Household charge

golfwallah · 19-04-2012 8:55am

ART6 wrote: »

When you claim that tax is not excessive in Ireland I assume you mean by comparison with other countries. In that case you are clearly correct. However, my point is that the extent to which a level of taxation is sustainable has nothing to do with what it is in other countries. What matters is what the level is in relation to the strength of the national economy. If that is strong and vibrant, with consistent growth, then higher taxes are possible and may even be necessary to avoid overheating. If it is weak and in recession, with high unemployment and high company failures, then the level of tax sustainability must necessarily be much lower. There simply isn't the money there.

So you think the level of tax is too high?

Nobody wants more tax but Ireland is facing its most serious crisis since World War 2 (“The Emergency”) and action is required to address the problem of our growing debt mountain. Unpalatable as tax increases are, they are not so bad when you consider the alternatives.

Hard data are required to make a sustainable argument against either tax increases or government spending cuts.

You’re quite right that “what matters is what the level is in relation to the strength of the national economy”, but let’s measure this – say against GDP.

Gross domestic product (GDP) is the most accepted measure because it refers to the market value of all officially recognized final goods and services produced within a country in a given period.

The facts show that Ireland ranks very low in terms of tax as % of GDP, see:

http://www.nationmaster.com/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp

http://www.oecd.org/document/35/0,3746,en_2649_34533_46661795_1_1_1_1,00.html

creedp · 19-04-2012 9:42am

golfwallah wrote: »

So you think the level of tax is too high?

Nobody wants more tax but Ireland is facing its most serious crisis since World War 2 (“The Emergency”) and action is required to address the problem of our growing debt mountain. Unpalatable as tax increases are, they are not so bad when you consider the alternatives.

Hard data are required to make a sustainable argument against either tax increases or government spending cuts.

You’re quite right that “what matters is what the level is in relation to the strength of the national economy”, but let’s measure this – say against GDP.

Gross domestic product (GDP) is the most accepted measure because it refers to the market value of all officially recognized final goods and services produced within a country in a given period.

The facts show that Ireland ranks very low in terms of tax as % of GDP, see:

http://www.nationmaster.com/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp

http://www.oecd.org/document/35/0,3746,en_2649_34533_46661795_1_1_1_1,00.html

Interesting to see how 'low' Ireland's take as a % GDP when compared to other countries. However we should consider the fact that GDP for Ireland is disproportinately higher that GNP when compared to many other countries due to FDI and the high proportion of profits that are exported out of this country. It is often said that to get a more meaningful comparison with other countries we should use GNI or GNP as a comparator. Also high tax economies like the Nordic provide essentrial public services free of charge or subject to low charges/co-payments. Take for instances healthcare. People pay €132 a month (€1,584) for prescribed medication in this country, €60 to vist a GP, €100 to visit the A&E, €75 per day to be an in-patient in a public hospital. These are very significant costs imposed on taxpayers to access public services and are effectively additional taxation. We need to look at not only the proportion of direct/indirect taxes in different countries but also charges/co-payment taxpayer have to make to access public services.

ART6 · 19-04-2012 11:08am

golfwallah wrote: »

So you think the level of tax is too high?

Nobody wants more tax but Ireland is facing its most serious crisis since World War 2 (“The Emergency”) and action is required to address the problem of our growing debt mountain. Unpalatable as tax increases are, they are not so bad when you consider the alternatives.

Hard data are required to make a sustainable argument against either tax increases or government spending cuts.

You’re quite right that “what matters is what the level is in relation to the strength of the national economy”, but let’s measure this – say against GDP.

Gross domestic product (GDP) is the most accepted measure because it refers to the market value of all officially recognized final goods and services produced within a country in a given period.

