We pay tax , it comes out of our pay cheques every fortnight, and we keep private business going by using and paying for their services. To use your logic any money we spend on private services should be deducted from the amount of tax paid by private sector workers and not reckonable.
The tax you hand over to revenue comes out of the revenue coffers in the first place, this does not add to the tax pool.
This is the part I say is nonsense.
They contribute by paying part of their salary in tax. Where the government get the money to pay their salary is irrelevant.
No, where government gets the money from is the most important thing. If I give my daughter pocket money out of my account and then ask her to contribute to household costs out of that pocket money, then I cannot claim that household revenue has been increased and she has contributed to the running costs of the household.
The economy has no new money, but has gained a teacher. I think everyone is overlooking the actual work provided by the public service, and it's value.
It has gained a teacher and lost a job in the private sector. I am not saying that this is a good or a bad thing, but adding the teacher comes at a cost.
But there is a huge contribution to the economy and to the private sector.
No, government cannot contribute to the private economy. Ever penny government spends, be it on direct employees or on services by private companies, has to be taking out of the economy. At the very best there is zero net gain to the economy.
Of course they contribute to the cost.
If teachers were paid gross without any tax being deducted, there would be less money to pay the gardai, fire fighters etc.
How is this not contributing?
I think what orka was saying is that if the current salary of a government employee is €24k and they have €2k deducted in taxes, then their salary should simply be €22k, while at the same time cutting out the cost of tax accounting on pay day. This would not mean that there is less money to pay for other services, as less wages would have been paid out in the first place.
Here is most simple way to demonstrate the scenario:
Imagine an island economy which is worth €1000 per anum. The residents decide it is time to set up a government and provide a certain amount of services. To do this they tax the economy at 10% resulting in revenue of €100 to the new government. The government then proceeds to employ some people and wages paid to all government employees is €50 per anum. These employees are then taxed at 10%, meaning they hand back €5 to the government. The government's revenue is now not up to €105 in total for the year, revenue is still €100. Only the productive economy can be a source of government revenue.
