The Budget

Cork

About a month to go to the Budget.

I think the government needs to leave tax rates unchanged & to increase personal allowances.

Tax shelters like car parks, hotels & horses to stay.

Tax Shelters like film industry & artiests to go.

Vat to remain unchanged.

Excise dutys to increase for fags by say 50c

Childens Allowances to be taxed.

Property tax to be brought in for holiday homes.

PRSI for non monetary work benefits.

OAP to be increased by 20%.

These are just my ideas.

valor

whats the point in taxing childrens allowances? isnt that the government giving parents money? so taxing it would be just taking back money they just gave you..makes sense.

sceptre

Originally posted by Cork
About a month to go to the Budget.

I think the government needs...

I think the government needs a minister for finance who can take X from Y without ending up with Z equalling negative 1,500,000,000 like it did this year.

What I'm suggesting might seem like an odd idea but it's one that might have a future. Or at least provide a future for anyone who didn't vote themselves a 25% pay rise.

daveg

Originally posted by Cork


Childens Allowances to be taxed.

This would be extremely harsh as there is no tax releif at present for childcare. When you consider it costs approx €400-€500 per month in the west (god knows for Dublin) for creche facilities.

Cork

Originally posted by sceptre


What I'm suggesting might seem like an odd idea but it's one that might have a future. Or at least provide a future for anyone who didn't vote themselves a 25% pay rise.

Benchmarking. THis was part of the social partnership agreement. It was supported by all social partners who signed up to the agreement and it benefited 1000s of public sector workers.

The tax on childrens allowance would make it more of an instrument to target it at those who need it more.

Childcare - I would give extra tax credits for stay at home parents.

I would also tax hoarding of development land - this is being examined presently.

Agent Smith

just wondering......



is it too early to start the entire " if fag's go up then i'm quitting Smoking" or the "if booze goes up then i'm quitting drinking" ?

daveg

Originally posted by Cork


Childcare - I would give extra tax credits for stay at home parents.

That would be quite a turnaround after the goverment gave incentives to get both parents out to work only a few years ago due to labour shortages.

Sleipnir

Originally posted by Cork
Childcare - I would give extra tax credits for stay at home parents.

That's ridiculous. What about those with a mortgage exceeding 1000 euro a month? Extra tax credits would not be enough BY A LONG, LONNNNNNNGGGGGG WAY!
How do you tax "stay at home" parents seeing as they don't earn?
Do you mean tax credits for the person in the family who is earning? How would this work, means testing?
They would have to be substantial credits to make up for the loss of an entire salary.

A tax on childrens allowance? How about a tax on the pension and the dole too?

- Increase tax on Cigarrettes by at least 50c.

- Increase betting tax (Charlie lowered this the last time and got rid of the First-time Buyer's grant. The money lost from lowering the betting tax would have covered FTBG for this year! But then, the gee-gee's are close to aul Charlie's heart)


"This would be extremely harsh as there is no tax releif at present for childcare. When you consider it costs approx €400-€500 per month in the west (god knows for Dublin) for creche facilities."

It's around €900 per child per month in Dublin at the moment.

Victor

Tax side:

Tax relief of childcare would simply push up the cost of childcare (although this rise would bring more providers into the market). What is needed is supply side measures where the state directly or indirectly provides crèches and after-school care (hey primary school teacher want to make money for sitting around all afternoon?).

Otherwise tax the old reliables to bring them closer to British rates.

Make BIK taxable on gross, not nett. Currently if you get a €2,000 holiday from your employer, you are taxed (no PRSI) on €2,000, whereas it would have cost you circa €3,000 gross to afford that holiday. In effect, kill the BIK industry.

Tax workplace parking as BIK at rates appropriate to the locality.

Tax college grants and fees. Offset this by raising maintenance grants closer to social security payments.

Originally posted by Kananga
A tax on childrens allowance? How about a tax on the pension and the dole too?

