Broadening the tax base

Hellm0

Howdy yall,
Was reading some reports of the new emergency budget being put in place in April and was wondering, how exactly do we increase tax income whilst remaining competitive internationally. I have been reading a very good book recently,"How rich countries got rich and why poor countries stay poor" by Erik S. Reinert, and it gave me the idea that perhaps we could use Tariffs.

As most of us know, the low corporation taxes in Ireland are a significant draw for international business looking to establish themselves in Europe. The foreign direct investment of these businesses is a significant factor in the long term growth of Ireland, and we cannot risk the loss of tax revenue these guys generate.

That said, we could create incentives to increase manufacturing and industry in Ireland, such as implementing export tariffs on products that use less than a certain percentage of Irish labor or materials. Nothing punitive just enough to make it worthwhile to consider investing in local resources. I have worked with companies who are essentially shell operations, fully manufactured products come in from outside the country, they are stamped and then they are shipped right back outside the country. These kinds of activities, although slightly profitable from a tax perspective, are useless to us in the long term. Lets make it profitable to BUILD something here!!

Anyone else any ideas for potentially beneficial tax incentives or governmental policy?

H.

Sleepy

Well, the tarriffs couldn't be applied to anything being exported to the EU region which is where the majority of our exports are sold AFAIK so that wouldn't work. Incentives for producing things in Ireland for export would be beneficial though if they could be implemented without breaking EU agreements...

The issue I was thinking of was an examination of the possibility of rendering unions illegal but it would require that our TD's grew spines and cross-party support from FF & FG at the very least...

Permabear

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thebman

One of the first things that should be done is to privatise loss making services like public transport that could be run profitably by private companies.

You could easily create a system where they would need a license to operate and that it be granted free of charge to services running on routes will below a certain number of passengers. If a company does not want to do this, they can buy their way out of it and the money can be used to help compensate those operators running loss making services. The current government subsidy could then be reduced and used to compensate the loss making routes.

Private companies would prefer to see these routes profit as then they'll make a profit as opposed to breakin even off government compensation so it would pay them to get these routes profitable if they could.

This would make it more efficient than the Dublin Bus model which seems to be, "hey look a pit, lets throw our money in there and burn it."

We should definitely privatise Irish Rail to but hold on to the network. The private trains operating will have to contribute to the maintineance of the lines. This way, lines stay safe but we get competition on routes, more services with multiple companies and more jobs with more trains running.

I don't see the logic to leaving these services public other than, union interference. Well I didn't vote for the unions or the employees of these companies. If it will be better to privatise these then privatise them.

Of course, it is arguable whether FF can do this right given the absolute failure they made of privatising eircom who got a state monopoly, unionised workers and are still going bankrupt as a result. The model of state monopoly and unionised workers clearly isn't working in infrastructure and transport so why keep doing it?

Hellm0

thebman wrote: »

One of the first things that should be done is to privatise loss making services like public transport that could be run profitably by private companies.

You could easily create a system where they would need a license to operate and that it be granted free of charge to services running on routes will below a certain number of passengers. If a company does not want to do this, they can buy their way out of it and the money can be used to help compensate those operators running loss making services. The current government subsidy could then be reduced and used to compensate the loss making routes.

Private companies would prefer to see these routes profit as then they'll make a profit as opposed to breakin even off government compensation so it would pay them to get these routes profitable if they could.

This would make it more efficient than the Dublin Bus model which seems to be, "hey look a pit, lets throw our money in there and burn it."

We should definitely privatise Irish Rail to but hold on to the network. The private trains operating will have to contribute to the maintineance of the lines. This way, lines stay safe but we get competition on routes, more services with multiple companies and more jobs with more trains running.

I don't see the logic to leaving these services public other than, union interference. Well I didn't vote for the unions or the employees of these companies. If it will be better to privatise these then privatise them.

Of course, it is arguable whether FF can do this right given the absolute failure they made of privatising eircom who got a state monopoly, unionised workers and are still going bankrupt as a result. The model of state monopoly and unionised workers clearly isn't working in infrastructure and transport so why keep doing it?