The facts show that Ireland ranks very low in terms of tax as % of GDP, see:

http://www.nationmaster.com/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp

http://www.oecd.org/document/35/0,3746,en_2649_34533_46661795_1_1_1_1,00.html

I understand your argument, but I am reluctant to accept GDP as a yardstick on what the public can afford in taxes. The fact that a significant part of the GDP is, for example, created by the pharmaceutical industry doesn't provide any indication of what Joe Public can afford.

What would be more meaningful to me would be what proportion of personal incomes is taken by the government in the form of taxes, duties, charges, levies, VAT, RSI, etc. All of those are taxes, irrespective of what they are called by the spin doctors. When they all, combined, reach a point where Joe no longer has sufficient money to meet his other needs, such a food, clothing, housing, and yes, some for recreation and pleasure (unless we are reintroducing slavery), then the tax level ceases to be sustainable and is likely to become retrograde.

I don't dispute that the country is in a desperate financial state, but that was not the focus of my comments. All I am saying is that if a tax level becomes unsustainable, then increased taxes will no longer be the solution to the nation's debt problem. If that occurs then the only alternative, I imagine, would be the Greek solution.

There is another aspect in addition to tax sustainability. That is tax acceptability, where a point is reached when the public no longer are prepared to accept increasing taxes. That point can be extended by honest and open government, with the issues clearly explained to the electorate without bullying and without threats. Get the people to row in behind the policy and regularly review it publicly to take any opportunities to make reductions as time goes on and conditions improve. I believe that the current government has singularly failed to do that. What FG and Labour have succeeded in doing is to get the people's backs up by lying, spinning, threatening, and bullying without ever changing their own lifestyles.

creedp · 19-04-2012 11:52am

ART6 wrote: »

I believe that the current government has singularly failed to do that. What FG and Labour have succeeded in doing is to get the people's backs up by lying, spinning, threatening, and bullying without ever changing their own lifestyles.

It was great to hear Howlin justifying an additional payment of €17k a year to Jan O'Sullivan becasue she is now a super junior Minister (whatever that means) sitting at cabinet but with no voting powers. Apparently, we have to have these tiered pay rates otherwise the system won't work and anyway Ministers have already sufferred more that anyone when it comes to pay cuts so an additional €17k is just softening the blow!!. Hard to accept this when people for which this increase would represent more than 50 of their salary have to take pay cuts!!

ednwireland · 19-04-2012 12:04pm

ART6 wrote: »

That point can be extended by honest and open government, with the issues clearly explained to the electorate without bullying and without threats. Get the people to row in behind the policy and regularly review it publicly to take any opportunities to make reductions as time goes on and conditions improve. I believe that the current government has singularly failed to do that. What FG and Labour have succeeded in doing is to get the people's backs up by lying, spinning, threatening, and bullying without ever changing their own lifestyles.

best summary of how quickly this gov seems to have turned the same as the rest and so quickly. the prob is they have no wriggle room. so will get turned on much faster, roll on the next elections

ART6 · 19-04-2012 12:19pm

creedp wrote: »

It was great to hear Howlin justifying an additional payment of €17k a year to Jan O'Sullivan becasue she is now a super junior Minister (whatever that means) sitting at cabinet but with no voting powers. Apparently, we have to have these tiered pay rates otherwise the system won't work and anyway Ministers have already sufferred more that anyone when it comes to pay cuts so an additional €17k is just softening the blow!!. Hard to accept this when people for which this increase would represent more than 50 of their salary have to take pay cuts!!

Exactly. And not made easier to bear when we hear that Dr. Reilly has now appointed yet another adviser to his SDU at a salary way in excess of the supposed government pay cap. This in a unit that costs (I understand) some €10 millions a year to run. Does his department not have any civil servants? If it does, what in God's name are they being paid for? Why is he being paid a minister's salary if he needs special advisers all over the place to do his job?

coolwings · 19-04-2012 3:02pm

golfwallah wrote: »

.....The facts show that Ireland ranks very low in terms of tax as % of GDP, ...