Pensions are already taxed, as are many benefits, e.g. Disability Benefit. If you are only getting the dole you are unlikely to be exceeding your tax credits. Why should someone on €50,000 get the same child benefit as someone with no income?

Originally posted by Kananga
- Increase betting tax (Charlie lowered this the last time and got rid of the First-time Buyer's grant. The money lost from lowering the betting tax would have covered FTBG for this year! But then, the gee-gee's are close to aul Charlie's heart)

I would tax the entire sporting industry at comparable rates to the rest of the economy.


Benefits side:

Increase benefits marginally above basic cost of living index (not CPI).

Raise college raising maintenance grants closer to rates of social security payments.


Spending side:

Control spending to that, which is needed in the economy and society. Needs, not “wants”.

daveg

Originally posted by Victor

Tax relief of childcare would simply push up the cost of childcare (although this rise would bring more providers into the market). What is needed is supply side measures where the state directly or indirectly provides crèches and after-school care (hey primary school teacher want to make money for sitting around all afternoon?).

Victor what makes you think child care costs would rise if tax relief were given on childcare? Did house prices rise when tax relief was given on morgage repayments?

Victor

Originally posted by daveg
Victor what makes you think child care costs would rise if tax relief were given on childcare? Did house prices rise when tax relief was given on morgage repayments?

Yes.

Q. Why do you think tax relief is given to things?
A. To increase supply by subsidising cost.

The film industry might not like this article:

http://home.eircom.net/content/irelandcom/topstories/1887675?view=Eircomnet

Revenue audit of film tax relief exposes €17m problem
From:ireland.com
Thursday, 6th November, 2003

The Revenue Commissioners may seek to claw back €17 million from individuals who invested in films after discovering 30 projects did not comply with tax legislation.

Ms Muriel Hinch, principal officer of the Revenue's direct taxes branch, told an Oireachtas joint committee yesterday that an audit of the tax relief for film investments had uncovered 30 projects that did not comply with the law. She said the cases involved €17 million in uncollected tax. Ms Hinch added that, in one case, the Revenue found some of the money involved ended up in a "tax haven", where she said a bank held a charge over it.

She calculated the overall non-compliance uncovered by her inquiry at 6.4 per cent. Government figures show the tax break has cost the Exchequer €265 million over the last 10 years, of which €17 million is equivalent to 6.4 per cent.

Ms Hinch told the Oireachtas Joint Committee on Finance and the Public Service that the Revenue had several concerns regarding the tax break. She said the scheme required specific levels of expenditure on Irish goods and services but her investigations found the firms involved used "complicated structures" involving sub-contracting at different levels. "It's very hard to track down the level of expenditure and to find out what exactly is Irish expenditure," she said. "A large proportion of Irish expenditure ended up in tax havens."

Asked by Labour deputy Ms Joan Burton if she was talking about events in the past, Ms Hinch said: "No, I am talking about the present."

She warned that more needed to be done to cut the risk of abuse in the areas that she specified.

The tax official did not confirm that the Revenue was pursuing the investors. But it is understood that they are in the same position as those who evaded deposit interest retention tax (DIRT) by placing their money in bogus non-resident accounts. The Revenue is pursuing those individuals for the money due.

The Minister for Finance, Mr McCreevy, announced in last year's budget that the tax break would not be extended beyond the end of next year. The Irish film industry has opposed this, arguing that the move will effectively kill the sector.

Industry bodies yesterday told the committee that, if the relief was not extended, large-scale Hollywood productions would go to competing countries like Britain, Australia and New Zealand.

Section 481 of the Taxes Consolidation Act, 1997 governs the relief. It allows taxpayers to invest up to €31,750 in individual projects, and to claim relief subsequently on 80 per cent of this at the marginal income tax rate of 42 per cent.

Mr McCreevy recently approved new guidelines for certifying investments in film production as being eligible for the Section 481 relief. These specifically exclude projects which channel the funds through tax havens, or where part of the overall investment originates in one of these jurisdictions.

