Proposal: the 'fairness' or 'patriot' tax

BeardyFunzo

I know a good few people who have been totally untouched by the recession, no pay cuts, no additional taxes, just business as usual. So i was thinking, the rhetoric of the last few years is that everyone should be contributing extra to getting out of the mess, so here's my idea.

Should your income for 2011 exceed your income from 2008 then you would have 'fairness' or 'patriotic' tax rates of 22 and 45% applied to your income instead of the usual rates. Should be easy to implement as revenue hold all the relevant information.

The added bonus is that it probably wouldn't penalise anyone returning to work and you would probably be able to snare a few public sector workers for a few extra quid if their increments have pushed their wages above the 2008 levels.

Thoughts?

Nijmegen

How about we just tax the 50% of workers who pay no income tax? Even a small amount?

ei.sdraob

Nijmegen wrote: »

How about we just tax the 50% of workers who pay no income tax? Even a small amount?

that's too "fair"

anyways fairness is that much abused word on this site that is also very subjective

mikemac

41% to 45% is quite a big jump

BeardyFunzo

feelingstressed wrote: »

41% to 45% is quite a big jump

Not compared to the large number of people who have taken double digit pay cuts. And its the top rate of tax which most people pay on only a portion of their income.

Nijmegen

These figures are obviously out, given the shifting patterns of employment, but I put it forward as a ballpark estimate.

In Q409, there were 1,887,700 people in employment in Ireland.

If 50% of them pay no income tax, that's 943,500 paying tax and 943,500 not paying tax.

Income tax in 2009 was €11.835bn, or an average of €12,500 per tax payer. Obviously the other 50% are on "low incomes" and would contribute an average of a lot less.

But even if each person contributed a mere €10 a week, we'd be almost €500m better off in receipts. €500m that wouldn't have to come out of schools, or hospitals, or similar, in the next budget.

(Of course nothing is that simple. You remove €500m and you lose XX from VAT receipts and so forth. But in the end, you raise a net amount.)

How bout we go for that kind of an option?

Figures from here: http://www.irishtimes.com/newspaper/breaking/2010/0324/breaking34.html

Cookie_Monster

my income is massively higher than in 2008 as I went from part time college work to full time employed. Why should I be penalised for that?

Count Dooku

Nijmegen wrote: »

How about we just tax the 50% of workers who pay no income tax? Even a small amount?

then they will be much better on dole

It doesn't make any sense to increase taxes to preserve waste in public finances
Let cut waste first, then increase taxes
Otherwise it will be no motivation for PS unions seek efficiencies

Nijmegen

Cookie_Monster wrote: »

my income is massively higher than in 2008 as I went from part time college work to full time employed. Why should I be penalised for that?

You should be flogged in the street, frankly.

ei.sdraob

Cookie_Monster wrote: »

my income is massively higher than in 2008 as I went from part time college work to full time employed. Why should I be penalised for that?

because lefties don't like people being successful and love redistributing the fruits of other peoples work and savings

Nijmegen

Count Dooku wrote: »

then they will be much better on dole

It doesn't make any sense to increase taxes to preserve waste in public finances
Let cut waste first, then increase taxes
Otherwise it will be no motivation for PS unions seek efficiencies

I agree with cutting waste, of course.

But I also think that there is, as in other European countries, a much finer grade of tax and benefit brackets that can be slid and applied to people to mean that they pay, and get, what they really can and need rather than our Irish cast-a-giant-net approach.

If you can pay €1 a week in tax, let's tax you €52 a year. If you can pay €10, let's do so.

BeardyFunzo

Nijmegen wrote: »

How about we just tax the 50% of workers who pay no income tax? Even a small amount?

I would guess that lower paid workers pay, as a proportion of their income, more VAT that I do (as I save a portion of my wages), so they are being taxed. Whether that's the right way of going about it? Thats another question altogether.

BeardyFunzo

Nijmegen wrote: »

I agree with cutting waste, of course.

But I also think that there is, as in other European countries, a much finer grade of tax and benefit brackets that can be slid and applied to people to mean that they pay, and get, what they really can and need rather than our Irish cast-a-giant-net approach.

If you can pay €1 a week in tax, let's tax you €52 a year. If you can pay €10, let's do so.

The giant cast a net approach is so the tax system appears to be simple, when it's far from it in reality.

