And if we pull out of the Euro, what do you think the PUNT would be worth? We'd find out the 'value' of our houses then alrightRather than talking about what should happen and I agree with many postings, what do people think actually will happen as economy worsens, I think that if the euro continues at these levels there will be big pressure on the government to pull out of the euro, i think events are now going to dictate policy and not politicians, the politicians let things go too far when they had the power to change course but now it is out of their hands
The government will pander to the unions and increase taxes to pay for it. There will also be massive cut backs.
Would it not be better to cut the higher rate of tax to give people more of an incentive to improve their employment?
I agree, but this won't happen unless we are truly in dire straits.
This, in my opinion, would be unfair on low earners.I'd personally like it if income tax was abolished in its entirety and replaced with a consumption tax, but a flat rate of income tax would be a huge improvement.
I think this is a great idea. There's probably no reason why the entire body of tax legislation could not be simplified such that it would fit on a single A4 page. I'd personally like it if income tax was abolished in its entirety and replaced with a consumption tax, but a flat rate of income tax would be a huge improvement. Perhaps we could align it with our existing corporation tax rate of 12.5%.
Since any exemptions are inevitably unfair on someone (no matter how well intentioned) I'd suggest scrapping them all. Think about much productivity is wasted every year by intelligent people trying to avoid tax, with an equal waste in productivity trying to close all these loopholes. Mind boggling.
I know but that was pretty much the motivation for lowering corporation tax and look how the economy prospered! It could happen again.
This, in my opinion, would be unfair on low earners.
Albert Reynolds once said in a Budget Speech as Finance Minister that "simplicity is the enemy of equity". In other words, if the tax system is equitable it will not be simple. If it is simple it will not be equitable.
Tax avoidance and tax planning is not a waste of productivity, merely rational financial housekeeping and cost minimisation by intelligent individuals and businesses.
I don't think a quote from Albert Reynolds proves anything! I have done no reading on the subject however, so I couldn't comment further in an educated fashion. Though I agree with csirl above on a personal level.
And I cannot see how simplicity is the enemy of equity
The tax system would be simpler if
- tax relief on medical expenses was scrapped.
- tax credits for the blind/elderly/incapacitated/widowed parents following bereavement were scrapped
- tax bands were abolished
- income tax exemptions for low earners was abolished
- VAT applied to all items including food and basic necessities
- CGT applied to gains on principal private residences.
Would these steps be deemed equitable?
I understand what he’s saying as well and I agree with him. The governments job it to manage the economy for the benefit of society, not the other way around. This requires a level of indirect social engineering. Our tax system is one of the tools at their disposal.I understand the points you are making, but those are all extreme cases. We don't have to simplify to the lowest possible level.
Charlie McCreevy simplified the system, and it is far more equitable now than it was in the days of multiple income tax bands. Would you agree?But how on earth can you simplify the system while retaining policy-based variations among tax reliefs, credits, bands and exemptions, such as those I mentioned above?
The tax system would be simpler if
- tax relief on medical expenses was scrapped.
- tax credits for the blind/elderly/incapacitated/widowed parents following bereavement were scrapped
- tax bands were abolished
- income tax exemptions for low earners was abolished
- VAT applied to all items including food and basic necessities
- CGT applied to gains on principal private residences.
Would these steps be deemed equitable?
Certainly it would be simpler to administer. However, in effect this would raise inflation and the cost of living(via VAT increases) and reduce the income of low earners to the point where they simply may not be able to afford to live.
In addition, is there not a risk that Social Welfare payments could be greater then the after tax salaries of the lower paid thus acting as a disincentive for them to work.
Albert Reynolds once said in a Budget Speech as Finance Minister that "simplicity is the enemy of equity". In other words, if the tax system is equitable it will not be simple. If it is simple it will not be equitable.
Tax avoidance and tax planning is not a waste of productivity, merely rational financial housekeeping and cost minimisation by intelligent individuals and businesses.
This, in my opinion, would be unfair on low earners.
Excellent pointsa) The government can and will be aware of all the possible ramifications of all the amendments, exemptions, credits and various other "complications" designed to provide more equity to the tax system.
b) That intervening in this manner will not cause inequity or negatively impact the economy (e.g. tax breaks for one industry leading to rampant overproduction to the detriment of other industries)
c) That such complications can be availed of easily by those who need them most. Who for example is more likely to apply for and avail of the plethora of extra tax credits available - low or high bracket income earners?
Prudent perhaps for the businesses and individuals involved. Wasted productivity on the wider scale because it adds so little to the economy.
Only if you don't believe spending is proportional to income. To avoid penalising low income earners, the FairTax movement in the US propose providing a monthly rebate up to a defined poverty level. I'm not sure it is entirely necessary to do so, but might help assuage the worst fears people would have about such a system. Certainly, with a consumption tax, low income earners would be encouraged to save and invest their income, thereby creating and building wealth.
. I'm not sure it is entirely necessary to do so, but might help assuage the worst fears people would have about such a system. Certainly, with a consumption tax, low income earners would be encouraged to save and invest their income, thereby creating and building wealth.
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