Media: Why the Government refuses to intervene in the housing crisis

The_Conductor

Note- this article is behind the Irish Times Paywall.

Link here: https://www.irishtimes.com/business/construction/why-the-government-refuses-to-intervene-in-the-housing-crisis-1.3197148

Its also in the print version of today's Irish Times- under 'Commercial Property'.

Its a discussion of why the government are insistent on pinning the property crisis on the private sector- and will not be building large numbers of local authority and social housing estates nationally.

The manner in which the article is hidden in the construction pages- rather than given better billing- perhaps on the business pages- speaks volumes........

The big issue in housing in Ireland- is lack of supply of appropriate units- where people want to live.
Simply pointing at the fact that the government have a fund of 6 billion to tackle the sector- patently is insufficient- actions are needed- supply has to be freed up- particularly in the main urban areas.

We can discuss how to deal with these issues ad nauseum here in this forum- even people of completely opposing viewpoints- will agree that the current systems in place are incapable of unlocking the supply side issues.

Using a scapegoat(s) to blame the ills of the sector- to have someone to point fingers at- is ineffective point scoring. We need to relax planning rules, height restrictions, density guidelines etc- and get building- where people want to live.

L1011

The article is very prominent on the app so I wouldn't put much in to its positioning in the print version. Weekday print is a distraction to papers

Making assumptions on future social house build volumes from those done by the last government is ridiculous as there was neither the cash or the demand for most of time and governments are not rewarded by the population for forward thinking

Teyla Emmagan

The_Conductor wrote:

Its a discussion of why the government are insistent on pinning the property crisis on the private sector- and will not be building large numbers of local authority and social housing estates nationally.

You are a great man for getting out of the bed early.

I quote the bit from your post that I agree with the most (and which is most puzzling to me). This is exactly what the government are doing and it makes no sense at all long term. We need more building. We need more social and affordable housing. You can't push it into the private sector because there simply aren't enough units available.

My brother lives in a new estate. They are launching off the plans this morning and at 8pm last night there were already 7 cars settling in outside to queue up for the night. He bought a 4 bed last December and they are now selling 3 beds for 50k more.

If the government are afraid of another building boom and bust then it's too late. We are at crisis point. The lack of housing will cause enough of a blow to the economy. We already have post Brexit firms reconsidering Dublin because of it.

As for the Irish Times, they have been running a hilarious string of landlord bashing articles this week. Lots of hyperbole and hearsay. My favourite was the girl who nearly went homeless when she moved up from home in Maynooth. You know Maynooth, about 25 minutes way on the train.

Askthe EA

Teyla Emmagan wrote: »

You are a great man for getting out of the bed early.

Leo approves!

pwurple

The govt HAS and DOES intervene in the housing crisis.

Repeatedly.

And makes it worse every time.

- Rent increase cap at 4% and unbalanced weighting of rights for overholding tenants. Causing landlords to leave property vacant and simply appreciate in value rather than deal with delinquent tenants and a loss, leaving shortage.

- Taxation for landlords vs pension (vulture) funds. ~50% vs 3% corporate tax. Causing landlords to leave the market or leave property vacant, leaving shortage.

- Local govt zoning, refusal to allow mixed residential with commercial, cap on heights of buildings. I can't understand why they silo residential into these house farms, provide no transport services whatsoever, then moan and groan about the expense of maintaining our spaghetti of roads and other infrastructure. Let people live near where they work ffs!

- Tax individualisation. Controversial perhaps, but disincentivising the existence of single income families has driven up childcare requirements to epic proportions, and produced a bubble of double income families who have this large amount to spend on paper. I'd love either myself or my husband to drop a salary, but the tax situation here for families is chronic. It's not feasible for us.

koheim

The Government is not really intervening, all they are doing is responding to symptoms with short term measures.
They do not tackle to root cause as this is absolutely not FG or FF policy. For the last 25 -30 years the government has depended on developers to provide all housing, it has been outsourced and privatised, and this policy will not change.

The housing situation will not be resolved with the current policies....

xpletiv

Sure half the TD's are landlords. They're hiking their income up with rent. Why would they change it?! It benefits them directly. Not the country. They dont give a ****e about the country.

Askthe EA

xpletiv wrote: »

Sure half the TD's are landlords. They're hiking their income up with rent. Why would they change it?! It benefits them directly. Not the country. They dont give a ****e about the country.