Facts? Really?
Do you get your GDP data from the ESRI?
ESRI as a source of Irish economic metrics was compromised by the Irish government a very long time ago, and reliance on their research could be hazardous to your financial health.

Richard Tol, who resigned the ESRI and recently left this country, and was one of five senior research professors who had left over the past number of years, had this to say about ESRI:
"The ESRI lacks independence and is not transparent about funding"
"Not able to carry out certain research - funding not available for some research topics, and funders were directing questions."
The other sources of government information would be funded from the same source too.
Their funding from guess who? Ah yes: the Irish government as managed by a sequence of FF, FG, LAB.

They are all honourable men, as Mark Antony might say, with fingers crossed behind his back and a facial twitch.

One of many sources: http://www.irishtimes.com/newspaper/finance/2012/0102/1224309715732.html

Geuze · 19-04-2012 4:01pm

Latest tax revenue data from Eurostat:

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-12-002/EN/KS-SF-12-002-EN.PDF

Geuze · 19-04-2012 4:02pm

Tax is 29.8% of national income in Irl.

EU average is 40% approx.

Highest is 50% approx.

Lowest is 27.4% of GDP.

Geuze · 19-04-2012 4:12pm

If we adjust for GNP, tax is about 36% of national income.

ardmacha · 19-04-2012 4:29pm

Do you get your GDP data from the ESRI?

GDP is measured by the CSO.

Tax is 29.8% of national income in Irl.

In this period of "austerity" not only lower than other places in the EU but 3-4% lower as a percentage of GNP than in the late 90s, which weren't particularly austere.

If we had a 1990s tax structure and expenditure at real 2005 levels we wouldn't be far off.

Worztron · 10-05-2012 11:40am

I wonder will he have to pay the household charge or will it also be subsidised. :mad:

http://www.politics.ie/forum/fine-gael/187236-health-minister-james-reilly-receiving-tax-breaks-his-mansion.html

http://www.thejournal.ie/minister-and-wife-claim-tax-breaks-on-13-bed-moneygall-mansion-127346-Apr2011/

meglome · 10-05-2012 11:50am

Worztron wrote: »

I wonder will he have to pay the household charge or will it also be subsidised. :mad:

http://www.politics.ie/forum/fine-gael/187236-health-minister-james-reilly-receiving-tax-breaks-his-mansion.html

http://www.thejournal.ie/minister-and-wife-claim-tax-breaks-on-13-bed-moneygall-mansion-127346-Apr2011/

Not seeing the issue. And what has this actually got to do with the household charge?

DoesNotCompute · 10-05-2012 11:55am

Worztron wrote: »

I wonder will he have to pay the household charge or will it also be subsidised. :mad:

Yes, he will pay, as he is liaible, and no it won't be subsidised because there is no clause in the Household Charge legislation that says the HHC for stately homes will be subsidised.

Worztron · 10-05-2012 12:09pm

meglome wrote: »

Not seeing the issue. And what has this actually got to do with the household charge?

Well someone in a tiny cottage is expected to pay the same as this FG royal in his 13 bed abomination.

meglome · 10-05-2012 12:12pm

Worztron wrote: »

Well someone in a tiny cottage is expected to pay the same as this FG royal in his 13 bed abomination.

That wasn't your point, but okay.

Do you support a fully property tax then?

blowtorch · 10-05-2012 7:18pm

Geuze wrote: »

Tax is 29.8% of national income in Irl.

EU average is 40% approx.

Highest is 50% approx.

Lowest is 27.4% of GDP.

Perhaps compare everything....... and rather than comparing the tax people pay in a year, compare the real net income after levies / social charges etc.

What's the EU average of levies? e.g. Levy on Health Insurance here @ € 285 per adult. Levies on other insurances, Levies on Plastic Bags, Universal Social Charge etc.

