New Household Tax - Boycott

djpbarry

stevedublin wrote: »

The current deficit has been quoted by megelome as €14bn, PeaderCo as €18bn and djpbarry as €5bn.

Eh, no. I said it is projected to be €5 billion in 2015. It currently stands at €14 billion.

stevedublin

beeftotheheels wrote: »

Eh, yeah, that's the point!

Defaulting on private sector creditors is fine, defaulting on official creditors which Greece did not, and could not do, is the problem.

Let there be no doubt that the ECB is an official creditor here as evidenced by its inability to partake in the Greek PSI necessitating their pre-emptive swap into bonds not being CACed or tendered.

I'm not an expert in economics, but whatever Greece did, we need to do too.

beeftotheheels wrote: »

The Irish American Chamber of Commerce has made clear that they expect us to remain within the EU

I agree with these guys, Ireland will not be leaving the EU.

stevedublin

stevedublin wrote: »

I don't have all the facts and figures (where do I get them?), which can be cherry picked to suit a viewpoint anyway (daft.ie recently produced figures which suggests house prices are increasing!, turns out they were only for new or changed asking prices on its site!)

I lol'd at that when I heard it. Firstly, asking prices are no indicator whatsoever of actual sale prices, which are invariably lower at the moment, sometimes very significantly so, and secondly DAFT is hardly an impartial source of information. Yet another report from a vested interest talking up the freefalling property sector and prematurely calling the bottom, like we've seen regularly for several years now. Friends first, daft.ie, sherry fitzgerald, all the usual suspects telling us it's a good time to get the chequebook out (yet again).

The CSO house price index would have been a far better guide for anyone who could wait a few weeks, but DAFT probably couldn't have spun that in a way that suited their "quick, start buying before all the houses are gone" standpoint.

djpbarry

stevedublin wrote: »

I'm not an expert in economics...

You've hidden it well.

stevedublin wrote: »

...but whatever Greece did, we need to do too.

You really don't. Greece is utterly ****ed. Utterly. Whatever Greece does, Ireland should be doing the opposite.

beeftotheheels

stevedublin wrote: »

I'm not an expert in economics, but whatever Greece did, we need to do too.

Greece will be a ward of the international community/ EU for decades to come. Their economy is crippled and they have absolutely no hope. They're damned if they do and they're damned if they don't. They may recover their economic sovereignty sometime in the middle of the next decade but they won't be able to run a deficit for decades after that because they won't have access to the sovereign debt markets just as they didn't on euro entry because their track record on default made their risk premium too high.

Their domestic economy is contracting and their ability to attract inward investment is stiffled by the perception that they have a corruption issue combined with the fact that their very social contract is fraying at the edges and civil unrest does not look that far off, indeed a coup probably wouldn't be all that shocking.

Their people are suffering from a degree of austerity we wouldn't want to imagine, soup kitchens are now a reality on the ground.

Forgive me for saying that anyone with half a brain in their heads does not want this for Ireland.

stevedublin wrote: »

I agree with these guys, Ireland will not be leaving the EU.

Well then don't go around proposing half baked ideas like not repaying the promissory notes without understanding that such a failure could, in all likelihood, result in our ejection from the EU.

A negotiated settlement with some alteration of the role of the ECB is required, not an ill thought out knee jerk reaction to not wanting to pay a €100 tax.

stevedublin

beeftotheheels wrote: »

Their people are suffering from a degree of austerity we wouldn't want to imagine, soup kitchens are now a reality on the ground.

Forgive me for saying that anyone with half a brain in their heads does not want this for Ireland.

No, I don't. Thats why I am saying to resist the property tax.

beeftotheheels wrote: »

A negotiated settlement with some alteration of the role of the ECB is required,

I agree.

beeftotheheels wrote: »

not an ill thought out knee jerk reaction to not wanting to pay a €100 tax.

Its not the €100 itself, its what it will grow to over the next few years.

stevedublin

djpbarry wrote: »

Whatever Greece does, Ireland should be doing the opposite.