Whilst I agree that Dublin bus is probably the worst run company on the face of the planet I am very wary of the "P" word. I like where you are going with the idea of retaining the railway infrastructure and would have no problem with that however as you mentioned the debacle of Eircom should stand as a warning of just how shady our government is when it comes to handing public money over to their friends in the private sector. My only fear is that something similar would occur.

Of course this is really a question of policy anyway, transport is one thing but we could never abandon public healthcare and risk endangering our status as a knowledge economy if we abandon free/subsidized education (however many arguments you put against it, more education never hurt anybody). Privatization, along with deregulation, is a key component of neo liberal and free trade ideologies which I think have been blatantly shown to cause the economic disaster we face today. We should not fill in one hole by digging another.

My real question however was how may we create incentive's for the growth of industry in Ireland today using what freedoms we have left in terms of economic, tax or trade policy. Lowering taxes on anybody seems out of the question right now, the real question is in what way may we raise taxes to our best advantage. Right now Ireland seems like quite an unstable or risky investment internationally, at least a coherent and viable raise in taxes or other sources of revenue(IE patriot bonds) will, in some way, show that we are dealing with the problem.

thebman

Hellm0 wrote: »

Whilst I agree that Dublin bus is probably the worst run company on the face of the planet I am very wary of the "P" word. I like where you are going with the idea of retaining the railway infrastructure and would have no problem with that however as you mentioned the debacle of Eircom should stand as a warning of just how shady our government is when it comes to handing public money over to their friends in the private sector. My only fear is that something similar would occur.

Of course this is really a question of policy anyway, transport is one thing but we could never abandon public healthcare and risk endangering our status as a knowledge economy if we abandon free/subsidized education (however many arguments you put against it, more education never hurt anybody). Privatization, along with deregulation, is a key component of neo liberal and free trade ideologies which I think have been blatantly shown to cause the economic disaster we face today. We should not fill in one hole by digging another.

My real question however was how may we create incentive's for the growth of industry in Ireland today using what freedoms we have left in terms of economic, tax or trade policy. Lowering taxes on anybody seems out of the question right now, the real question is in what way may we raise taxes to our best advantage. Right now Ireland seems like quite an unstable or risky investment internationally, at least a coherent and viable raise in taxes or other sources of revenue(IE patriot bonds) will, in some way, show that we are dealing with the problem.

Oh yeah I wasn't suggest we lower taxes or anything. This is just to reduce the public service and we'll probably end up with more employment too which would be a win-win situation.

Currently private businesses are reducing prices to survive and encourage people to use their services (mostly). The largest exception to this rule is the public sector which has been putting up prices :eek:

Irish Rail have put up ticket prices and are now charging for parking. Dublin Bus have put up prices and passenger numbers are continually decreasing so the current model just doesn't work and we are subsidising these companies that can run privately.

By privatising them, we could encourage people to use them by reduced prices and better services and more people using them means we'll have less carbon tax type crap to pay in the future which we need to work towards.

The government would shed the subsidies that we have to put into these organisations so it would help the public purses too. I think it would send a very good message to people wanting to invest in Ireland that we are reorganising the public services to reduce our budget deficit and that we are turning to the private sector and business to help us to that meaning more opportunities for them in Ireland.

greendom

Any attempt to impose export duties will ensure a swift response from the affected country(ies) and could lead to all out trade war(s). Not really something we need at the moment

The Irish economy seems to be sinking so badly that the last thing it needs is any increase in tax. Talk about flogging a dead horse. On the other hand public finances are in such a mess that the government has to increase its revenue.

I don't have an answer unfortunately but I believe now is not the time to be increasing taxes in a major way. I think public debt should be allowed to increase until we enter some kind of recovery phase when the economy would be better able to handle it. It's not ideal I know but I don't think we should be crippling the economy still further

thebman

greendom wrote: »

Any attempt to impose export duties will ensure a swift response from the affected country(ies) and could lead to all out trade war(s). Not really something we need at the moment

The Irish economy seems to be sinking so badly that the last thing it needs is any increase in tax. Talk about flogging a dead horse. On the other hand public finances are in such a mess that the government has to increase its revenue.

