Cut the dole to cut higher tax rates

[TheBigShort]

From the man who started a thread about pay rises with a far more nebulous premise.

If we accept that the tax system is unfairly burdensome on those who are medium to high earners then the details of how to solve the problem can follow.

First, you disregard my comments as meaningless on the basis that my examples didnt use real figures.

Second,you want me to accept that the tax system is unfairly burdensome on medium to high earners as a pre-condition to you providing details?

Third, you haven't been paying attention at all. I agree that the tax system is unfair to medium workers at least.
I am opposed however to the notion that low income earners are getting a free ride. I am opposed to taxing low income earners, not for the purposes of providing better services, but for purposes of providing tax relief for high earners.

I await your details.

 

[ashambles]

Any proposals yet in how to redress the suffering of the top 20% of income earners?
Using real figures mind!

This isn't the first time I've made this suggestion, though I fully understand why you're ignoring it.

But anyway:
Copy Sweden's income tax model take their rates and bands, that way there's no decrease in taxation on the higher paid that you find so troubling. Or take your pick of any other non-resource rich country with a non-embarassing health system, a fairly funded state pension, better unemployment assistance, good child care options.

You'll find that to fund those services they'll have to have in place an income tax system that's not as stupid as ours. Accepting the Irish income tax system means you're settling for Irish level services.

 

[Purple]

I agree that the tax system is unfair to medium workers at least.

Based on what?
Details please.

 

[TheBigShort]

Based on what?
Details please.

God, what a cop out!

 

[Purple]

God, what a cop out!

I'm not God.

 

[Purple]

This isn't the first time I've made this suggestion, though I fully understand why you're ignoring it.

But anyway:
Copy Sweden's income tax model take their rates and bands, that way there's no decrease in taxation on the higher paid that you find so troubling. Or take your pick of any other non-resource rich country with a non-embarassing health system, a fairly funded state pension, better unemployment assistance, good child care options.

You'll find that to fund those services they'll have to have in place an income tax system that's not as stupid as ours. Accepting the Irish income tax system means you're settling for Irish level services.

Good idea.

Shortie; what he said.

 

[TheBigShort]

This isn't the first time I've made this suggestion, though I fully understand why you're ignoring it.

But anyway:
Copy Sweden's income tax model take their rates and bands, that way there's no decrease in taxation on the higher paid that you find so troubling. Or take your pick of any other non-resource rich country with a non-embarassing health system, a fairly funded state pension, better unemployment assistance, good child care options.

You'll find that to fund those services they'll have to have in place an income tax system that's not as stupid as ours. Accepting the Irish income tax system means you're settling for Irish level services.

Not exactly sure why you think I was ignoring it, or how you came to 'understand' that I was I was ignoring it?
I think its a great idea. And if it means lower income earners have to contribute more then so be it.
Perhaps you have ignored my previous comments here?

But this topic is not about raising more taxes to pay for the things that you have presented. It is, at its worst, about cutting welfare rates in order to provide tax cuts for higher earners and at best, it is about transferring the taxation burden from higher earners onto lower earners in return for zero services.

Is this a bad thing? Really? Is the author advocating high tax take on low income earners? Perhaps not, perhaps a higher tax take than what is currently applied. But astonishingly, this extra tax take is not to used to provide for improved public services but rather to provide for a tax cut for higher income earners!

As you may, or may not, deduce from the above, my position is this;

I am opposed to cutting welfare and raising taxes on lower income earners for the purposes of providing tax cuts to higher earners.
I am not inherently opposed to raising taxes on lower income earners if it is to provide for improved public services.
Here is where I said this earlier

I am not inherently opposed to minimum wage workers paying extra tax. I am opposed that such a tax may be used to offer tax cuts for higher earners. This would be complete nonsense.

 

[ashambles]

Not exactly sure why you think I was ignoring it, or how you came to 'understand' that I was I was ignoring it?
I think its a great idea. And if it means lower income earners have to contribute more then so be it.
Perhaps you have ignored my previous comments here?





As you may, or may not, deduce from the above, my position is this;

I am opposed to cutting welfare and raising taxes on lower income earners for the purposes of providing tax cuts to higher earners.
I am not inherently opposed to raising taxes on lower income earners if it is to provide for improved public services.
Here is where I said this earlier

I must admit I didn't read all the posts, so I support a Nordic mix of taxes and services, you do, and I think Purple does.

Ignoring the clearly provocative title of the thread, maybe most of us are actually in agreement.

However can it happen?

Probably not, SF/AAA and maybe main stream parties in Ireland are wedded to the idea of income taxation as a mix of punishment and charity, rather than an intelligent way of redistributing income that benefits all citizens.

 

[TheBigShort]

I would like to see the PRSI contribution ceiling restored (was 52K pre-2009, then 75K until 2011 then removed). For 'pay-related' social insurance, capped benefits should mean capped contributions as is the case in many european countries.

Not an unreasonable proposition, in consideration of capped benefits for sure. The only hesitancy I would have around it would be the cost and how that cost would be recouped.
The advocates of this topic would like to see lower income earners pay for it, but I would like to see how that would be applied without exposing the wholly unjust nature of doing so.
Certainly with effective corporate tax rates hovering between 2-4%, there is surely plenty of scope to target increases there.

 

[Cervelo]

Maybe a simpler solution to reducing the tax paid by our high earners could be just reducing the payroll of our goverment and civil service ??

