Lab and FG propose increase in DIRT to 30%

[legal33]

With the FG / Labour proposed increase in DIRT to 30%, it means a normal deposit account would need to pay 4.6% per annum to equal An Post 3 year savings bonds, and 5% per annum to equal An Post 5.5 year savings certificates. Is that right?

 

[Chris]

I'm not the best at math, but I think you are about right. I really do not understand how politicians that say there is not enough credit available for businesses, then have the audacity or stupidity to suggest increasing taxation on one the main sources of credit, i.e. savings. Utter economic ineptitude is the only thing that comes to mind.

 

[jpd]

Reporter: Why do you rob banks?
Answer: Because that's where the money is

 

[farmerette]

sounds like labour are proposing a 30% DIRT rate and fine gael are willing to go along with it

 

[Lightning]

The IMF have given all the Irish banks loans to deposits ratio's of 100% to 120% by 2013.

Raising DIRT, will only dis-encourage saving and make it more difficult for the banks to meet the IMF targets.

 

[Complainer]

The IMF have given all the Irish banks loans to deposits ratio's of 100% to 120% by 2013.

Raising DIRT, will only dis-encourage saving and make it more difficult for the banks to meet the IMF targets.

Why are you only measuring one side of this measure? If it is successful, and does encouraging spending over saving, what will be the overall economic impact of the spending?

 

[Chris]

Why are you only measuring one side of this measure? If it is successful, and does encouraging spending over saving, what will be the overall economic impact of the spending?

The impact of spending will be the same as the impact of the celtic tiger spending: utter disaster. You cannot spend your way out of a financial mess. This country is so deep in public and private debt that everything possible should be done to encourage savings and investment.

 

[Duke of Marmalade]

With the FG / Labour proposed increase in DIRT to 30%, it means a normal deposit account would need to pay 4.6% per annum to equal An Post 3 year savings bonds, and 5% per annum to equal An Post 5.5 year savings certificates. Is that right?

No. After allowing for PRSI and Levies on deposit interest the correct comparatives are more like 5% (3 years) and 5.5% (5.5 years)

 

[Lightning]

Why are you only measuring one side of this measure? If it is successful, and does encouraging spending over saving, what will be the overall economic impact of the spending?

It is likely to have minimal impact on spending. Right now, Irish banks need deposits.

 

[dereko1969]

I think this is a good proposal the increase in savings over the past 2 years has been phenomenal and we need to get people spending money again. As long as they don't increase VAT at the same time - I think the current (soon to be former) Government's plan for an increase in VAT in 2013 and 2014 is madness.

 

[Complainer]

The IMF have given all the Irish banks loans to deposits ratio's of 100% to 120% by 2013.

Raising DIRT, will only dis-encourage saving and make it more difficult for the banks to meet the IMF targets.

It is likely to have minimal impact on spending. Right now, Irish banks need deposits.

Surely, if it is going to have a minimal impact on spending, then it will also have a minimal impact on discouraging saving and making it more difficult to reach IMF targets?

 

[Chris]

I think this is a good proposal the increase in savings over the past 2 years has been phenomenal and we need to get people spending money again. As long as they don't increase VAT at the same time - I think the current (soon to be former) Government's plan for an increase in VAT in 2013 and 2014 is madness.

While saving and paying off debt has increased, it is by far not enough. Ireland is still one of the most indebted nations per capita, on the planet. People in Ireland squeezed 20 years worth of consumer spending into 10 years and most of it on credit. You don't fix that with two years of savings.
From an economic point of view spending is wealth destruction, while production is wealth creation. The last thing Ireland needs now is to destroy more wealth.