'VRT' for cars? (The VRT is a replacement for an Excise duty put on motor vehicles, that was introduced to 'protect' the Ford factory in Cork.)

ardmacha · 11-05-2012 6:32pm

blowtorch wrote:

What's the EU average of levies? e.g. Levy on Health Insurance here @ € 285 per adult. Levies on other insurances, Levies on Plastic Bags, Universal Social Charge etc

What's your point here? Are you claiming that these are not included in the 29.8% of national income quoted by Geuze? Do you have a point?

Worztron · 12-05-2012 10:58am

meglome wrote: »

That wasn't your point, but okay.

Do you support a fully property tax then?

No. It will just increase exponentially and will go to pay off debts that the Irish public don't even owe.

Although I'd be in favor of a severe fully property tax on all politicians (past and present) homes.

Icepick · 12-05-2012 11:46am

Worztron wrote: »

No. It will just increase exponentially and will go to pay off debts that the Irish public don't even owe.

Such as?

Worztron · 12-05-2012 3:38pm

Icepick wrote: »

Such as?

Do some research.

meglome · 13-05-2012 11:43pm

Worztron wrote: »

Do some research.

Spell it out for us. Because saying the debt isn't ours won't change the reality that it is.

Worztron · 14-05-2012 8:52am

meglome wrote: »

Spell it out for us. Because saying the debt isn't ours won't change the reality that it is.

Do you seriously think paying back investors that took a risk and lost is just?

Godge · 14-05-2012 9:58am

Worztron wrote: »

Do you seriously think paying back investors that took a risk and lost is just?

Which investors?
How much risk?
What loss?

Geuze · 14-05-2012 10:29am

I am a strong supporter of property taxes, comined with lower marginal income tax rates (52% on 35k is crazy).

I do not support repaying bank senior bondholders. In particular, I feel we should not repay the 30.6 bn in Promissory Notes linked to Anglo and Irish Nationwide.

Good loser · 14-05-2012 10:41am

Geuze wrote: »

I am a strong supporter of property taxes, comined with lower marginal income tax rates (52% on 35k is crazy).

I do not support repaying bank senior bondholders. In particular, I feel we should not repay the 30.6 bn in Promissory Notes linked to Anglo and Irish Nationwide.

We are legally committed to paying them off. The money is owed to the ECB.

Lantus · 14-05-2012 11:12am

The real problem is that the fundementals of the country are broken.

A bloated and career and party driven political elite that put these issues before critical country and people isues. Far to many TD's, paid too much, big pensions and no incentive to achieve as failure just results in having to wait a few years before re-election. No accountability.

An outdated public sector. Far too many quango's doing all much the same job. No value or accountability.

Obscene duplication and inefficiency in county councils (get rid) with serious corruption at the higher levels. Not accountable to anyone.

A system that rewards friends and family and not good decision making. The intelligent and sound of mind are beaten down while a circle of powerful promote their own at the expense of the country.

Finally to top it all off we still have a populace that accepts the will of power and authority without question. From the church to doctors to TD's. People accept without question what authority dictates.

To change our country we must first change ourselves. Otherwise we are doomed to repeat the same mistakes.

meglome · 14-05-2012 11:16am

Worztron wrote: »

Do you seriously think paying back investors that took a risk and lost is just?

Just to add to what Godge said above...

The last government made the bank debt our debt. We don't have to like it but it's done and the original bondholders have been for the most part paid off. The 'bondholders' are now our central bank. How do you suggest we burn our own central bank?

View · 14-05-2012 12:45pm

Worztron wrote: »

Do you seriously think paying back investors that took a risk and lost is just?

What has whether something is "just" got to do with whether something is "ours" or not?

It is whose name that is on the "I.O.U" that counts...

creedp · 14-05-2012 2:04pm

View wrote: »

What has whether something is "just" got to do with whether something is "ours" or not?

It is whose name that is on the "I.O.U" that counts...

Having said all that this is not a legal issue ..its a political one. We didn't sign up to this agreement in the courts we signed up politically. The only solution here is political .....

