Should we pay more tax to have a better society?

I find these discussions interesting, especially when the inefficiencies, both real and imagined of the state get thrown about.

The state is us, the people and sadly our politicians are a reflection of this.

Political decisions will trump "rational" decisions. That is the way.

The children's hospital is often used as a stick to beat the relevant minister.
But it is a product of our democratic process.

Good idea = build a new purpose build children's hospital for future generations.
Reality
Where?
How to fund it?
Mission creep?
Committee stage
Freeze design?
No?
Mission creep/time passes=> start again.

We all want the best for society but usually we want the magic money tree at the end of the garden to pay for them.

A fact often missed by many is that a good plan now and implemented now is better than the most fabulous plan in the future.

We as a society would need to temper our expectations for the maximum benefit of all.

But you are dealing with people so that will never happen.
 
T McGibney said:
Total logic fail there Brendan, sorry
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Hi Tommy

It might be a bit difficult for people to see, but when you think it through, Employers PRSI is a tax on employees.

When taxes are raised on employers they have less to pay, so they pay lower salaries to employees.

There are lots of papers on it.

Here is just one.


Nonetheless, both the theory and empirical evidence on payroll taxation suggest ambiguous effects on employment and unemployment. When wages are flexible and workers value the benefits financed through payroll taxes as much as the contributions cost employers, changes in payroll taxes are fully shifted from firms to employees in the form of lower wages. In this case, payroll taxes have no disemployment effects. However, if wages are rigid or payroll taxes finance benefits not completely accrued by employees,
there would only be partial shifting and employment would be affected by payroll taxes.


Brendan
 
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My key point is that it would be better to link benefits to the contributions made.

There is no way that the €1,200 paid in PRSI by someone earning €30,000 a year is enough to fund their Contributory Old Age Pension.

It should be raised to fund the level of pension or else, put into a pot, and make it a defined contribution pension.

Brendan
 
Calico said:
Higher-rate tax payers are already paying 52% tax and what do we have to show for it?
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Except that they are paying it only on their marginal income.

Effective tax rates in Ireland are comparatively low for most people:
1) The lower paid
2) Middle earners
3) Married people
4) People with kids - when you treat child benefit as a tax refund.

They are about the same as rates internationally for
1) The higher paid
2) Single people.

Brendan
 
Brendan Burgess said:
Hi Tommy

It might be a bit difficult for people to see, but when you think it through, Employers PRSI is a tax on employees.
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Hi Brendan

If Employers PRSI were a tax on employees, that would imply that employees pay it. That is clearly not the case.

If its rate increases, an employer cannot legally recoup that additional cost from their employees.
If its rate decreases, an employer is not legally obliged to pass the savings on to their employees.
If a serving employee reaches PRSI exemption age, they do not become legally entitled to a pay increase to recoup the Employers PRSI saving associated with their salary.

It's a tax on employment and a cost of doing business.
 
Tommy

You of course technically correct.

But the reality is that the employer taxes and the employees wages come from the same pot. Which is why increases in employment taxes lead to lower salaries. So they are, effectively, taxes on employees while legally, they are charged to employers.

Brendan
 
Brendan Burgess said:
Tommy

You of course technically correct.

But the reality is that the employer taxes and the employees wages come from the same pot. Which is why increases in employment taxes lead to lower salaries. So they are, effectively, taxes on employees while legally, they are charged to employers.

Brendan
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I'd argue Brendan that increases in employment taxes lead to less employment.
(It's almost impossible to cut someone's salary except in rare circumstances.)
And that increases in say, automation and mechanisation costs relative to employment costs lead to higher employment.
 
Giving how most of my income already is paid to the Government in either direct or indirect taxes how much more can I give before I could just transfer my whole income to the Government and ask them to provide me with free lodging and an allocation of food vouchers?

The answer is not more taxes but a cut in wasteful spending and streamlining of public spending by reforming how the state spends money and stopping overpaying for what is needed.

That includes a discussion of what the state should actually provide as a safety net and as basic services to the public and what the state should not provide or fund.