I had a friend who refused a pay increase (back in the day) because he would have ended up on the higher rate of tax. No matter how many times i explained it to him he refused to believe he would only pay a tiny amount of extra tax and would be overall better off.

that part of the tax system isn't complicated but introducing an even more complicated system? I can only imagine what my friend would think...

Count Dooku

Nijmegen wrote: »

I agree with cutting waste, of course.

But I also think that there is, as in other European countries, a much finer grade of tax and benefit brackets that can be slid and applied to people to mean that they pay, and get, what they really can and need rather than our Irish cast-a-giant-net approach.

If you can pay €1 a week in tax, let's tax you €52 a year. If you can pay €10, let's do so.

people pay taxes for services, not for keeping living standards of public servants
low paid workers pay enough through indirect taxes, like VAT and levies on petrol
Any attempt to take more taxes from them will only preserve public sector from redundancies, but will not bring much after subtracting cost of chasing so huge amount of taxpayer for so low sums

who what when

Are you trying to say that the taxes we already pay are in some way un-patriotic??

BehindTheScenes

Well you definitely couldn't call it the patriot tax. The last one we had was Seán Lemass and after that everyone was out for themselves.:mad:

hobochris

I would gladly pay more tax if the government could spend it wisely.

Until then why should I pay for their party when I'm not invited? even more so when they will gladly let me and others like me clean up their mess.

Count Dooku

BeardyFunzo wrote: »

I had a friend who refused a pay increase (back in the day) because he would have ended up on the higher rate of tax. No matter how many times i explained it to him he refused to believe he would only pay a tiny amount of extra tax and would be overall better off.

Are you sure?
Please provide home take figures for 25,999 and 26,001

BeardyFunzo

Count Dooku wrote: »

Are you sure?
Please provide home take figures for 25,999 and 26,001

At first I thought you were joking but then i ran the figures through taxcalc.eu...

Gross Pay: 25999.0
Pension & Ded: 0.0
Income Levy: 519.98
PRSI & Health: 775.48
Net Tax Due 1539.7998
Net Pay: 23163.738


Gross Pay: 26001.0
Pension & Ded: 0.0
Income Levy: 520.02
PRSI & Health: 1815.6001
Net Tax Due 1540.2002
Net Pay: 22125.18


That is madness.... absolute madness. Just goes to show that even though they didn't raise the tax rates, they really raised the tax rates.

Cookie_Monster

Count Dooku wrote: »

Are you sure?
Please provide home take figures for 25,999 and 26,001

+1 I was put over that limited and produce the calcs to show I was worse off. Employer didn't care and refused to "deny" me the pay rise even though I lost out big time on it

Idbatterim

nearly 50% of workers paying no direct tax and we wonder why were up sh**ts creek? I have a fairly good idea, where the solutions to our expenditure problems lie, if the Germans, EU or IMF come in to sort them out!

Nijmegen

I agree that the government should cut spending, but it's a dual approach.

Many of our tax breaks and benefits were contrived to win elections, not to promote sound fiscal policy.

The idea of a sliding tax/benefits system is used in all of the countries we tend to admire, like Germany, Sweden and so on. Everything is means tested and everything is taken account of, so your tax/benefits goes up/down depending on your circumstances of the day, and isn't decided on the whim of some stressed, overworked person in the paper obsessed department of social something or other.

Apart from the general fairness of it all - many people would benefit who need it - it would help us to widen the tax net, which is rather narrow and small in this country.

We want a Scandinavian welfare state on US income taxes.

Head The Wall

BeardyFunzo wrote: »

I know a good few people who have been totally untouched by the recession, no pay cuts, no additional taxes, just business as usual.

Income levy and health levy has increased for all workers bar minimum wage

BeardyFunzo wrote: »

I would guess that lower paid workers pay, as a proportion of their income, more VAT that I do (as I save a portion of my wages), so they are being taxed. Whether that's the right way of going about it? Thats another question altogether.

DIRT tax is around 23% so if you are using your savings you are getting taxed on it. Obviously leaving it in a current account won't earn you jack on it

amen

How about we just tax the 50% of workers who pay no income tax? Even a small amount

you do realise that this leads to everyone paying more tax?

these figures are just an example to make it easy

Say you earn 25,000 a year and no tax is payable on the the first 20,000 and the tax rate is 20% on the remaining 5,000. So you pay 1,000 a year tax.

The plan is now to tax the 50% (I think the actual figure is 46%) of the work force that pay no tax by lowering the tax threshold so 10,000.