A third apparently. Mind you, if you have a pension, you're probably a landlord too.

pwurple

xpletiv wrote: »

Sure half the TD's are landlords. They're hiking their income up with rent. Why would they change it?! It benefits them directly. Not the country. They dont give a ****e about the country.

Oh for goodness sake. Anyone with a pension is a landlord via a vulture-fund.

And does that mean that the remainder of them are responsible for bending landlords over and screwing them? Because that's what's happening.

benjamin d

Surely the only way out of this mess is a vast programme of social house building. Aggressively CPOing vacant urban land or at least imposing draconian penalties to enforce its development will be necessary.

A huge drive to build social housing would help clear up the council waiting lists while freeing up property for renters, which would ease rent pressure and also bring more housing to the sales market.

This mess was set in motion in no small part when governments washed their hands of their responsibility for social housing. It's a no-brainer for me, what's the issue?

.......

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awec

benjamin d wrote: »

Surely the only way out of this mess is a vast programme of social house building. Aggressively CPOing vacant urban land or at least imposing draconian penalties to enforce its development will be necessary.

A huge drive to build social housing would help clear up the council waiting lists while freeing up property for renters, which would ease rent pressure and also bring more housing to the sales market.

This mess was set in motion in no small part when governments washed their hands of their responsibility for social housing. It's a no-brainer for me, what's the issue?

€€€€€€€ presumably.

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benjamin d

awec wrote: »

€€€€€€€ presumably.

We have a multibillion euro annual housing budget and homeless industry. We're throwing good money after bad at this stage. I don't understand why we can't spend those billions on actually building houses rather than papering over cracks and fudging useless measures that were and are never going to work.

benjamin d

....... wrote: »

AND - a change to the current policies whereby a council house is for life.

Many many people living in council houses paying rents far below market rate who earn enough to rent privately but choose not to.

It should be reassessed yearly and if over a certain income threshold then notice given and the council tenant should enter the private market.

I agree in principal, but it's encouraging those in council houses not to improve their lot. It should of course be reassessed yearly but when improving your income might result in eviction from your house you'll entrench a lack of engagement with the social contract IMHO.

Bredabe

Local Politician told me that he wouldn't support changes to housing market on the basis that if ppl weren't smart enough to buy in the boom, with cheap credit and all that, he wouldn't want them as tenants and by proxy they deserved what they got.

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GavMan

benjamin d wrote: »

Surely the only way out of this mess is a vast programme of social house building. Aggressively CPOing vacant urban land or at least imposing draconian penalties to enforce its development will be necessary.

A huge drive to build social housing would help clear up the council waiting lists while freeing up property for renters, which would ease rent pressure and also bring more housing to the sales market.

This mess was set in motion in no small part when governments washed their hands of their responsibility for social housing. It's a no-brainer for me, what's the issue?

And in the process create more Ballymuns and the likes? We've been down that road. No thanks

benjamin d

GavMan wrote: »

And in the process create more Ballymuns and the likes? We've been down that road. No thanks

I'd like to think (hope!) lessons would have been learned from that. And for every Ballymun there are many more council estates that you'd never hear about because they simple aren't an issue.

L1011

....... wrote: »

This post has been deleted.

Uncap the differential rents until they reach markets rate for those that can afford it. Your idea will ensure people deliberately refuse better employment

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artichoke

....... wrote: »

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Exactly. It shouldn't be a house for life. It should be reassessed yearly. There are people continuing living in 3 bedroom houses long after their children have moved out blocking up space for families.

Why not building apartment blocks for low income families? What needs to change is the Irish mindset about house ownership. Most people in European capitals live in apartments. It is not any longer financially sustainable to build council houses. The money is better spend on building apartment blocks.

jamesthepeach

....... wrote: »

Some will. But there will always be free loaders.

Many wont. Especially those with kids who want them to go to school in a better cachement area.

Its a competely unworkable idea right now obviously as we have a housing crisis, but it should be part of a suite of measures taken (along with building more houses and more houses and more houses) to address this crisis.

In fact, if the council were smart about it theyd get into the business of private landlording and offer the social tenants that have the means to move on private rental accommodation - thus assisting them make the move AND earning a good income off it.

Then you would have the usuals out crying because those who have less are not first in the queue. Ie the freeloaders.

L1011

....... wrote: »

This post has been deleted.

Uncapping the differential rents system does this automatically, without any need to have two sets of housing stock etc.