We need to go back to a system of individual responsibility, rewarding people for their contributions and build an effective safety net that covers those who cannot work or find them temporarily out of work which actually covers their needs and is not just a token payment.

Work needs to be rewarded and the government needs to stop wasting money (including on their own TD / minister salary).
 
T McGibney said:
Hi Brendan

If Employers PRSI were a tax on employees, that would imply that employees pay it. That is clearly not the case.

If its rate increases, an employer cannot legally recoup that additional cost from their employees.
If its rate decreases, an employer is not legally obliged to pass the savings on to their employees.
If a serving employee reaches PRSI exemption age, they do not become legally entitled to a pay increase to recoup the Employers PRSI saving associated with their salary.

It's a tax on employment and a cost of doing business.
Click to expand...


Benson & Hedges send the cheque for excise duty on tobacco to the Revenue.

But smokers pay the tax.

This is something called the incidence of taxation, as in, who does the tax fall on.

CT is paid by Ryanair on their profits, but effectively the staff, customers and shareholders are paying it.

Employers PRSI is paid by the firm, so they see it is a cost of business, but the incidence is shared by the emolyer and employee.
 
Protocol said:
Benson & Hedges send the cheque for excise duty on tobacco to the Revenue.

But smokers pay the tax.

This is something called the incidence of taxation, as in, who does the tax fall on.

CT is paid by Ryanair on their profits, but effectively the staff, customers and shareholders are paying it.

Employers PRSI is paid by the firm, so they see it is a cost of business, but the incidence is shared by the emolyer and employee.
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That's a slightly different argument.
By its yardstick, a hike in employer's PRSI is paid for jointly by a business's employees, owners and customers.

Even on those terms, a claim that it's a tax on the employees fails.
 
T McGibney said:
I'd argue Brendan that increases in employment taxes lead to less employment.
(It's almost impossible to cut someone's salary except in rare circumstances.)
And that increases in say, automation and mechanisation costs relative to employment costs lead to higher employment.
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I agree completely.

In my company we reduce our prices to our customers each year, despite higher rates, raw material, utility and insurance costs and despite that we increase our margins.
We do that by getting more efficient and better at what we do. We've cut our employment level by 25% in the last 5 years without reducing turnover by process improvements, capital investment, up-skilling and automation.

When the State can reduce it's costs in the same way then I'll have no complaints about paying over half my income in taxes. When the HSE published data showing how much cheaper it is to process patient through A&E this year than it was last year, how many more patients they can process with the same staff and resources, etc then they won't be wasting my money.
The same goes all administrative functions in every area of the State sector. All else being equal the cost of delivering the same services should get cheaper year on year, not more expensive because the people who are delivering them have had a year to get better at their jobs and improve their processes and procedures. If they aren't doing that then they are not doing their jobs properly.

To the State and State sector:
Stop wasting my money and do your job properly.
Stop moaning and complaining about lack of resource and do your job properly.
Stop making excuses for your own inefficiency and incompetence and do your job properly.

Then you can have my money without me resenting your incompetent use of it. They you will be fulfilling your side of the social contract, just like I do when I give you over half my income.
 
niceoneted said:
Find out what your spouse will actually be entitled to as a pension. Don't rely on 'as far as I know its a pretty good pension'
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extopia said:
At a meeting with a solicitor recently, I was struck by how, in a conversation about inheritance and tax, the professional advisor assumed that my default position would be to minimise my own ‘tax bill’ in relation to my potential inheritances, and to minimise my children’s tax bill in relation to theirs.

It seems to me that, if we want a better society, with good public services, a health system, a system for ensuring most people have somewhere to live, we should be willing to pay more tax. Or at least start rethinking our attitude towards tax as a burden, whereas it might be something else entirely, something that is necessary for the public good.

Maybe tax is the future, a means to unlock human decency and solidarity with others? A good thing, in other words; a price many are willing to pay?

Am I alone? Can we rehabilitate taxation as a means towards creating a better society?