Farmer Pudsey · 14-05-2012 2:07pm

Godge wrote: »

Which investors?
How much risk?
What loss?

Sean Quinn
Sean Dunne
Treasury Holdings
Liam Carroll
Kelly
Doctors
Dentists
Solicitors ( Byrne and the fella that in Croatia with his wife)
All the Bank Bondholders that were paid in full with intrest rates of 4-5% for loaning money to the banks

These are the investors ,the ordinary Joe Soap that bought a house is going to be pursued to hell and back. I find it intresting that the IMF and EMF are complaining about the new insolvency legislation, I know that it will create issues for the banks but why should Sean Dunne pay for a fancy wedding for his son and not pay back the money he owes.

Worztron · 14-05-2012 3:01pm

Godge wrote: »

Which investors?
How much risk?
What loss?

The UN-guaranteed bond holders.

View · 14-05-2012 5:09pm

creedp wrote: »

Having said all that this is not a legal issue ..its a political one. We didn't sign up to this agreement in the courts we signed up politically. The only solution here is political .....

That might have been true in October 2008 but in the intervening time that political commitment was backed up with legal commitments which we are signed up for.

Arguing that we shouldn't have "broken the eggs" back then is all very well but it doesn't enable you to "unbreak" them now.

Godge · 15-05-2012 12:03am

Worztron wrote: »

The UN-guaranteed bond holders.

Since when did the United Nations guarantee bond-holders?:D:D

What you and some of the others here are missing is that up to 2008, bondholders, depositers and everyone else were only guaranteed up to €100,000. Then an idiot Finance Minister, on the advice of David McWilliams, on behalf of the Irish people, legally removed that cap. Once that decision was made, the genie was out of the bottle. Everything that has happened follows from that stupid decision. There was no way politically or legally to row back on that decision, wishing it were so is an idiot's dream.

ardmacha · 15-05-2012 12:09am

What you and some of the others here are missing is that up to 2008, bondholders, depositers and everyone else were only guaranteed up to €100,000.

Actually I think bondholders weren't guaranteed at all, and depositors only up to €20,000. The idiot Finance Minister guaranteed everything, when increasing the deposit guarantee and new interbank loans was all that was needed.

creedp · 15-05-2012 10:15am

View wrote: »

That might have been true in October 2008 but in the intervening time that political commitment was backed up with legal commitments which we are signed up for.

Arguing that we shouldn't have "broken the eggs" back then is all very well but it doesn't enable you to "unbreak" them now.

I know but isn't is now the issue that most of this debt is held by the ECB as the majority of the disputed bondholders have already ran away with the money. So its up to the ECB to decide what debt is written off. If I'm wrong enlighten me as this is the problem with the media .. easy to confuse oneself

blowtorch · 15-05-2012 10:33am

ardmacha wrote: »

What's your point here? Are you claiming that these are not included in the 29.8% of national income quoted by Geuze? Do you have a point?

Geuze says 'Tax' ..of National income. Quite clear - Tax. If a 'Levy' is a Tax, then why not call it a Tax?

ardmacha · 15-05-2012 11:47am

If a 'Levy' is a Tax, then why not call it a Tax?

The government used makes it revenue from stamp "duty", it now takes in some money in "levies". It makes little difference what you call it and pedantry on the issue is pointless. The main issue is the aggregate level of government revenue in the the economy when compared to other European economies. Contrary to oft expressed opinion here, government in Ireland does not collect a lot of tax, whatsoever called.

View · 15-05-2012 1:48pm

creedp wrote: »

I know but isn't is now the issue that most of this debt is held by the ECB as the majority of the disputed bondholders have already ran away with the money. So its up to the ECB to decide what debt is written off. If I'm wrong enlighten me as this is the problem with the media .. easy to confuse oneself

I am not certain about this but I don't think that is the case.

