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.
First of all government does not have its own resources it only has what it takes from the economy. Secondly the government is not using its resources when it allows people to keep their own property, nothing is being given to someone paying into a pension. When government "helps" people through direct payments it does so by taking money from one group of people and giving it to another. There is a fundamental difference in allowing people to keep what is theirs and giving to people something that is not theirs.
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.
I fundamentally disagree with you. What people earn, in whatever way that may be, is their private property. The only organisation that can legally take some of the private property away is the government. By your argument 100% of GDP is government property, and only by the grace of government are we allowed to keep some of that by having less than 100% taxation. But that is of course a ludicrous suggestion. Uninterfered private property rights are one of the most important reasons why the western world managed to get itself out of the constraints of serfdom and mercantilism and prosper in the way it did.
No - it's not like that at all, because the Govt and the employer are two different parties. If (as you claim) pensions are a tax deferral, then this is just taking the tax a little bit early. It would have gone to the Govt anyway, wouldn't it? [Unless of course, there is something that you're not telling us].
Your suggestion would make sense if upon exit the percentage of tax were reduced. What you are also not accounting for is the loss in compound gains on the 2.4% taken out of the pension pot. Assuming a pension pot of €100,000 and 25 years to retirement, the levy will take out €2400. A modest return of 6% per year will mean €10000 less in pension value after 25 years. The government is not just reducing wealth by the small sounding 0.6%.
I'm not in favour of this tax, but some of these postings display an amazing sense of irony. Fact is that the fund-managers and advisors who are screaming about the unfairness of this levy charged far more than 0.6% for the "management" and advice that resulted in losses to the same funds many orders of magnitude greater than what is now proposed. Shane Ross has it perfectly right. The incompetents who lost our money, not their victims, should be made to pay this tax.
Regardless of how good or bad fund managers have done, they are providing a direct service on a product that people are free to sign up for. The government levy on the other hand is not voluntary and the government do nothing to add to the value of the fund.
The fact that many funds are down and that that somehow reflects badly on the managers in general is not a good way to judge performance. A fund's performance should always be looked at in relation to an index. A stock fund could be down 30%, but if the stock index is down 40% then the fund manager did a good job.
Any extra charges levied on fund managers will simply be passed on to customers.
Some genius even feigned concern that this levy would discourage ordinary people from saving! That horse fled the stables long ago. Ordinary people have been fleeing the products being flogged by this failed industry, and not because of tax. they are opaque, wildly over-priced, risky, and incapable of assuring a predictable value at the chosen time of retirement. Most of all, they are just plain bad-value. The only reason they survive is that the enormous tax-payer subsidy disguises the losses and high charges. Their only function for middle-income people is tax-minimization rather than providing for retirement. Ther are irrelevant to people of modest means. With the economy in its present straights, the exchequer can't afford to subsidize this codology.
If you want predictable value for your pension investments you can always choose a cash or bond fund. The level of risk of individual funds is usually very clear and people can choose what level of risk they want to take. I also disagree that private pensions are generally bad value. Yes, some providers charge you on payments going in and then a management fee, but there are brokers that will void those charges.
As already stated, no money is being handed over from government to the pension investor so it is not a subsidy. Could you also clarify how you come to the conclusion that a private pension is not a form of "providing for retirement"?
A modest proposal. We should allow everyone to nominate an ordinary deposit account which would be designated for their pension. Once designated, payments into this account up to a set threshold would be dirt-free. The income invested (to the current maximums) would be tax-exempt. Each financial institution would be required, once the account is designated to apply an interest rate and charges not less than those applying to the best rate and lowest charges currently on offer in respect of any of their term deposit accounts. Nothing to manage or administer (more than any other deposit account). No fees and charges. No unpredictability. No crashes. probably a better net return than the disasterous products currently on offer. Any takers? What about the credit-unions?
You can already do this by allocating pension contributions into a cash fund.
