I am absolutely opposed to the levy or the reduction in tax relief on pensions contributions, but we need to accept that the state cannot afford such generous terms to incentivise private pensions provision anymore.The main difference is that I can put my savings into an account bearing no interest and thereby avoiding any confiscation. Or I could put the funds into some other non-income producing investment.
I am absolutely opposed to the levy or the reduction in tax relief on pensions contributions, but we need to accept that the state cannot afford such generous terms to incentivise private pensions provision anymore.
This is a very modest contribution from those who have modest assets. If they have a huge fund, they can well afford the contribution.
This seems most strange, coming from the guy who wants the Govt to stay out of everything. Everything except subsidising the pensions of middle and upper classes it seems.I believe that the state cannot afford to not incentivise private pension provisions.
If you want to spin pension tax relief as a 'defereral', then I'm going spin this levy as simply an advance tax payment - you're just paying a little bit of the tax now (when the State needs it badly) and you'll be paying less when you do retire (because your fund will be a little bit smaller).What disgusts me most about this tax is the point already made, that it simply is clawing back some of the tax relief enjoyed by those paying in, when in fact people are simply deferring the tax payment until the time when they retire and withdraw funds.
That's the joy of percentages. If you have a small fund, you pay a tiny amount. If you have a large or huge fund, you pay a modest amount. It's 0.6% folks - less than what the cheapest annual management fees charge.How is "modest" defined here and why are some people presuming that everyone with a pension fund in place has automatically a "huge fund".
Can i ask a question, why do they need to fund this new scheme, surely if they reduce the vat, ets, they expect more people to stay in hotels, more people to eat out, thus bringing in more vat (at the lower rate) to mkae up the difference?
If you want to spin pension tax relief as a 'defereral', then I'm going spin this levy as simply an advance tax payment - you're just paying a little bit of the tax now (when the State needs it badly) and you'll be paying less when you do retire (because your fund will be a little bit smaller).
Now you can all jump at me and tell me I got it all wrong
That's the joy of percentages. If you have a small fund, you pay a tiny amount. If you have a large or huge fund, you pay a modest amount. It's 0.6% folks - less than what the cheapest annual management fees charge.
What disgusts me most about this tax is the point already made, that it simply is clawing back some of the tax relief enjoyed by those paying in, when in fact people are simply deferring the tax payment until the time when they retire and withdraw funds.
Quote:
The following groups remain unscathed:
Public sector pensioners
Old age pensioners
Semis state workers and pensioners
Wrong, Old age pensions are paying USC on their private pension
Funding for a similar pension in the private sector would cost about 30%+ of salary for salaries over 60,000 and the pensions levy imposed was about 9 or 10% and yes I know that PS/CS was already contributing up to 4% before the levy was brought in, so this arguement does not wash when you compare both contribution rates. However all that being said the PS/CS that have AVC will have to pay the pensions levy on their funds as well.Public sector already got hit with pension levy
yes I know that PS/CS was already contributing up to 4% before the levy was brought in
I can see how you would think that, and just to clarify I do not belive the government should stay out of everything but rather that government should stay out of almost everything. Since they do meddle in pretty much all aspects of life, including an unfunded pension promise which will be increasingly difficult to fund in the future, then it is a good thing for government to incentivise people to fund their own pensions.This seems most strange, coming from the guy who wants the Govt to stay out of everything. Everything except subsidising the pensions of middle and upper classes it seems.
You could only spin it that way if the levy were deducted from your tax liability upon exit. To say that the government is doing my future tax bill a favour is like me telling my employer to pay me less so that I don't pay as much tax.If you want to spin pension tax relief as a 'defereral', then I'm going spin this levy as simply an advance tax payment - you're just paying a little bit of the tax now (when the State needs it badly) and you'll be paying less when you do retire (because your fund will be a little bit smaller).
No, it was the public service that was hit by the public service pension levy: large chunks of the public sector (eg ESB and commercial semi state bodies with funded db pension schemes) were not hit by the public service "so called" pension levy.Public sector already got hit with pension levy
So let me paraphrase that for you. When the Govt uses its resources to make you and other middle/higher earners better off, then the Govt is great. When the Govt uses its resources to make low or no earners better off, the Govt is terrible. It's all clear to me now.I can see how you would think that, and just to clarify I do not belive the government should stay out of everything but rather that government should stay out of almost everything. Since they do meddle in pretty much all aspects of life, including an unfunded pension promise which will be increasingly difficult to fund in the future, then it is a good thing for government to incentivise people to fund their own pensions.
Tax relief is tax foregone. Tax is legally the property of the Govt. If you don't like it, move to another country (though I'm not quite sure that you'll find one to meet your taxing requirements) or lobby to get the law changed. Tax is legally the property of the Govt, and by allowing people to put tax-free money into pensions, the Govt is foregoing large amounts of tax. It is now taking just a little bit of that subsidy back.The tax incentives of private pension contributions are not a subsidy, as the government do not pay towards the funds. What simply happens is that people are allowed to keep what is rightfully their property; you cannot say that letting people keep what is theirs is a subsidy. A directed incentive yes, but no government money goes towards paying for it, so it is not a subsidy.
You could only spin it that way if the levy were deducted from your tax liability upon exit. To say that the government is doing my future tax bill a favour is like me telling my employer to pay me less so that I don't pay as much tax.
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