The USC Charge - Will it be there forever?

Cuttlefish

With the Budget tomorrow and more cuts/ taxes being imposed but the exit from the bailout in two months for Ireland being the good boy in the classroom here is a question...

Will the USC charge ever be terminated??

This highly visible tax in everyone's pay packet is crippling and is having a severe impact and long reaching consequences on peoples lives. I mean earn just over €10K and you are liable!

I feel it will be there forever because the Government couldn't function without this large chunk of cash.

It has been reported elsewhere that €4Billion will be paid through the USC charge this year! 2011 - €3.1B and in 2012 €3.8B...Staggering

creep

That's the Dail's drinking fund

Moonbeam

PRSI was a temporary measure too...

wp_rathead

It is basically "the tab" - seen as "we all partied"

Notorious97

Cant see it ever going away, people bave paid it, moaned yes, but paid it anyway and just got on with it.

Its a nasty tax but i cannot see them ever scrapping it unfortunately! If they focused on reforming sections of this country for the sake of this country, regardless of how popular they will be after it, nobody could argue with them, would also mean less taxes, cant tax forever to make up the gap with expenditure!

People paid with their lives for this country to put these idiots in the position they are in now a days, i think its only right all of our politicians start taking the tough reforms on and changing ireland for the better, and if they pay with less votes so be it!

Cant see them doing that though either, welcome to ireland 2013!

corkgsxr

Id say the window tax was the only one ever dropped.

Cuttlefish

Exactly PRSI meant to be short term and still here.

It is so demoralising to see the amount taken out in USC charge in your pay packet.

I reckon 25% of my wages has gone out in USC PAYE and PRSI

delw

Wasn't VRT suppose to be temporary as well?

SafeSurfer

More people in Ireland are employed in the domestic tourism industry than by multi nationals. Yet the 12.5% corporation tax is a sacred cow which almost all political parties refuse to consider increasing.
Tomorrow the vat rate on our tourism industry will be increased despite the creation of 15,000 jobs in the sector as a result of the imitative.

Corporate profits have escaped any charge on their profits despite the application of a "universal" social charge on the incomes of all citizens.

Why are ordinary Irish workers continuing to subsidise the multi million euro profits of multi national corporations which are largely repatriated to their already wealthy shareholders.

Del2005

delw wrote: »

Wasn't VRT suppose to be temporary as well?

No. It was to replace excise duty on new vehicles, which the EU banned. VRT was just a tax made up to keep the revenue from new cars to the wasters in the dail pumping the pump in the parish.

They will never get rid of the USC. We didn't pay enough tax to run the country. Removing it would require even more cuts in spending.

Del2005

SafeSurfer wrote: »

More people in Ireland are employed in the domestic tourism industry than by multi nationals. Yet the 12.5% corporation tax is a sacred cow which almost all political parties refuse to consider increasing.
Tomorrow the vat rate on our tourism industry will be increased despite the creation of 15,000 jobs in the sector as a result of the imitative.

Corporate profits have escaped any charge on their profits despite the application of a "universal" social charge on the incomes of all citizens.

Why are ordinary Irish workers continuing to subsidise the multi million euro profits of multi national corporations which are largely repatriated to their already wealthy shareholders.

€4 extra on a €100 bill isn't going to kill tourism.

YellowFeather

Cuttlefish wrote: »

Will the USC charge ever be eliminated?

Not the Universal Social Charge charge!!! And, no. Sure we're still paying pay related PRSI insurance, which is a tax in all but name anymore.

SafeSurfer

Del2005 wrote: »

€4 extra on a €100 bill isn't going to kill tourism.

I disagree with you. It will mean a 50% increase in vat bills for small struggling tourism providers. Say I have a tourism business with a turnover of 100,000. My vat liability at 9% is €8256 but at 13.5% is €11,894. Where do you think businesses are going to find this extra 50%? They cannot increase prices so they will either go to the wall or lay off staff.

Vat on tourism has been decreased in Germany Switzerland France and many other countries to increase employment and in Ireland we are increasing it by 50%.

April O Neill

It'll be here for a good few years anyway. USC takes just marginally less revenue per year than corporation tax, believe it or not! So the government aren't going to give that up! It catches lower income people who were exempt under employment tax bands.