So you think Ireland should avoid defaulting, have spending increases and cut taxes then
:eek:

john reilly

oscarBravo wrote: »

As opposed to a car tax, which has decreased year on year since its introduction? There is no provision in law to evict people for non-payment of property tax. Sure, it's theoretically possible that a future law could be introduced to evict people for non-payment of property tax, but it's also theoretically possible that a future law could be introduced to evict people for non-payment of car tax.

It would be nice if we could stick to the facts while discussing this issue. I accept that it's unlikely to happen, though. Jesus wept, that idiotic meme just won't go away, will it? Just as well nobody - apart from anti-property tax scaremongers - is talking about people being thrown out of their houses then, isn't it?

what do we get for our money. why is it that the ordinary working joe soap is the one being hit again. if they cant throw you out of your house if you dont pay then what can they do.

southsiderosie

djpbarry wrote: »

You've hidden it well.

beeftotheheels wrote: »

Forgive me for saying that anyone with half a brain in their heads does not want this for Ireland.

MOD NOTE:

Less of this kind of stuff, please.

beeftotheheels

stevedublin wrote: »

No, I don't. Thats why I am saying to resist the property tax..

So, in order to improve our situation and balance our books we need to move away from the unsustainable transactional taxes of old (which evaporated when the banking crisis hit thus causing our huge deficit), and onto a more stable and recurrent tax base which a property based tax would be a feature of.

How is refusing to pay the sustainable taxes required to balance our budget and keep it balanced over the longer term going to help us avoid becoming like Greece where non-payment of taxes is endemic and a large part of the problem?

It is kind of like me announcing that I'm going to lose weight through the consumption of nothing but cheeseburgers. It might sound like a nice diet but I really don't see how it is going to achieve the aim of resulting in weight loss.

PeadarCo

stevedublin wrote: »

According to megelome's figures, the current deficit is 14bn, not 18bn.
I'm not sure if 9bn is just for bank bailout or not.
Why is the current breakdown so important?, the property tax wont get really big until a few years (2014 onwards).
I don't have all the facts and figures (where do I get them?), which can be cherry picked to suit a viewpoint anyway (daft.ie recently produced figures which suggests house prices are increasing!, turns out they were only for new or changed asking prices on its site!)

The breakdown is important as for example total interest costs could be 9 bn but only 100 million could be as a result of bank debt and the rest from the primary deficit.(Thats just an example) The reverse could also apply.

If you oppose the charge based on the idea it is to repay banks not current expenditure the reason why different amounts of interest were incurred is very important.

PeadarCo

djpbarry wrote: »

Eh, no. I said it is projected to be €5 billion in 2015. It currently stands at €14 billion.

This primary deficit(excluding bank and related for 2011 appears to be about 15.95bn(18.7-2.75)

http://www.bbc.co.uk/news/uk-northern-ireland-16417570

and

http://uk.reuters.com/article/2012/01/04/uk-ireland-economy-deficit-idUKTRE8031LS20120104

uberalles

High end Govt pensions and pay should take a huge drop IMO. It would make this tax more palatable to those footing the bill.

It's all going on local services = BS. It's to keep TDs etc sorted for life.

uberalles

uberalles wrote: »

It's all going on local services = BS. It's to keep TDs etc sorted for life.

This kind of populist nonsense has no basis in fact, and is typical of the kind of chip-on-the-shoulder rhetoric that's confusing debate on the issue.

K-9

later12 wrote: »

Then you're not being realistic. The cuts to social welfare so far have not resulted in anything like the level of opposition that has materialised with respect to the household charge, which is facing outright revolt.

Well most opposition to cuts to welfare will be recipients, whereas a tax affecting 1.6/.7 Million people is going to attract plenty of opposition. It doesn't really mean anything.

Godge

Bullseye1 wrote: »

How can you say they will be worth €1000 in a years time? This is pure speculation. Do you really expect those apartments sold in Dublin for 800,000 and now worth 300,000 to be worth 800,000 in 25-30 years time?

yes it is pure speculation but it is also pure speculation to say it won't.

Maybe those apartments sold for 800,000 and now worth 300,000 will be worth 1,000,000 in three years, that would see them rise slower than the speed at which they fell.

Who knows what the future holds? That is why all the application forms for mortgages had small print that property goes up and comes down.

later12

beeftotheheels wrote: »

Which would require leaving the EU.