Victor

McCreevy comments

http://home.eircom.net/content/irelandcom/breaking/1889817?view=Eircomnet

McCreevy to get tough on infrastructure cost overruns
From:ireland.com
Thursday, 6th November, 2003

Public spending, particularly on infrastructure projects, must be kept under firm control, the Minister for Finance, Mr McCreevy, warned today.

Giving the clearest hint to date of his plans for next month's Budget, Mr McCreevy said he would focus particularly on competitiveness in the economy while maintaining the present taxation and long-term fiscal strategy.

"Cost containment in the private and public sector is vital," he said.

He said the downturn in Exchequer returns must be matched by a slower rate of growth in spending on public services.

"In 2001 spending increased by 23 per cent and in 2002 by a further 14 per cent. This year spending has been limited to an increase of 7 per cent and we have to continue on this path," he continued.

He said the Cabinet would consider last week's Economic and Social Research Institute (ESRI) report that recommended considerable changes in the emphasis and substance of the National Development Plan (NDP).

The report was not well received by the biggest-spending Ministers who are in the process the usual pre-Budget lobbying of Mr McCreevy for cash for their respective departments.

The Minster today said the ESRI report had raised "serious issues" in relation to the implementation of the NDP, "particularly the persistent divergence between project cost estimates and outturn costs".

Speaking at the Construction Industry Federation (CIF) conference, Mr McCreevy warned that massive cost overruns in infrastructure projects, strongly criticised last week by ESRI, would no longer be tolerated.

He said the State was the construction industry's biggest customer and that they must deliver better value. He asked CIF members to consider whether private clients would tolerate "lots of further increases" after a contract price had been agreed.

"I am not willing to continue with the current regime," he scolded. He would accord priority to infrastructure investment but would follow a cautious borrowing policy, he said.

Next month's Budget would be strategic, not "populist" or "short-term", and his taxation strategy and long-term planning in the shape - particularly of the National Pension Reserve Fund and easing of the debt-burden - would continue, he added.

Victor

Originally posted by Victor
Q. Why do you think tax relief is given to things?
A. To increase supply by subsidising cost.

http://www.sbpost.ie/web/DocumentView/did-17215190-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews.asp

OECD: end mortgage interest relief

26/10/03 00:00

By Eamon Quinn
Minister for Finance Charlie McCreevy should begin dismantling housing mortgage interest reliefs which cost the exchequer €210 million a year, according to the Organisation for Economic Co-operation and Development (OECD).

In a report to be published before the December budget, the OECD will argue the reliefs are contributing to housing inflation by helping to stoke demand for property.

Ireland is one of the few countries in the world that lavishes tax reliefs on property purchases. Changes to mortgage reliefs in last year's budget added €8 million to the overall exchequer cost, ac-cording to figures from the Revenue Commissioners.

A married person with a €300,000 home loan can receive cash relief of over €100 a month.

Paul van den Noord, the Irish desk economist at the OECD, said it recognised that the move could cause a political storm. "But a stimulus to housing demand from tax incentives may be counter-productive," he said.

The OECD will warn that the government's "policy mix" in relation to mortgage interest reliefs and supports for the housing market are in conflict.

The organisation will also be keeping a "watching brief" on price increases sanctioned by Irish service providers sheltered from international competition, will re-examine government grocery orders banning below-cost selling and will focus on regulations which limit the size of stores.

Vanden Noord said that pressure on Irish finances was mounting, due to ballooning healthcare spending.

Cork

I think tax breaks on the film industry need to go.

Hollywood Film studios can well afford to pay major stars - giving tax breaks to such films is a bit of a nonsense.

star gazer

Tax breaks are given to the film industry because without them the big budget fims wouldn't get made here. Most of Europe has systems of tax breaks for movies hollywood bosses can afford to pay the extra, but why would when they can get it cheaper elsewhere. They will shop around.

Abolish PRSI, replace it with higher income tax rate. It would be fairer.

Cork

Your PRSI comment is a good idea.

But - If we have a well trained work force in our film industry - films will be made.

Box Office Success will finance film - not the Irish taxpayer.