Or am I hopelessly naive?
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Do you pay your tv licence though?
 
Brendan Burgess said:
My key point is that it would be better to link benefits to the contributions made.

There is no way that the €1,200 paid in PRSI by someone earning €30,000 a year is enough to fund their Contributory Old Age Pension.
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What about the people that receive a pension without contributions. In 2020 a fifth of pension recipients were non contributory, should that also be fully funded by those who pay state pension contributions?
 
A self employed director may have a lower PRSI percentage contribution but may pay a much higher amount. Why should he/she not get a commensurately higher pension? Surely the amount is a more important measurement than percentage if the benefit amount is fixed?
 
Purple said:
I agree completely.

In my company we reduce our prices to our customers each year, despite higher rates, raw material, utility and insurance costs and despite that we increase our margins.
We do that by getting more efficient and better at what we do. We've cut our employment level by 25% in the last 5 years without reducing turnover by process improvements, capital investment, up-skilling and automation.

When the State can reduce it's costs in the same way then I'll have no complaints about paying over half my income in taxes. When the HSE published data showing how much cheaper it is to process patient through A&E this year than it was last year, how many more patients they can process with the same staff and resources, etc then they won't be wasting my money.
The same goes all administrative functions in every area of the State sector. All else being equal the cost of delivering the same services should get cheaper year on year, not more expensive because the people who are delivering them have had a year to get better at their jobs and improve their processes and procedures. If they aren't doing that then they are not doing their jobs properly.

To the State and State sector:
Stop wasting my money and do your job properly.
Stop moaning and complaining about lack of resource and do your job properly.
Stop making excuses for your own inefficiency and incompetence and do your job properly.

Then you can have my money without me resenting your incompetent use of it. They you will be fulfilling your side of the social contract, just like I do when I give you over half my income.
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To be fair to public services, many of them can't or don't experience the same increase in productivity as seen in industry.

Your industry, and many others, like making electronics, toys, etc. experience economies-of-scale, automation, leading to large increases in productivity, and falling unit costs.

In contrast, nursing, education, medecine, police, etc., are very labour intensive, and don't see the same increases in productivity.

This is known as Baumol's cost disease.

It's why I can buy a chicken at 4 euro, cheaper than ever before, but the price of a haircut keeps rising. A barber can't cut any more heads compared to 50 years ago.


However, in saying all this, we could still do with much more EHR, automation, ICT in the public service, especially in the HSE.
 
yellowmoose said:
A self employed director may have a lower PRSI percentage contribution but may pay a much higher amount. Why should he/she not get a commensurately higher pension? Surely the amount is a more important measurement than percentage if the benefit amount is fixed?
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Moose

If I understand your point correctly, I agree with it.

A self-employed IT consultant paying €4,000 a year PRSI on an income of €100,000 should get a higher pension than a self-employed taxi-driver paying €800 a year on a €20,000 income.

And by the same token, an employee on €100,000 who contributes € 4,000 a year, and whose employer contributes €11,000 a year in PRSI should get more than the self employed IT consultant.

Brendan
 
Purple said:
We do that by getting more efficient and better at what we do. We've cut our employment level by 25% in the last 5 years without reducing turnover by process improvements, capital investment, up-skilling and automation
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Reading through this thread, most people believe that efficiencies can be found is having a lean, mean public service by cutting out waste (good luck with that). I was thinking, "they're going to have to make a load of public servants redundant to do that...and pay them a good severance package and they'll still have their pensions. Otherwise, it will be a recruitment freeze for years to reduce numbers as people retire.

And where do you cut? Less police? There's not enough. Less medical? There's not enough? Or is it just the civil servants and paper pushers you want to get rid of?

Or we want people to look after themselves? If your at the bottom and on welfare, it's hard to get work that will pay significantly more than you get on welfare, especially given rent allowance.

None of this is simple. It will take more than one lifespan of a government to do and it is unlikely that any party would have the political will to do so given how unpopular significant change will be at the ballot box.
 
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