In fairness, that isn't quite established. It [default on outstanding promissory notes] could have very negative consequences for the Irish financial system, but I would think it practically impossible that this require Ireland to leave the EA, let alone the EU.

K-9 wrote: »

Well most opposition to cuts to welfare will be recipients, whereas a tax affecting 1.6/.7 Million people is going to attract plenty of opposition. It doesn't really mean anything.

I think that does mean something. It means that cuts to welfare are a lot less potentially destabilising, as well as being the right thing to do from an objective, macroeconomic viewpoint.

We are talking about €3 billion in extra cuts over the next three years. Whilst that is a lot of money, it isn't exactly debilitating, and would be likely have a much more positive effect on GDP growth than revenue-raising will have. If it were combined with a low inflationary outlook and hence responsible behaviour on the part of the unions, it would effectively result in an internal devaluation.

beeftotheheels

later12 wrote: »

In fairness, that isn't quite established. It [default on outstanding promissory notes] could have very negative consequences for the Irish financial system, but I would think it practically impossible that this require Ireland to leave the EA, let alone the EU.

For the purposes of this post default is defined as being an all out refusal to pay as advocated on this thread.

1. Default on the PNs and IBRC is insolvent.
2. IBRC cannot now repay ELA to CBI which is also rendered insolvent.
3. ELA was only agreed on the basis that it would be collateralized (by now worthless PNs) and repaid as in any other case it would have constituted illegal monetary financing of a bank controlled by a MS contrary to Art 123.

CBI is bust, ECB has breached its mandate prohibiting monetary financing by allowing CBI accept PNs as collateral when IBRC was in State ownership, an agreement which could only have been made on the basis that the Irish Gov would keep the ELA appropriately collateralized and ensure repayment.

So, ECB can take an Art 125 position which allows them ignore what the Irish Gov has done and insist we still owe the money (with interest) albeit we've massively p!$$ed them off (the lose something to gain nothing analysis), or

We exit stage left from the EU which is the only way we can, under the current treaty, make the PN issue actually disappear, although that leaves a still insolvent CBI with Target 2 issues as those balances will be euro denominated although since we'd already be well on the road to pariah status we could try redenominating them under domestic law.

The PNs are that big a deal and the ECB is that hog tied hence there will be no meaningful deal on them until the treaty role of the ECB is changed. There just cannot be, they have no wiggle room.

Bullseye1

I love your optimisim but I'm inclinded to ask you to pass me whatever your smoking.

Godge wrote: »

yes it is pure speculation but it is also pure speculation to say it won't.

Maybe those apartments sold for 800,000 and now worth 300,000 will be worth 1,000,000 in three years, that would see them rise slower than the speed at which they fell.

Who knows what the future holds? That is why all the application forms for mortgages had small print that property goes up and comes down.

later12

beeftotheheels wrote: »

CBI is bust, ECB has breached its mandate prohibiting monetary financing by allowing CBI accept PNs as collateral when IBRC was in State ownership, an agreement which could only have been made on the basis that the Irish Gov would keep the ELA appropriately collateralized and ensure repayment.

I'm not quite sure that can be said to be transgressing the rules on monetary financing. After all, the CBI lent to IBRC when it was (on paper) solvent. It is now no longer solvent and the CBI merely makes a call to IBRC. If IBRC or the state repudiate, that's a default, not monetary financing.

So, ECB can take an Art 125 position which allows them ignore what the Irish Gov has done and insist we still owe the money (with interest) albeit we've massively p!$$ed them off (the lose something to gain nothing analysis),

Yes, but then what?

Btw, I'm not arguing that the PNs should not be repaid. By all means, to repudiate like so would be pigheaded in the extreme. But I'm not convinced it would necessitate leaving the EU either.

beeftotheheels

later12 wrote: »

I'm not quite sure that can be said to be transgressing the rules on monetary financing. After all, the CBI lent to IBRC when it was (on paper) solvent. It is now no longer solvent and the CBI merely makes a call to IBRC. If IBRC or the state repudiate, that's a default, not monetary financing.

Not so much given that this was at a CBI level. The CBI could only have been authorized to print money if it was absolutely guaranteed that such money would make its way back out of the system by the Irish gov promising to fill the hole in [IBRC].