Agree with this part.

I don't have an answer unfortunately but I believe now is not the time to be increasing taxes in a major way. I think public debt should be allowed to increase until we enter some kind of recovery phase when the economy would be better able to handle it. It's not ideal I know but I don't think we should be crippling the economy still further

People won't lend to us until we show we will actually be able to afford these debts though and we have to get our house in order first. Ireland can get loans at the moment to cover our debt. That is quite serious.

This is why I suggest raising taxes and privatising what we can of the public sector to reduce its costs. Some things in the public sector are losing money that could be privatised and make a profit. It seems insane to leave them public given the state of public finances.

NewDubliner

thebman wrote: »

Dublin Bus have put up prices and passenger numbers are continually decreasing so the current model just doesn't work and we are subsidising these companies that can run privately.

Numbers are decreasing because less people are working.
To get buses running efficiently and on time, we have to put private cars off the road. Curbs on road usage and the provision of workplace parking will be needed. That gets our carbon footprint down and rewards people who live close to their places of work.

By tackiing the problem of road space inefficiency directly, we won't need to incentivise people with tax reliefs on tickets or subsidies to transport operators.

Road charging will just feed into increased costs as people just won't give up the luxury of driving to work.

greendom

My concern about the privatisation of Dublin Bus is the valuable service it provides to the Dublin economy and how this will be impacted by private companies seeking to maximise profits.

We all know how poor the infrastructure of the city is compared to others. Making it worse will cause great harm in the long term

It has potential though if managed correctly

NewDubliner

greendom wrote: »

My concern about the privatisation of Dublin Bus is the valuable service it provides to the Dublin economy and how this will be impacted by private companies seeking to maximise profits.

There is a risk of an 'Eircom' like solution.

greendom wrote: »

We all know how poor the infrastructure of the city is compared to others.

Planning needs to be biased towards high-density accomodation within walking/cycling distance of amenities, services and centres of employment. In PS terms, this means reversing the totally wrong-headed decentralisation project. In private sector terms, it means avoiding sponsoring isolated, one-off factories outside of small towns.

Lockstep

donegalfella wrote: »

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Do these always work though?

Bush giving out massive tax cuts and still turning a large budget surplus into a deficit by the end of his first term in office for example.

NewDubliner

kickoutthejams wrote: »

Do these always work though?
Bush giving out massive tax cuts and still turning a large budget surplus into a deficit by the end of his first term in office for example.

It depends on what people do with the extra money. If then spend it on foreign imports, cars, overpriced houses or foreign holidays, that's bad. If they demand less wages or invest the money in productive activities, that's good.

The trick is to find a way to ensure that individuals make choices that are good for the economy.

Lockstep

NewDubliner wrote: »

It depends on what people do with the extra money. If then spend it on foreign imports, cars, overpriced houses or foreign holidays, that's bad. If they demand less wages or invest the money in productive activities, that's good.

The trick is to find a way to ensure that individuals make choices that are good for the economy.

How can a state ensure individuals spend their money a certain way?

The state can do it's business with my taxes, the remainder isn't something the state is able to dictating I spend.

cavedave

NewDubliner

To get buses running efficiently and on time, we have to put private cars off the road. Curbs on road usage and the provision of workplace parking will be needed. That gets our carbon footprint down and rewards people who live close to their places of work.

By tackiing the problem of road space inefficiency directly, we won't need to incentivise people with tax reliefs on tickets or subsidies to transport operators.

While on the Communist line of reasoning why not go whole hog Cuban style? Make it illegal not to pick up hitchhikers (even cuba don't do this). Then you could do away with dublin bus overnight. Traffic would be much less so you'd save massive amounts of carbon and everyones commute would be cut down.