Tenancy is still for life but you pay the full market rate if you can afford it. The differential rent system works, the capping is too damn low and that is the only thing that needs changing to fix it fully.

Ray Palmer

benjamin d wrote: »

I'd like to think (hope!) lessons would have been learned from that. And for every Ballymun there are many more council estates that you'd never hear about because they simple aren't an issue.

The worst neighbourhoods in the country are all council estates. I don't know of a single council estate in Dublin that is not known to be a social black spot. Some have become nicer but still an issue after 60-70 years. Segregation of people has never worked well.

Brioscai

What if the council just started to build estates with say 20% social and the rest just for rent under free market?

Then move differential rent cap? Rent capped at a % of household wage.

MayoSalmon

Ray Palmer wrote:

The worst neighbourhoods in the country are all council estates. I don't know of a single council estate in Dublin that is not known to be a social black spot. Some have become nicer but still an issue after 60-70 years. Segregation of people has never worked well.

Segregation has literally nothing to do with it! The behaviour of the people living in those houses do!

jamesthepeach

MayoSalmon wrote: »

Segregation has literally nothing to do with it! The behaviour of the people living in those houses do!

Funny how 90% of antisocial behaviour is in a certain type of house.
But it will spread. Now that landlords can't evict people any anti social bahviour in rentals will just stay there too. It can't be removed by the landlord anymore.

Wanderer78

Our government and its advisers have been indoctrinated for many years, decades in fact, with fundamentally flawed economic theories and thinking such as the 'efficient market hypothesis'. As far as I can see 'the market' is a 'construct', I.e. we have absolutely no definitive evidence that if left to market forces, all our needs will be met. In fact there's mounting evidence that market models such as dsge models fail periodically to predict market outcomes, the most common being the failure to predict booms and busts. We need to move on from all this equilibrium nonsense before we do serious damage to our societies.

Sadly, I'm not sure our housing crisis will ever be solved, as these ideologies have become so deeply imbedded in our society, leading me to believe, it may take a few more serious financial and economic crisis before we accept these issues and begin working on possible alternatives. I wish those currently traumatised by their experience of being made homeless, the very best of luck, it must be a devastating experience. Not only do we urgently need to start building social housing for these people, but we must to start preparing for the extremely complex social issues that this outcome will have produced, unfortunately some of these issues will be irreversible and costly to all.

Peter Flynt

Ireland under FF/FG/Lab have long since signed up to the neo-liberalist, dog-eat-dog agenda from the far right where the market will provide everything and if you cannot afford or pay for something then tough. As a former Tanaiste once said "We're closer to Boston than Berlin".

A country where bank debt is socialised and those who are repaying that debt are left either on the streets or at home with their parents as the roots of the present housing crisis all go back to 30 Sept 2008 when those fat fools Lenihan & Cowen both decided to carry out the biggest scam in Irish history.

Now we have those same institutions running adverts saying "Why don't you move back in with your parents?" as the number of millionaires increased during the era of austerity and the gap between the rich and the poor widened significantly.

Ireland has many more now among the poor ranks as a result - those who work in former respectable middle class jobs.
A country where over 50% of income is taken after €34,000 in earnings but which cannot supply basic social housing because er. . . .just can't be arsed.

rawn

artichoke wrote:

Exactly. It shouldn't be a house for life. It should be reassessed yearly. There are people continuing living in 3 bedroom houses long after their children have moved out blocking up space for families.

It IS reassessed yearly. My dad lives in a council house and has to provide payslips for himself and everyone in the house once a year and the rent is adjusted accordingly.

Carlos Orange

rawn wrote: »

It IS reassessed yearly. My dad lives in a council house and has to provide payslips for himself and everyone in the house once a year and the rent is adjusted accordingly.

He means eligibility for highly subsidised housing not the exact rent paid.

Mr Chuckles

The_Conductor wrote: »

Note- this article is behind the Irish Times Paywall.

Link here: https://www.irishtimes.com/business/construction/why-the-government-refuses-to-intervene-in-the-housing-crisis-1.3197148

Its also in the print version of today's Irish Times- under 'Commercial Property'.

Its a discussion of why the government are insistent on pinning the property crisis on the private sector- and will not be building large numbers of local authority and social housing estates nationally.

The manner in which the article is hidden in the construction pages- rather than given better billing- perhaps on the business pages- speaks volumes........

The big issue in housing in Ireland- is lack of supply of appropriate units- where people want to live.
Simply pointing at the fact that the government have a fund of 6 billion to tackle the sector- patently is insufficient- actions are needed- supply has to be freed up- particularly in the main urban areas.