 

[Protocol]

There have already been 2-4 pay cuts for all public servants.

You seem to be suggesting further pay cuts? Even though wages are rising outside the PS.

If not in pay rates, then in numbers?

 

[TheBigShort]

I have no idea. Why does it matter?

Because if the top 20% were still paying 75% of the income tax back then and the bottom 50% only contributed 4% we would still be having the same discussion.

 

[Deiseblue]

Maybe a simpler solution to reducing the tax paid by our high earners could be just reducing the payroll of our goverment and civil service ??

Not a solution but rather than precipitating industrial mayhem by cutting either pay or numbers merely do nothing & leave our current tax system in place ?

 

[Firefly]

Not a solution but rather than precipitating industrial mayhem by cutting either pay or numbers merely do nothing & leave our current tax system in place ?

Hi Deise,

I agree with you. We are now almost close to balancing the books in this country. Sadly however we have half the public service lining up to strike for more pay! If it were me, I would leave things as they are for a number of years until we get our public finances in order.

 

[Cervelo]

There have already been 2-4 pay cuts for all public servants.

You seem to be suggesting further pay cuts? Even though wages are rising outside the PS.

If not in pay rates, then in numbers?

What I am suggesting is rather than start at the bottom with cutting social welfare payments, why not start at the top.
Why is our Taoiseach paid more than the British Prime Minister ??

 

[Sophrosyne]

"The PRSI system here should be changed so that a person's contributions should go into an account in their own name. This account would be used to pay their pension and their healthcare. They could also draw on the account during any periods of unemployment. The more they put into the account, the more they would get out. If someone earning €80,000 a year loses their job, they would get a dole payment based on their salary, but it would be drawn from their own account. They would not be getting some State handout, they would be getting their own money back. And it would always be in their interest to work. While they are working, they are building up their retirement account. While they are unemployed, they are depleting it.

When they retire, they would get a pension based on the amount in the account.

Such a system would go a long way to solving the pensions crisis we have. If people paid for their pension through a PRSI account in their own name, they would not need a separate, privately funded pension. They would be prepared to pay higher PRSI if they could see a direct link between what they pay in and what they eventually draw out. There would be no more arguments about the age at which a person should be able to draw the Old Age Pension. The amount of the pension they would get and the age from which it could be drawn would be decided by the amount they have in their PRSI account."

I think it would be a move in the right direction. But the current system is so completely dysfunctional, that it will take years to fix.

I think a personal account system would be a good first step in the right direction.

Brendan

What you are advocating, thefefore, is that individuals fund their own state pensions rather than contributing to a general welfare fund.
I can see that some people would like to see a certain reciprosity between what they pay in and what they receive, but I think you would need to put some flesh on the bones.

For instance, would you still grant tax relief for private pensions, including AVCs?

What about the current arrangements in place regarding credits for PRSI (or equivalent) contributions paid abroad?

Have you run the numbers within the various income deciles to avoid unacceptable poverty traps?

What about current PRSI exemptions?

 

[T McGibney]

Because if the top 20% were still paying 75% of the income tax back then and the bottom 50% only contributed 4% we would still be having the same discussion.

You miss the point that there was substantial pro-high earner and pro-enterprise tax reform and reductions in the 1990s, which was one of the factors that created a booming economy from circa 1994 onwards. In the meantime we reversed this progress with predictable results.

 

[Protocol]

What I am suggesting is rather than start at the bottom with cutting social welfare payments, why not start at the top.
Why is our Taoiseach paid more than the British Prime Minister ??

The Taoiseach pay has fallen several times, now at 185k I think.

UK PM gets a free house as well as salary, I think??

TDs get 87k.

 

[Delboy]

Maybe a simpler solution to reducing the tax paid by our high earners could be just reducing the payroll of our goverment and civil service ??

They had a golden opportunity to do that during the crash....reform the whole PS/CS, pay structures, jobs for life etc. They didn't do it then- it will never be done

 

[TheBigShort]

You miss the point that there was substantial pro-high earner and pro-enterprise tax reform and reductions in the 1990s, which was one of the factors that created a booming economy from circa 1994 onwards. In the meantime we reversed this progress with predictable results.

I understand the point you are making, and I dont necessarily disagree. But even on foot of all the tax reforms of the '90s it is still possible that the top 20% were paying 75% of the tax, by virtue not only of tax cuts to high earners but removing low earners out of the tax net altogether.
I use the ten workers in a pub parable. If eight of them, earning varying degrees of income between €100-€1000 contribute €250 tax between and workers 9+10, on incomes of €2,000 each contribute €750 between them, then we have a top 20% paying 75% tax scenario.
But the tax applied on each worker is not necessarily punitive relative to incomes earned.
The difference today is that tax increases have become punitive on middle, and high earners. I dont dispute that.
What I oppose is the concept being pushed here that tax increases and welfare cuts be imposed solely for the purposes of providing tax cuts to higher earners.
And I am asking for actual concrete proposals to demonstrate how this can be achieved. To date the only proposal, with figures and costs, has come from myself!
Its fine to say 'cut higher rate of tax', but it means nothing if the cost is not identified or where else in the taxation system this money can be found. The proposal is that low earners will cover the cost. So lets see some figures of how low income earners will pay for each % cut in the top rate of tax. Unfortunately, none have been forthcoming as yet.
Its a pretty weak position from those advocating the proposal if the only proposal produced comes from someone opposed to the proposal.