Blue Crystal

Regarding vat increase tomorrow I have very little sympathy for vintners and hotel owners tbh

BOHtox

Moonbeam wrote: »

PRSI was a temporary measure too...

As was income tax...

NoClues

SafeSurfer wrote: »

More people in Ireland are employed in the domestic tourism industry than by multi nationals. Yet the 12.5% corporation tax is a sacred cow which almost all political parties refuse to consider increasing.
Tomorrow the vat rate on our tourism industry will be increased despite the creation of 15,000 jobs in the sector as a result of the imitative.

Corporate profits have escaped any charge on their profits despite the application of a "universal" social charge on the incomes of all citizens.

Why are ordinary Irish workers continuing to subsidise the multi million euro profits of multi national corporations which are largely repatriated to their already wealthy shareholders.

In fairness a lot more people would join the dole queues if our corporation tax was hiked. As a country, we have feck all else to offer foreign multinationals who set up here. Germany already have their eyes very sharply focused on our corporation tax, and it's not for the good of our country.

Stheno

I remember earning 15k in old punts and paying 46% tax!

April O Neill

BOHtox wrote: »

As was income tax...

I have no problem with income tax, tbh.

BOHtox

April O Neill wrote: »

I have no problem with income tax, tbh.

Fair enough.

The main point was originally is that all taxation was temporary or for a temporary means but society, whether it was through greed or for the betterment of society and I do believe both occurred, has come to terms with an ever increasing amount of taxation

April O Neill

BOHtox wrote: »

Fair enough.

The main point was originally is that all taxation was temporary or for a temporary means but society, whether it was through greed or for the betterment of society and I do believe both occurred, has come to terms with an ever increasing amount of taxation

Well, I don't agree with ALL taxation being temporary myself. I mean, those roads, schools and hospitals won't pay for themselves!

NuckingFacker

Del2005 wrote: »

€4 extra on a €100 bill isn't going to kill tourism.

You really don't get how careful with money many Tourists are. There's a psychological impact of €103.99 over €99.00.

Also, USC, will it be there forever? Probably, but chances are it will slowly creep up in size. Low tax economy? Who started that joke off?

Geuze

Note that the USC tax simply replaced two previous levies - it is not an extra tax.

the Health levy
the Income levy

Some people who didn't pay the previous levies do have to pay USC, yes that's true, as it has a broader base.

So most people (not all) do not pay any more due to the USC, they pay more or less the same as they previously paid in the two levies.

Some people may even pay less in USC than the two previous levies.

Most people think that it is a new tax.

It is, in some sense, as the name is new, but it simply replaced two previous levies.

Geuze

See section 3.6.4 here:

http://ec.europa.eu/economy_finance/.../ecp502_en.pdf

"The Universal Social Charge, like any tax increase, was not welcomed by the public.
Taxpayers experienced a drop in net income in Budget 2011. Many people thought the USC
was the reason for the reduction in their net income. This was not the case for many
taxpayers.

The reason many income earners saw reductions in their net income was due to the
reduction in income tax credits and bands that also occurred in Budget 2011. Most taxpayers
earning over €26,000 per annum would have benefited from the introduction of the USC all
other things being equal; particularly those earning between €26,000 and €35,000 who had
been suffering disproportionately from the sudden impact of the 4% Health Levy.

While many income earners would be better off under the USC than the Income Levy and
Health Levy combined, there are a significant number who will pay more tax as a result of
the introduction of the USC. This is due to the fact that there were many exemptions from the
Income Levy and Health Levy. The entry points to paying these charges were relatively high
and the numbers of exempt individuals were also high. For example, only 989,000 income
earners paid the Health Levy – this is less than half the total number of income earners on the
tax record and was due to the high exemption threshold to the levy as well as the different
types of income and income earners that were exempted from the levy."

Geuze

To answer the question - it should not be here forever, it makes the tax system too complex, it should be abolished, and integrated with income tax and/or PRSI.

Cuttlefish

Geuze wrote: »

Note that the USC tax simply replaced two previous levies - it is not an extra tax.

the Health levy
the Income levy

Some people who didn't pay the previous levies do have to pay USC, yes that's true, as it has a broader base.