We can discuss how to deal with these issues ad nauseum here in this forum- even people of completely opposing viewpoints- will agree that the current systems in place are incapable of unlocking the supply side issues.

Using a scapegoat(s) to blame the ills of the sector- to have someone to point fingers at- is ineffective point scoring. We need to relax planning rules, height restrictions, density guidelines etc- and get building- where people want to live.

Burdening Citizens with a lifetime of debt, to have a roof over their head, is government policy. Housing policy revolves around encouraging people to take out large loans, and then taking a percentage of that as taxes to fund day to day expenditure. This is morally reprehensible. Once you go down this road, it is hard to change, without impacting existing home owners, some who are in negative equity and cannot move. The thing is, it wasn't always like this. There was a time, when one earner could pay a mortgage, when Social Housing could be provided to keep communities together, and when employees had a fair chance to repay a mortgage. The trend now, is to lower wages, and temporary and insecure work. That's why you have a housing crisis.

Peter Flynt

Mr Chuckles wrote: »

Burdening Citizens with a lifetime of debt, to have a roof over their head, is government policy. Housing policy revolves around encouraging people to take out large loans, and then taking a percentage of that as taxes to fund day to day expenditure. This is morally reprehensible. Once you go down this road, it is hard to change, without impacting existing home owners, some who are in negative equity and cannot move. The thing is, it wasn't always like this. There was a time, when one earner could pay a mortgage, when Social Housing could be provided to keep communities together, and when employees had a fair chance to repay a mortgage. The trend now, is to lower wages, and temporary and insecure work. That's why you have a housing crisis.

Agree with all this.

On a much more simplistic and fundamental level all resources from this state have been provided and continue to be provided to financial institutions and the very rich in society through various schemes to avoid paying tax and to ensure that their hobbies (like horse racing) are heavily subsidised. All of this as the government puts up a fight against the EC for stating that Ireland is owed 13,000 million in unpaid taxes from Apple. Ireland is a tax haven run for the very rich.

As this occurs the emphasis is placed on austerity to pay for this luxury. Housing shortages and homelessness are a very obvious visible sign of what has occurred but there are others we have always lived with - A desperate health service who no one is interested in fixing (which forces people to take out health insurance) and a vastly underfunded "free" education system (where young teachers are not paid properly) are just two. Everything is done on the cheap because those who can pay won't.

To invest in a comprehensive housing plan involves a long term plan to ensure citizens are housed in areas with suitable facilities so as to prevent social deprivation. Governments in IRL have long since rid themselves of this "nuisance" although it doesn't stop them requiring property tax from people who are paying exhorbitant management fees. Such a housing plan requires money . . . and that is not going to be provided for the social and common good because places for people to live are just, shall we say, not "entreprenurial" enough for modern Paddyland.

So those who can't afford housing can stay at their parents, continue to pay crazy rent to the landlord class or go homeless.

Carlos Orange

Mr Chuckles wrote: »

There was a time, when one earner could pay a mortgage

Short of banning couples both working nothing is going to roll history back. Time to move on.

bleary

Mr Chuckles wrote: »

The thing is, it wasn't always like this. There was a time, when one earner could pay a mortgage, when Social Housing could be provided to keep communities together, and when employees had a fair chance to repay a mortgage. The trend now, is to lower wages, and temporary and insecure work. That's why you have a housing crisis.

Yup up to the 80s as long as you had a job, which until the 70s you couldn't have as a married woman,at the same time you also had mass emigration. In our family all of my parents siblings emigrated in families of 6 or 7 in the 50s and 60s. Most came back some didn't, Out of their kids, I was one of the first to get a job in Ireland, everyone grew up assuming they would be off to London or New York as soon as they finished education.that kind of keeps a cap on rents and house prices when entire generations leave the country.
As happened from 2008 to 2013

Icepick

xpletiv wrote: »

Sure half the TD's are landlords. They're hiking their income up with rent. Why would they change it?! It benefits them directly. Not the country. They dont give a ****e about the country.

Source?

jamesthepeach

Icepick wrote: »

Source?

That one is trotted out all the time.

It's actually higher.
If you have a pension you are a landlord. So most people are.

Peter Flynt

jamesthepeach wrote: »

That one is trotted out all the time.

It's actually higher.
If you have a pension you are a landlord. So most people are.

Complete nonsense.

