PAYE Increases?

Dannyboy83

Now that we are more aware of the scale of the bailouts aswell as the calamity in our state finances, I was wondering if we have a better understanding of what is going to happen at the next budget?

e.g.
5% increase on the lower tax band
8% increase on the upper tax band
8% reduction for all public servants

Any takers?

dean21

Goverement to fall before budget 3/2 on

hinault

I doubt that there will be any increase in direct taxes like PAYE.

There is no room to increase tax rates because the tax base is getting smaller through unemployment and emigration.

I would think that the govt will look to expand the taxbase, if anything.

Dannyboy83

hinault wrote: »

I doubt that there will be any increase in direct taxes like PAYE.

There is no room to increase tax rates because the tax base is getting smaller through unemployment and emigration.

I would think that the govt will look to expand the taxbase, if anything.

But doesn't expanding the taxbase simply mean that lower earners will be able to claim social, thereby defeating the purpose?
And the returns on an expanded tax base will be minimal anyway.

British graph I know, but same point

I think of the €33bln net income, income tax only accounts for €8 or €9 billion.
Unless they are prepared to completely slash and burn through government spending, I don't see how direct increases can be avoided.
And they don't seem to be prepared for slashing & burning.

So is the plan to just keep borrowing?

Zamboni

Dannyboy83 wrote: »

So is the plan to just keep borrowing?

It has always been the plan.

Get elected
Grab whatever perks, salary, expense you can
Keep borrowing for PS
Don't get re-elected
Let the next lot deal with it.

hinault

Dannyboy83 wrote: »

But doesn't expanding the taxbase simply mean that lower earners will be able to claim social, thereby defeating the purpose?
And the returns on an expanded tax base will be minimal anyway.

British graph I know, but same point

I think of the €33bln net income, income tax only accounts for €8 or €9 billion.
Unless they are prepared to completely slash and burn through government spending, I don't see how direct increases can be avoided.
And they don't seem to be prepared for slashing & burning.

So is the plan to just keep borrowing?

You increase the tax burden in a contracting taxbase?

The issues which plagued our little nation back in the 1980's and which led to widespread tax evasion and tax avoidance, was punative taxes.

Riskymove

Dannyboy83 wrote: »

But doesn't expanding the taxbase simply mean that lower earners will be able to claim social, thereby defeating the purpose?

sorry what do you mean about claiming social?

Unless they are prepared to completely slash and burn through government spending, I don't see how direct increases can be avoided.
And they don't seem to be prepared for slashing & burning.

So is the plan to just keep borrowing?

expanding the base will mean minimal returns but some none the less

while I cannot see increases in PAYE either I would expect changes in other forms of taxation

for a start, they have indicated that PRSI and the health levies etc will be amalgamated in some new form of social insurance payment

you can also expect water charges and a property tax to be at least flagged for implementation in near future

Dannyboy83

Zamboni wrote: »

It has always been the plan.

But we can only borrow to a point and I think that point is probably before 2012.

I don't think the ECB will allow it to happen.

Dannyboy83

hinault wrote: »

You increase the tax burden in a contracting taxbase?

The issues which plagued our little nation back in the 1980's and which led to widespread tax evasion and tax avoidance, was punative taxes.

I know.

I'm not in favour of it, I think it's utterly idiotic.
That's precisely why I'm expecting it.

Dannyboy83

Riskymove wrote: »

sorry what do you mean about claiming social?

Apparently a number of civil servants are now paid so low (post 09 pay cut) that they qualify for some type of social payments.

expanding the base will mean minimal returns but some none the less

while I cannot see increases in PAYE either I would expect changes in other forms of taxation

for a start, they have indicated that PRSI and the health levies etc will be amalgamated in some new form of social insurance payment

you can also expect water charges and a property tax to be at least flagged for implementation in near future

Heard about the social insurance payment - I don't think this is an increase tho, just an amalgamation.

I thought the property tax was already brought in last year.
Do you mean on primary residences also?

Yea, the water tax is a potential earner for them alrite.

Riskymove

Dannyboy83 wrote: »

Apparently a number of civil servants are now paid so low (post 09 pay cut) that they qualify for some type of social payments.

ok, low paid people qualify for some social payments but how would expanding the tax base lead to more people qualifying?

Heard about the social insurance payment - I don't think this is an increase tho, just an amalgamation.

you reckon?

Do you mean on primary residences also?

yes

Dannyboy83

Riskymove wrote: »

ok, low paid people qualify for some social payments but how would expanding the tax base lead to more people qualifying?

Expanding the tax base = bringing in the 40% of low earners who don't pay tax.
Now that 40% of low earners are paying tax, their net income is reduced below a threshold, so they will qualify under the various means tests for assistance.
Money in<=Money out

This is what I was told had happened to a number of low grade civil servants.

Riskymove

Dannyboy83 wrote: »

Expanding the tax base = bringing in the 40% of low earners who don't pay tax.
Now that 40% of low earners are paying tax, their net income is reduced below a threshold, so they will qualify under the various means tests for assistance.
Money in<=Money out

This is what I was told had happened to a number of low grade civil servants.