So most people (not all) do not pay any more due to the USC, they pay more or less the same as they previously paid in the two levies.

Some people may even pay less in USC than the two previous levies.

Most people think that it is a new tax.

It is, in some sense, as the name is new, but it simply replaced two previous levies.

Yes two previous Levies that didn't exist until the Banking crisis. We are all paying €4B more in tax than 5 years ago and as other posters have said it will increase

Cuttlefish

Geuze wrote: »

To answer the question - it should not be here forever, it makes the tax system too complex, it should be abolished, and integrated with income tax and/or PRSI.

So you are saying keep the % taken out high but make it easier for the number crunchers to work out the payments?

Fishyfreak

SafeSurfer wrote: »

I disagree with you. It will mean a 50% increase in vat bills for small struggling tourism providers. Say I have a tourism business with a turnover of 100,000. My vat liability at 9% is €8256 but at 13.5% is €11,894. Where do you think businesses are going to find this extra 50%? They cannot increase prices so they will either go to the wall or lay off staff.

The business will have collected the VAT already from the consumer, you will only be paying the revenue what you have already collected!

The issue is the customer still using the service in the first place as a result of the overall price increase.

the groutch

they'll get rid of it in Budget 2016 to try buy the election, FF style.

Dravokivich

Notorious97 wrote: »

Cant see it ever going away, people have paid it, moaned yes, but paid it anyway and just got on with it.

We don't have a choice but to be put out by it. It's taken from me before I get paid. How in the heck can you say "but paid it anyway?"

anncoates

I'll answer the question posed in the OP when I investigative why a pig has just flown past my window.

anncoates

Geuze wrote: »

Note that the USC tax simply replaced two previous levies - it is not an extra tax.

the Health levy
the Income levy

Some people who didn't pay the previous levies do have to pay USC, yes that's true, as it has a broader base.

So most people (not all) do not pay any more due to the USC, they pay more or less the same as they previously paid in the two levies.

Some people may even pay less in USC than the two previous levies.

Most people think that it is a new tax.

It is, in some sense, as the name is new, but it simply replaced two previous levies.

Summary: 2 imakey uppy levies were combined into one makey uppy levy.

jester77

NuckingFacker wrote: »

You really don't get how careful with money many Tourists are. There's a psychological impact of €103.99 over €99.00.

Also, USC, will it be there forever? Probably, but chances are it will slowly creep up in size. Low tax economy? Who started that joke off?

It still is low tax in comparison to other EU countries, especially for low earners. Someone earning 10k a year in Ireland will have an extra €170 a month in their pocket, and better benefits, compared to the same person in Germany.

Akrasia

Del2005 wrote: »

No. It was to replace excise duty on new vehicles, which the EU banned. VRT was just a tax made up to keep the revenue from new cars to the wasters in the dail pumping the pump in the parish.

They will never get rid of the USC. We didn't pay enough tax to run the country. Removing it would require even more cuts in spending.

Or, we could collect tax from corporations
Multinationals in ireland pay an effective tax rate of 2.5% (according to David McWilliams
http://www.davidmcwilliams.ie/2013/10/14/lets-talk-about-tax

If they paid the 12.5% that they were supposed to, they'd be paying 12.5billion a year to the exchequer

anncoates

Akrasia wrote: »

If they paid the 12.5% that they were supposed to, they'd be paying 12.5billion a year to the exchequer

To another county's exchequer, more likely.

Agricola

I'd imagine at some point in the future when the economy is stronger, a party (probably FF) will have the scrapping of the USC on its election manifesto. And they will walk that election on the strength of it.

Playboy

Anyone know how Ireland's tax regime fares against otherm western European countries? Its obviously less than places like Sweden but it would be intersting to compare and contrast with the UK, France, Holland etc.

Bullseye1

Del2005 wrote: »

€4 extra on a €100 bill isn't going to kill tourism.

It won't help either.

Bullseye1

jester77 wrote: »

It still is low tax in comparison to other EU countries, especially for low earners. Someone earning 10k a year in Ireland will have an extra €170 a month in their pocket, and better benefits, compared to the same person in Germany.