Now there's two potential schools of thought best illustrated by the Greek SMP bond PSI issue (which apply equally to 123 as they do 125).

The German school is that the acquisition of the bonds is the bad [illegal] thing so the ECB could have engaged in the bond swap, the prevailing ECB view is that the acquisition [printing in our case] is fine but any attempt to not repay would be the breach of the treaty.

This may yet get tested before the Court of Justice, I believe the German "Crotty" is busy taking the case, but until it's tested we know the prevailing ECB view.

We also know that if we allow the German view prevail without being instructed to do so by the CJEU, the ECB is rendered almost powerless in terms of crisis management, indeed the LTRO is arguably illegal.

There are also huge moral arguments in our favor, not least that IBRC got itself into this mess when it was in private ownership, and much like people arguing that senior debt should be senior to rescue equity, it sticks in the throat that in order to try and fight the crisis we took [IBRC] into State hands which then forced us to stand over its ELA by bringing 123 into play.

But again you'd need the CJEU to come up with an alternative analysis and we're not going to be the ones taking the case.

If the prevailing ECB view is correct, then we just cannot make the PNs go away. The liability exists under EU law which trumps our law so long as we remain in the EU.

If the German view is correct then we'd have an insolvent CBI with huge target 2 issues so I struggle to see how we could stay in the EU because by doing so we'd have to make good the shortfall in the CBI which is the same amount as our current PN headache.

Our best hope is that the ECB seniority issue should now be worrying the IMF such that if the Fiscal compact passes they should start bringing pressure to bear on Germany to agree to relax 123 & 125. In the immediate term they possibly care more about 125 if there's to be official involvement in a Greek debt write down leaving the IMF Junior to the EU institutions, but Germany would possibly find it easier to relax the rules in 123 in so far as any change directed itself only to banks, and only to banks brought into public ownership through a financial crisis.

We'd benefit from such a change to 123, but they'd never change it for us. Given the Commission proposals on banking failures which the ECB doesn't like, and the precarious position of the Spanish banking system, significant stresses there might be our best bet for seeing a change which would allow us renegotiate the PNs in a meaningful way.

K-9

later12 wrote: »

I think that does mean something. It means that cuts to welfare are a lot less potentially destabilising, as well as being the right thing to do from an objective, macroeconomic viewpoint.

All it means is that a poorly implemented Household tax is less popular than well...............everything, except maybe medical card cuts for pensioners and that was only a pensioner protest.

Anyway, I suppose we should have just cut our way out of this from the start as it was the objective, macroeconomic viewpoint, things like balancing the tax burden and introducing sustainable, long term taxes could take a back step, which is fine if you want a low tax, low spend economy. The more cuts you bring in, the more cuts you'll have to plan for.

john reilly

meglome wrote: »

Well perhaps people are stupid.


Some facts.

• 95% of the 14 billion we’re borrowing this year is for our spending deficit is not going to pay for bank debt. It’s just going to fund government services etc. That is a fact.
• The majority of the money we’ve borrowed full stop is for our overspending and not the banks. That is a fact.
• Even if we never made another payment to a bank or never made a payment in the first place we’d still have borrowed the majority of the money. That is a fact.
• Fianna Fail got rid of the sustainable domestic rates to buy an election in 1974 and with the many other tax deceases they have brought in to buy other elections we now do not have a sustainable tax base. That is a fact.

Links... http://www.irishtimes.com/newspaper/finance/2012/0323/1224313766388.html and http://economic-incentives.blogspot.com/2011/11/deficit-and-banks.html

good cut out waste. cut social welfare. cut public sector wages. cut public sector numbers. and tax the hell out of anybody earning over 100 thousand. fill all the tax loopholes and clampdown on black market and tax evasion.
have f.f been in power since 1974. its no wonder then that f.g is unable to run the country. why would people elect a bunch of inexpierenced gombeens at a time of crisis

rasper

K-9 wrote: »

later12 wrote: »

Then you're not being realistic. The cuts to social welfare so far have not resulted in anything like the level of opposition that has materialised with respect to the household charge, which is facing outright revolt.

Well most opposition to cuts to welfare will be recipients, whereas a tax affecting 1.6/.7 Million people is going to attract plenty of opposition. It doesn't really mean anything.