I would have thought that means-tests were based on gross income not net

the PS paycut would have reduced gross pay

Dannyboy83

Riskymove wrote: »

I would have thought that means-tests were based on gross income not net

the PS paycut would have reduced gross pay

For JSA, yes.
For whatever they were able to avail of, I don't think so - but not sure.
I think it was some kind of "family supplement", based on their net income and hours worked.
This is what they told me.

Regardless, if all PS servants take another 8% cut, that will just push more under the treshhold.

I'm wondering where is the 'extra' money required going to come from?

The_Honeybadger

Riskymove wrote: »

I would have thought that means-tests were based on gross income not net

the PS paycut would have reduced gross pay

That particular allowance, family income supplement is based on net take home income, so it is possible that some people have fallen below the threshold and are receiving the payment as a result of the paycuts / levies.

Dannyboy83

mickeyk wrote: »

That particular allowance, family income supplement is based on net take home income, so it is possible that some people have fallen below the threshold and are receiving the payment as a result of the paycuts / levies.

Thank you, that's the one.
Link here: http://www.citizensinformation.ie/categories/social-welfare/social-welfare-payments/social-welfare-payments-to-families-and-children/family_income_supplement

Riskymove

Dannyboy83 wrote: »

Regardless, if all PS servants take another 8% cut, that will just push more under the treshhold.

I'm wondering where is the 'extra' money required going to come from?

Its not all about 'extra' money its mostly about reduced expenditure

btw moving more people into the higher bracket will not result in the welfare schemes you mention

Dannyboy83

Riskymove wrote: »

Its not all about 'extra' money its mostly about reduced expenditure

So are you saying that we don't need to find extra money?
Are we deluding ourselves a bit here?

We're supposed to pursuing an austerity policy.
But now we have all these loans and various bailouts to pay for, so even if we reduce expenditure massively, by 25billion, so that our state expenditure matches our income, we will still need extra money to pay for the loans, bailouts and interest on money borrowed.

Even in the best case, most ridiculously optimistic scenario, we need extra money and lots of it.

I'm expecting that Joe Bloggs will pay through the nose at the next budget.
I don't know where else they can get the kind of money necessary from.

scr123

Up until the start of the boom every government in every Budget gave with one hand and took back with the other hand. The boom allowed us to hang on to more money. The boom crashed and now the government wants its money back rapidly ! The government of whatever hue will increase taxes old and new, including PAYE if necessary, to to come close as possible to a balance Budget. Lets live in the real world for a while and maybe take a stroll down memory lane to VAT rate of 35%, lower tax rate of 35% and think I am right in saying 65% marginal rate

Riskymove

Dannyboy83 wrote: »

So are you saying that we don't need to find extra money?
Are we deluding ourselves a bit here?

that's quite a leap, I am saying nothing of the sort

my point is that we wont be getting much from PAYE increases, experience has shown us that

Even in the best case, most ridiculously optimistic scenario, we need extra money and lots of it.

absolutely but it wont be from PAYE unless there is a sudden increase in employment

I'm expecting that Joe Bloggs will pay through the nose at the next budget.
I don't know where else they can get the kind of money necessary from.

again i agree but just not about PAYE increases

dean21

Dannyboy83 wrote: »

Riskymove wrote: »

Apparently a number of civil servants are now paid so low (post 09 pay cut) that they qualify for some type of social payments.






Heard about the social insurance payment - I don't think this is an increase tho, just an amalgamation.

I thought the property tax was already brought in last year.
Do you mean on primary residences also?

Yea, the water tax is a potential earner for them alrite.

Correct Danny
Lower paid civil servants are now getting the medical card and some are getting Family income support
Well done FF by protecting the rich you have but more on welfare

OMD

dean21 wrote: »

Correct Danny
Lower paid civil servants are now getting the medical card and some are getting Family income support
Well done FF by protecting the rich you have but more on welfare

The pay cuts for lower paid civil servants resulted in a reduction in takehome pay of less than 40c a day. This would not have entitled them to medical card and FIS unless there was other changes also.

WalterMitty

im currently on social welfare. 200 a week is too much. it should eb reduced to 150 or less. Im lucky to be in my twenties and living at home. A special hardship fund could be set up for those really needign more than 150 a week to subsist. Our public pension is also more than double the uk one but our FF chancers wont lower it as the old people will turn further against them. Having been on social welfare and seeing the cost of living falling a lot i feel i can say 200 is too much for most people . I could easily subsist on 100eur a week. Anyone who has lost job recently and is in danger of losing home should of course be helped along with other hardship cases but social welfare is just too generous given the poor state of the economy. It can easily be a career choice for many nowadays and is for many i have seen( check the decent cars and satelitte dishes outside sociall housing and the business of the pubs and bookies in these social housing areas.).

hinault

Dannyboy83 wrote: »

Expanding the tax base = bringing in the 40% of low earners who don't pay tax.
Now that 40% of low earners are paying tax, their net income is reduced below a threshold, so they will qualify under the various means tests for assistance.
Money in<=Money out

This is what I was told had happened to a number of low grade civil servants.

Expanding the taxbase, doesn't mean bringing in those on long wages and making them pay tax.

