesn’t need this tax revenue. If that is the case, then the money, which originally belongs to me and you at the outset, should not be collected at all. <<

I agree with this.

I think there are already things in place which should be expanded - for instance the Worldvision MBNA card. Some of the annual charge and a % of every purchase goes to Worldvision. So if you want to support Worldvision you can have this card and it doesn't cost you a penney extra. Not quite sure how it works - I guess ultimately it's a donation from the credit card company - but if there was enough take up it would make it worthwhile to have variations on this theme widely available.

this sounds like the ridiculous Chirac idea that he attempted to impose on all of us:

if they don't need the tax they shouldn't take it.

BroadbandKen said:

I have two users on my Card so I only pay €20 and I will not get a Laser Card because of the extra €10 charge.
.

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If you're with AIB you get free banking if you get their Debit card, and the savings (in my case anyway) are in the region of €100 per year.....

annR said:

Not quite sure how it works - I guess ultimately it's a donation from the credit card company - but if there was enough take up it would make it worthwhile to have variations on this theme widely available.

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I think that it is more to do with the 'sarcrafice' of a certain % in interest on the outstanding balances on the credit cards. So, the people that do not pay on time are the ones that are 'donating'.

If this is the case then it is hardly ideal. Open to correction on this.

Both Holland and Belgium had these 'little taxes' for a while - Belgium even had a tax on individual monitors at one stage.
Holland has now rolled up all minor taxes - including the TV licence and manages them as part of the main income tax. More efficient, less adminstration to be done, don't have to pay the wages of the licence man etc. I for one wouldn't mind an extra 0.5% on the pay packet if it meant I wasn't stung for all these stupid bits during the year.
[Yes I accept that 0.5% is more than the bits, but we could reduce VAT then or something]