While I agree we need to tackle the sw bill. , emphasis is always put on the ja and jb , reality is this only accounts for 20% of the sw budget of 20 billion I believe.
And something in the region of 1.5 million people receive a sw payment from disability to child benefit to family income support .
It's a very difficult one to tackle and how they let it come to this who knows , what country's model were they comparing to ???

john reilly

john reilly wrote: »

....its no wonder then that f.g is unable to run the country. why would people elect a bunch of inexpierenced gombeens at a time of crisis

Because they were the best available other option to re-electing the same bunch of gombeens that got us in this mess, and would likely have kept digging us into the same hole with policies that were reactionary and popular rather than pragmatic.

Who else would we have elected at a time of crisis? Sinn Féin? The SWP? Let's double social welfare payments and give all of our money away to the least productive sectors of society, punitively tax the most productive ones to the point of driving them out of the state, and p1ss all over Europe, our only financial ally of any kind at the moment?

No thanks.

djpbarry

djpbarry wrote: »

stevedublin wrote: »

I'm not an expert in economics...

You've hidden it well.

I’m going to apologise for this. It was genuinely intended in a light-hearted manner, but reading it back now, it does give the impression that I’m being an even bigger dick than usual.

djpbarry

john reilly wrote: »

...tax the hell out of anybody earning over 100 thousand.

What will that achieve?

Cookie_Monster

john reilly wrote: »

good cut out waste. cut social welfare. cut public sector wages. cut public sector numbers.

exactly but there has been little to no progress on this since 08 in real terms, and I don't see that changing in this gov lifetime. They simply do not have the will

john reilly wrote: »

and tax the hell out of anybody earning over 100 thousand.

that achieves nothing apart from lowering the tax base due to all high earners simply leaving. Overly taxing the rich is the name of socialism does not work, period.

Cookie_Monster

Cookie_Monster wrote: »

that achieves nothing apart from lowering the tax base due to all high earners simply leaving. Overly taxing the rich is the name of socialism does not work, period.

+1 for this. The proponents of "taxing the hell out of the rich" forget that, unlike many people in the overall tax net, the rich have the means to easily shut up shop entirely and move their life to many other places, the governments/immigration bureaus of which will welcome them with open arms. They are in the enviable position of simply not having to put up with punitive tax rates if they don't want to, because there are better options.

Unfortunately, the middle earners are the best tax target in the country. They are high in number, and they have enough short-term cashflow and disposable income so that you can grab plenty of it off them, but not enough that they can discharge their debts and move abroad easily and still end up with a better standard of living than they left behind.

Unfortunately, Ireland's tax ethos at the moment seems to be, don't cut social welfare because it would create all sorts of uproar from the left, don't tax the working poor any more because otherwise they'll just go on the dole, don't tax the rich because they'll just feck off....who's left?...ah the hard working middle earners. Let's fleece them because in fairness, what choice have they got but to pay up? They ain't going nowhere with a mortgage THAT size...

Deleted User

Deleted User wrote: »

+1 for this. The proponents of "taxing the hell out of the rich" forget that, unlike many people in the overall tax net, the rich have the means to easily shut up shop entirely and move their life to many other places, the governments/immigration bureaus of which will welcome them with open arms. They are in the enviable position of simply not having to put up with punitive tax rates if they don't want to, because there are better options.

Unfortunately, the middle earners are the best tax target in the country. They are high in number, and they have enough short-term cashflow and disposable income so that you can grab plenty of it off them, but not enough that they can discharge their debts and move abroad easily and still end up with a better standard of living than they left behind.

Unfortunately, Ireland's tax ethos at the moment seems to be, don't cut social welfare because it would create all sorts of uproar from the left, don't tax the working poor any more because otherwise they'll just go on the dole, don't tax the rich because they'll just feck off....who's left?...ah the hard working middle earners. Let's fleece them because in fairness, what choice have they got but to pay up? They ain't going nowhere with a mortgage THAT size...

Hmmm. Define 'middle earner' to give us a clearer idea of where you're coming from. I would imagine middle earners to be getting off quite lightly, of course that would be assuming that we were saying middle earners were in and around the average industrial wage.