I'll clarify what I mean by expanding the taxbase.

I think a tax on horse breeding industry would be a start.
I think removing the "artists" tax exemption and actually taxing income on artists would be a good move.
I would look at taxing the assets - as opposed to the income - of people earning more than €100,000 annually.
Let's call it a wealth tax.

tinkerbell

hinault wrote: »

I would look at taxing the assets - as opposed to the income - of people earning more than €100,000 annually.
Let's call it a wealth tax.

Why should those who earn over €100k pay even more tax than they already do? They pay enough as it is. When you add in PAYE, PRSI, pension levy etc. it amounts to over 50% tax.

They need to go after the tax-free industries, sort out social welfare, etc. rather than just expecting those who earn more than €100k to just pay for everything. Why should they? What about all those people who pay NO tax? Make them pay tax too.

hinault

tinkerbell wrote: »

Why should those who earn over €100k pay even more tax than they already do? They pay enough as it is. When you add in PAYE, PRSI, pension levy etc. it amounts to over 50% tax.

They need to go after the tax-free industries, sort out social welfare, etc. rather than just expecting those who earn more than €100k to just pay for everything. Why should they? What about all those people who pay NO tax? Make them pay tax too.

I was only speaking about the taxbase, tinker.

Yes, I think the point of attack has to be govt expenditure.
I would look at the outgoings of the govt.

Slash public sector existing pensions and future pensions.
Slash the pay/remuneration of top civil servants and their pensions.

I would look at social welfare.
I think something has to be done with regard to the rent support and the payment of state funding to private landlords to house social welfare recipients.
All of the property taken in to public ownership could be used to house these social welfare recipients, and stop the bleeding of cash from the system.
I would cut social welfare payments because we're in a period of deflation.

The_Honeybadger

WalterMitty wrote: »

im currently on social welfare. 200 a week is too much. it should eb reduced to 150 or less. Im lucky to be in my twenties and living at home. A special hardship fund could be set up for those really needign more than 150 a week to subsist. Our public pension is also more than double the uk one but our FF chancers wont lower it as the old people will turn further against them. Having been on social welfare and seeing the cost of living falling a lot i feel i can say 200 is too much for most people . I could easily subsist on 100eur a week. Anyone who has lost job recently and is in danger of losing home should of course be helped along with other hardship cases but social welfare is just too generous given the poor state of the economy. It can easily be a career choice for many nowadays and is for many i have seen( check the decent cars and satelitte dishes outside sociall housing and the business of the pubs and bookies in these social housing areas.).

Walter a person in their twenties living at home could survive on zero dole if they needed to. Try it with a wife and two kids to feed, most people on the dole paid alot of taxes over the years and it is not their fault that the economy was mismanaged, some people abuse the dole certainly, through fraud etc but that does not mean we should cut it for everybody. IMO it should be dealt with on a case by case basis, and a system needs to be found to deal with career dolers, but i don't agree that it is too high for people with families, comparisons with the uk are not fair as the housing and other benefits there level the playing field quite a bit.

Sleepy

mickeyk wrote: »

Walter a person in their twenties living at home could survive on zero dole if they needed to. Try it with a wife and two kids to feed, most people on the dole paid alot of taxes over the years and it is not their fault that the economy was mismanaged, some people abuse the dole certainly, through fraud etc but that does not mean we should cut it for everybody. IMO it should be dealt with on a case by case basis, and a system needs to be found to deal with career dolers, but i don't agree that it is too high for people with families, comparisons with the uk are not fair as the housing and other benefits there level the playing field quite a bit.

Or simply slash the rate for the individual and increase the rate for dependents

dissed doc

Dannyboy83 wrote: »

Now that we are more aware of the scale of the bailouts aswell as the calamity in our state finances, I was wondering if we have a better understanding of what is going to happen at the next budget?

e.g.
5% increase on the lower tax band
8% increase on the upper tax band
8% reduction for all public servants

Any takers?

I can tell you what is going to happen in the next budget: I am going to be long gone out of Ireland.

unit 1

Not hitting paye and "broadening" the taxbase can be a bit misleading. You cannot get money out of a stone. By definition the person you get the money from is already a taxpayer eg a homeowner pays paye and new property tax.
An unemployed non paye payer avoids property tax as he is on welfare. Bottom line is if you pay paye you will pay more (because you are earning therefore have money to give) If you are not already paying paye you wont, but benefits can be cut.

cson

To be honest their already has been an increase in PAYE rates; just branded differently so as to be palatable to the people. The Income Levy is supposed to do what exactly that PAYE doesn't do? Granted PAYE is scaled whereas Income Levy is on gross but it's more or less an increase in PAYE in all but name imo.

I'm just waiting for the NAMA Levy to be invoked in the next budget.

Liam Byrne

I would like to see half of the red tape and other crap done away with, and for FF or some independent organisation to give a proper review of (a) how much it costs to survive in Ireland and (b) how much the services on offer should cost, based on what we can afford

...and finally an INDEPENDENT review of (c) what politicians should cost, again based on what we can afford

cson

Trouble is Liam, by the time that review was completed Ireland would likelyhave completed economic recovery and be in the midst of another property binge.