USC or Capital Spending?

Dannyboy83

Which would you prefer?

i) A reduction in the USC rate, meaning a larger net income (until it's taken away with the other hand by water charges)

or

ii) An Increase in Capital Spending ? (and no cushion against water charges)


I would prefer option an increase in Capital Spending but unfortunately I don't trust the government or the council not to squander the money.

At least if there were a USC cut, the people most likely to receive it will be those who will spend it in the domestic economy, meaning a temporary boost until the water charges deflate the domestic economy again.

RichardAnd

Well, I paid 138.05 euro last month because of the USC. If that money were to be placed into my salary as it would have been before, I would be more inclined to spend it. If that happened on a large scale, a lot of people would be spending more money in shops. Those shops could then hire more staff, who would in turn have more money to spend and so on.

I would not at all favour an increase in capital spending for the simple reason that I do not trust the power holders of this state to invest money wisely, fairly or even sanely. The so-called "investment" would probably be squandered on vote-buying exercises by the government of the day.

carpejugulum

I choose:
iii, cut welfare and PS bills and use the money for capital spending and tax cuts, starting with VAT

Dannyboy83 wrote: »

until the water charges deflate the domestic economy again.

That money also goes into the economy.

hfallada

Economist generally believe capital spending is better. A tax cut results in higher incomes, but also means people tend to save the increase in their income. Where as capital expenditure results in money being pumped into the economy. There is plenty of projects that need to be done like the DART underground and the Dublin Metro

Sand

Capital spending would be better - its just a question of ensuring "capital spending" doesn't turn into a vote buying gimmick with "interpretative centres" in the middle of nowhere and unused swimming pools in Ministers constituencies or the latest Labour make-work scheme. I don't trust Irish governance in that regard - a reduction in taxes would seem safer. I'd rather keep and spend the money myself than entrust it to the tender mercies of the Irish "world class" civil service.

Idbatterim

depends on what it is, if it was for dart underground or metro north, given the colossal benefits for particularly dublin, but indeed the whole of Ireland, I would gladly forgo USC abolition...

Manach

Binary choice: going for the tax cut, down to a certain level. Yes, people could misuse the money or on the other hand use it to upskill/invest and better themselves which will lead to more money in the long run into the economy.

Farmer Pudsey

There will be a reluctance to reduce USC. I saw an article where it gave the opinion that it is raising huge amounts of money and is impossible to shelter income from it especially for the higher earning self employed.

If it was reduce it will only be by 1-2% so 5-10 euro/week to most earners. it also extracts money from those on lower incomes that pay little tax. Changing tax tax rates might be more beneficial but Joan will be dead set against same especially higher rate. Not sure about capital spending unless Cork to Limerick motorway. The thing about the DART underground and the Dublin Metro is both of these contracts might go to Companies based outside Ireland and use little Irish production.

The EU comission report pointed out that childcare for working family's was priority so maybe projects or tax benefits in that direction might be laudable. However if all this only lined the pockets of providers rather than bring about affordable creche's it would be a waste of time.

In general smaller capital projects are more labour intensive than larger one's.