So now you still earn 25,000 a year and no tax is payable on the the first 10,000 and the tax rate is 20% on the remaining 15,000. So you pay 3,000 a year tax.

And this will be sold as fair as everyone is now paying the same tax burden.
Be prepared for a hard next few years

Colonel Sanders

Cookie_Monster wrote: »

my income is massively higher than in 2008

Same here on the basis of gaining a professional qualification that took 4.5 years of studying on top of a full time job. By international standards and compared to peers with similar qualifications I'm not over paid. My marginal tax rate is already 54% (and I am prepared for it to increase come 2011)

However I am young and highly mobile.....

3DataModem

I'm earning more but paying less tax.... Coz I fecked off (slightly) abroad.

Whichever four dole recipients (or one or two PS workers) I was funding with my income tax, I hope someone else steps into the breach... I really do.

Unpatriotic? Maybe...

Nijmegen

amen wrote: »

you do realise that this leads to everyone paying more tax?

these figures are just an example to make it easy

Say you earn 25,000 a year and no tax is payable on the the first 20,000 and the tax rate is 20% on the remaining 5,000. So you pay 1,000 a year tax.

The plan is now to tax the 50% (I think the actual figure is 46%) of the work force that pay no tax by lowering the tax threshold so 10,000.

So now you still earn 25,000 a year and no tax is payable on the the first 10,000 and the tax rate is 20% on the remaining 15,000. So you pay 3,000 a year tax.

And this will be sold as fair as everyone is now paying the same tax burden.
Be prepared for a hard next few years

As I said above, we in Ireland expect a welfare state with a very low overall tax net. Either widen it and deepen it, or cut it.

Also, a system of benefits and taxation such as they have in Germany, as I say till I'm blue in the face, would be much fairer to all, and more efficient (naturally )

hmmm

Politics (taxes) of envy.

danbohan

Count Dooku wrote: »

then they will be much better on dole

It doesn't make any sense to increase taxes to preserve waste in public finances
Let cut waste first, then increase taxes
Otherwise it will be no motivation for PS unions seek efficiencies

dole and public sector salarys should be cut by 30% . higher taxes are on their way but it might be more bearable if people seen an effort to cut waste, what we will get will be some the highest taxes in europe and the worst services ,.

Dirk Gently

ei.sdraob wrote: »

because lefties don't like people being successful and love redistributing the fruits of other peoples work and savings

The righties seem to be doing a good job of redistributing the wealth tbh. It seems all the free marketeers have turned into karl marx on coke. What ever happened to survival of the fittest in the market place?

johnnyskeleton

BeardyFunzo wrote: »

I know a good few people who have been totally untouched by the recession, no pay cuts, no additional taxes, just business as usual. So i was thinking, the rhetoric of the last few years is that everyone should be contributing extra to getting out of the mess, so here's my idea.

Should your income for 2011 exceed your income from 2008 then you would have 'fairness' or 'patriotic' tax rates of 22 and 45% applied to your income instead of the usual rates. Should be easy to implement as revenue hold all the relevant information.

The added bonus is that it probably wouldn't penalise anyone returning to work and you would probably be able to snare a few public sector workers for a few extra quid if their increments have pushed their wages above the 2008 levels.

Thoughts?

Right.

So I worked my ass off setting up my recession proof business during the bubble when all my friends were making money hand over fist drinking lattes and selling houses.

Now my business is starting to pay off and I am earning more than I did in 2008.

However, I'm now classed as somehow "untouched" by the recession and have to pay for the mistakes of those people who frittered their money away and I have to pay more than them because it's "unfair" that I made sensible long term plans with my life?

No. Just no.

If anything, people who overpaid for houses should have to pay extra tax and lose their houses and be subjected to a parade where they walk around with their pants around their ankles and signs branded on their heads saying "I'm a financially illiterate fool". I would take no joy in seeing such a parade, but since I'm paying for their mistakes I feel that it is only "fair" that they be given a lesson that they will not soon forget.

ei.sdraob

clown bag wrote: »

The righties seem to be doing a good job of redistributing the wealth tbh. It seems all the free marketeers have turned into karl marx on coke. What ever happened to survival of the fittest in the market place?

only the crooked kind :rolleyes:
in a real capitalism system, banks and companies that are bankrupt are allowed to fail, none of this socialist toobigtoofail/bailout nonsense


anyways its not "patriotic" to be paying more taxes to cleanup the mess dumped onto us by a select few, its foolish