You're a landlord if you own property and rent it out to someone else.

Not because some pension fund which you draw your pension from owns property.

jamesthepeach

Peter Flynt wrote: »

Complete nonsense.

You're a landlord if you own property and rent it out to someone else.

Not because some pension fund which you draw your pension from owns property.

So you don't think pension funds have a large interest in rental property. Ok then.

wordofwarning

Peter Flynt wrote: »

On a much more simplistic and fundamental level all resources from this state have been provided and continue to be provided to financial institutions and the very rich in society through various schemes to avoid paying tax and to ensure that their hobbies (like horse racing) are heavily subsidised. All of this as the government puts up a fight against the EC for stating that Ireland is owed 13,000 million in unpaid taxes from Apple. Ireland is a tax haven run for the very rich.

We are a tax friendly nation and everyone profits from it. A majority of corporation tax is paid for by a handful of corporations(most are you guessed it, foreign MNCs). MNCs now employ 1 in 5 directly or indirectly. MNCs benefit everyone in this society. Like everything, they benefit more so than others

Peter Flynt wrote: »

As this occurs the emphasis is placed on austerity to pay for this luxury. Housing shortages and homelessness are a very obvious visible sign of what has occurred but there are others we have always lived with - A desperate health service who no one is interested in fixing (which forces people to take out health insurance) and a vastly underfunded "free" education system (where young teachers are not paid properly) are just two. Everything is done on the cheap because those who can pay won't.

The top 1% in Ireland pay 21% of all income taxes. The top 10% of income earners in this state pay around 70-80% of all income taxes. Ireland has the most progressive income tax system in the OECD. So I am curious who are the people not paying their fair share?

Peter Flynt wrote: »

To invest in a comprehensive housing plan involves a long term plan to ensure citizens are housed in areas with suitable facilities so as to prevent social deprivation. Governments in IRL have long since rid themselves of this "nuisance" although it doesn't stop them requiring property tax from people who are paying exhorbitant management fees.

LPT is 0.17% of the property value and based on a property value that is a fraction of what the property is worth in 2017. Our LPT is likely without a doubt the lowest in the OECD. Why should someone who pays management charges be exempt from LPT?

The state refuses to intervene in the property market as it does not have the funds. I know people like to think that there is a ton of untaxed money sitting on the table ie whether it be MNCs or the top 1%. The matter is the state has taxed MNCs and the wealthy as much as it likely can. If we want to build housing, the bottom 50% in society who are to benefit from this housing will likely have to pay more/some taxes. But that won't happen, as it undesirable

Peter Flynt

jamesthepeach wrote: »

So you don't think pension funds have a large interest in rental property. Ok then.

I do, but it's complete nonsense to state that someone who may not own property (or who has never owned property) and who happens to claiming a pension allied to one of those pension funds is now suddenly a landlord.

If that's the case everyone in the country is a banker (due to state owned banks), or a landlord (via NAMA).

Peter Flynt

wordofwarning wrote: »

We are a tax friendly nation and everyone profits from it. A majority of corporation tax is paid for by a handful of corporations(most are you guessed it, foreign MNCs). MNCs now employ 1 in 5 directly or indirectly. MNCs benefit everyone in this society. Like everything, they benefit more so than others

Is that what they call tax havens now?
Tax friendly nations.

A corporation tax rate of 12.5% is a subsidy to foreign MNCs and anyone who works in one those is therefore effectively getting their job subsidised also.

CT in Germany 33%, France 33%, Denmark 22%, Finland 20%, Paddytaxhaven 12.5%

For us we think that the 12.5% is the golden goose laying the egg and we're terrified as a nation of altering that rate. . . MNCs are only too aware of that.

The top 1% in Ireland pay 21% of all income taxes. The top 10% of income earners in this state pay around 70-80% of all income taxes. Ireland has the most progressive income tax system in the OECD. So I am curious who are the people not paying their fair share?

One of the great myths. In the past the Irish all said ten Hail Marys before bedtime. Now I think some of us tell ourselves over and over again that "we're the most progressive tax system in the world" instead. Like the saying "the bigger the lie, the more people that will believe it"

Income tax is just 41% of the tax system.
Ireland has one of the highest VAT rates in the world at 23% with the bottom 10% paying nearly 30 per cent of their incomes in indirect taxes with the top 10 per cent paying just 6 per cent.

The state refuses to intervene in the property market as it does not have the funds.