Would you rather have German public transport, health system or are you happy with ours?

jester77

Bullseye1 wrote: »

Would you rather have German public transport, health system or are you happy with ours?

I've no problem paying high taxes for what I get. But I always hear people in Ireland giving out about the services they get for their tax. You have to look at it realistically, when you pay low taxes then you can't expect high quality services.

Floppybits

OP, Any temporary tax ever introduced in this country becomes permanent. Expect in 3 years time when the property tax management moves over to the local councils that there will be increases in it every year and you can bet that most the money collected will not be spent on improving services but on increasing the wages.

Cuttlefish

Yes here to stay and crippling households and restricting economic growth.

ofcork

Playboy wrote: »

Anyone know how Ireland's tax regime fares against otherm western European countries? Its obviously less than places like Sweden but it would be intersting to compare and contrast with the UK, France, Holland etc.

Our corporation tax is one of the lowest in Europe if not the lowest iirc.

Sam Kade

What about the 6c/L they slapped on petrol and diesel at the start of the recession and VAT added to that. It's long forgotten but still being paid :mad:

hmmm

Politicians love doling out money - they get to behave like some sort of medieval king, handing out other people's money to their favoured clients.

They hate cutting taxes as it means less money to distribute.

Bullseye1

jester77 wrote: »

I've no problem paying high taxes for what I get. But I always hear people in Ireland giving out about the services they get for their tax. You have to look at it realistically, when you pay low taxes then you can't expect high quality services.

We don't pay low taxes. The taxes we pay are badly utilised. When 3/4 of health and education budgets are spent on wages something is seriously wrong. In order to get something resembling a German system we woud have to go back to the drawing board. And as we know that ain't going to happen.

Geuze

Cuttlefish wrote: »

Yes two previous Levies that didn't exist until the Banking crisis. We are all paying €4B more in tax than 5 years ago and as other posters have said it will increase

Incorrect - these levies long precede the banking crisis.

Note that Govt revenues are fairly stable at 55-56bn.

See here, table 1:

http://www.cso.ie/en/media/csoie/releasespublications/documents/economy/2013/gfsa2013.pdf

Geuze

Akrasia wrote: »

Or, we could collect tax from corporations
Multinationals in ireland pay an effective tax rate of 2.5% (according to David McWilliams
http://www.davidmcwilliams.ie/2013/10/14/lets-talk-about-tax

If they paid the 12.5% that they were supposed to, they'd be paying 12.5billion a year to the exchequer

Incorrect.

See Seamus Coffey, here:

http://economic-incentives.blogspot.ie/2013/10/12-billion-in-ct-revenue.html

Geuze

Playboy wrote: »

Anyone know how Ireland's tax regime fares against otherm western European countries? Its obviously less than places like Sweden but it would be intersting to compare and contrast with the UK, France, Holland etc.

Overall taxes are 30% of GDP, and 36% of GNP.

Highest is DK at about 50% of GDP, EU average is 40% of GDP.

Read this:

http://taxpolicy.gov.ie/wp-content/uploads/2013/07/2013-06-17-BOC-Conference-Presentation-Final.pptx

Cuttlefish

Geuze wrote: »

Incorrect - these levies long precede the banking crisis.

Note that Govt revenues are fairly stable at 55-56bn.

See here, table 1:

http://www.cso.ie/en/media/csoie/releasespublications/documents/economy/2013/gfsa2013.pdf

My comment was meant to read that we are paying €4Billion more in tax due to the USC or whatever it was called before that.

One thing for sure this was not on my pay packet before the banking crisis!

K-9

Cuttlefish wrote: »

My comment was meant to read that we are paying €4Billion more in tax due to the USC or whatever it was called before that.

One thing for sure this was not on my pay packet before the banking crisis!

Maybe it should have been on your pay packet before the crisis?

All the parties engaged in auction politics over who could cut taxes most, even SF and Labour. We'd a situation when nearly half the population paid little or no income tax at all, but apparently we were still a high tax country.

The problem is we cut income taxes too much, and expected German like services, and now we are highering taxes to pay for cutting them too much. People don't release that cutting income tax too much was a cause of the whole economic mess.

It was an unpopular view to argue in a country that wants Boston type taxes but Berlin levels of Health and Education.