My understanding about it is that, while the ECB certainly has provided considerable extra-ordinary assistance to the banks to shore up their balance sheets, the bonds themselves have been paid directly by our government using monies borrowed by them (but not from the ECB). I guess that as the banks approach operating normally again the ECB position in them will be gradually unwound over time.

Madbod · 15-05-2012 5:03pm

blowtorch wrote: »

Geuze says 'Tax' ..of National income. Quite clear - Tax. If a 'Levy' is a Tax, then why not call it a Tax?

'levy' sounds better

Welease · 15-05-2012 5:10pm

Madbod wrote: »

'levy' sounds better

It also allows the Government to keep their promise of no increases to income tax..

Icepick · 15-05-2012 5:27pm

Worztron wrote: »

Do you seriously think paying back investors that took a risk and lost is just?

It is unjust to people who did not cause it. But that does not mean that we can now refuse to pay it without consequences.

ART6 · 16-05-2012 4:09pm

A sign Mr. Hogan?

"Nah. You will pay. I know where you live!"

http://ftalphaville.ft.com/blog/2012/05/15/1000971/greece-when-the-lights-go-out/?ftcamp=traffic/email/content/booster//memmkt

Good loser · 16-05-2012 10:15pm

ardmacha wrote: »

Actually I think bondholders weren't guaranteed at all, and depositors only up to €20,000. The idiot Finance Minister guaranteed everything, when increasing the deposit guarantee and new interbank loans was all that was needed.

They may not have been 'guaranteed'. The EU/ECB however insisted, and were always going to insist, that we not let any of our banks default on their senior bonds regardless of what happened these banks i.e.the Govt was obliged to pay the bonds if the banks didn't - which is what happened!
The EU could insisit on this as when the Euro was set up the major political decision was taken that each country had to police its own banks.
Our regulatory failure to do so was yet another example of public service ineptitude. The consequences are severe.

ardmacha · 16-05-2012 11:55pm

The regulatory failure was a consequence of government policy. However, we rolled over too easily at that time by guaranteeing everything.

Good loser · 17-05-2012 1:07am

ardmacha wrote: »

The regulatory failure was a consequence of government policy.

Not so.

The Financial Regulator had, I believe, 500 or 600 staff. He was an independent State employee.

creedp · 17-05-2012 10:16am

Good loser wrote: »

Not so.

The Financial Regulator had, I believe, 500 or 600 staff. He was an independent State employee.

I think this could be the subject of a good debate! Sometime in the future .. probably pretty distant future .. a lot of this stuff will come out in the wash. Not that this will change anything but it would be interesting to know what really happenned. No point listening to politicians as they are incapable of telling the truth .. its media spin that has been the true policy success over recent times and it ain't going away ..

ardmacha · 17-05-2012 5:23pm

Not so.

The Financial Regulator had, I believe, 500 or 600 staff. He was an independent State employee.

Are you saying that it was government policy to reduce lending by banks?
Quite the reverse. it is total nonsense to claim that the Financial Regulator's office was instructed by the government to tighten things up and that they failed to do it through inefficiency. The reports have shown that concerns were raised in the office, but ignored at the top level.

Good loser · 17-05-2012 9:24pm

ardmacha wrote: »

Are you saying that it was government policy to reduce lending by banks?
Quite the reverse. it is total nonsense to claim that the Financial Regulator's office was instructed by the government to tighten things up and that they failed to do it through inefficiency. The reports have shown that concerns were raised in the office, but ignored at the top level.

No - to your question.

The Financial Regulator was under no obligation to take instructions from the Govt.

His job was to police/control the banking sector. That's what independent means.

Worztron · 22-05-2012 3:35pm

DoesNotCompute wrote: »

Yes, he will pay, as he is liaible, and no it won't be subsidised because there is no clause in the Household Charge legislation that says the HHC for stately homes will be subsidised.

I don't think Reilly will have to pay the household charge since he is living (the life of Riley) in a listed building.

Household charge

Comments