It does have the funds. Politics is about choices and we choose not to build houses. It really is as simple as that.

When we were a much poorer country in the 1960s we found the funds.

The_Conductor

Peter Flynt wrote: »

Is that what they call tax havens now?
Tax friendly nations.

A corporation tax rate of 12.5% is a subsidy to foreign MNCs and anyone who works in one those is therefore effectively getting their job subsidised also.

CT in Germany 33%, France 33%, Denmark 22%, Finland 20%, Paddytaxhaven 12.5%

For us we think that the 12.5% is the golden goose laying the egg and we're terrified as a nation of altering that rate. . . MNCs are only too aware of that.

Its moving way beyond the remit of this forum- however, I feel I need to point out that despite Ireland having a corporation tax rate of 12.5%- the effective rate of tax paid in Germany, France, Denmark and definitely Finland- is actually lower than that paid in Ireland. All of the countries you've named- have quite remarkable allowances and methods for companies to reduce their taxable income and net tax due to the respective exchequers. The French- in particular- who are very fast to point at the Irish 12.5% rate- ironically pay the lowest effective rate of corporation tax in Europe.

Effective rate of tax- is very different from the headline tax rate- and in an Irish context- the MNCs pay an awful lot closer to the headline 12.5% rate of corporation tax- than do MNCs in any of the other countries you've named.

Its not often mentioned- but by god, its highly valid- and deserves to be brought to the fore. Its a pity the government don't harp on about effective taxation rates more- however, there is a damn good reason they don't- some Einstein would apply it to personal taxation rates- and a riot would ensue..........

Sleeper12

....... wrote:

This post has been deleted.

I can't speak for the rest of the country but in Dublin people paid for their council house. Houses built in the 50's the tenants paid rent till the 80's or 90s. That's 30 or 40 years. Then they got the option to buy the house at a reduced rate because they had already paid rent for 30 odd years.
No one got a free house.
The mistake that the council made was not continuing to build these homes. They were self financing & they actually made a profit on them over the years

The_Conductor

Guys- remember the mantra- if you disagree with another poster- refute their post- without attacking the poster.
It is *not* acceptable behaviour to demand to know someone's tax details- and then to use their remarkable candour- as some sort of a baton to hit them over the head with. Cop on guys. Its not hard to remain civil towards one another- and to be brutally honest- taking the thread in this direction is unacceptable on so many different grounds.

Cop on.

Peter Flynt

The_Conductor wrote: »

Its moving way beyond the remit of this forum- however, I feel I need to point out that despite Ireland having a corporation tax rate of 12.5%- the effective rate of tax paid in Germany, France, Denmark and definitely Finland- is actually lower than that paid in Ireland. All of the countries you've named- have quite remarkable allowances and methods for companies to reduce their taxable income and net tax due to the respective exchequers. The French- in particular- who are very fast to point at the Irish 12.5% rate- ironically pay the lowest effective rate of corporation tax in Europe.

Effective rate of tax- is very different from the headline tax rate- and in an Irish context- the MNCs pay an awful lot closer to the headline 12.5% rate of corporation tax- than do MNCs in any of the other countries you've named.

Its not often mentioned- but by god, its highly valid- and deserves to be brought to the fore. Its a pity the government don't harp on about effective taxation rates more- however, there is a damn good reason they don't- some Einstein would apply it to personal taxation rates- and a riot would ensue..........

Since you raised the issue you won't mind if I respond.

No one on here is going to claim to be an expert with the intricacies of any taxation system. Suffice to say that the effective tx rate that you refer to, which are obviously further incentives to reduce the CT rate, also apply in Ireland also.

Here is a link from 2013 where Apple announced that they pay 2% tax on their subsidiaries in Ireland.

https://www.rte.ie/news/business/2013/0521/451564-apple-tax-arrangements/

Peter Flynt

Peter Flynt wrote: »

Since you raised the issue you won't mind if I respond.

No one on here is going to claim to be an expert with the intricacies of any taxation system. Suffice to say that the effective tx rate that you refer to, which are obviously further incentives to reduce the CT rate, also apply in Ireland also.

Here is a link from 2013 where Apple announced that they pay 2% tax on their subsidiaries in Ireland.

https://www.rte.ie/news/business/2013/0521/451564-apple-tax-arrangements/

They are a massive source of employment of course we should be giving them tax breaks.

The_Conductor

Aarav Gorgeous Blob wrote: »

They are a massive source of employment of course we should be giving them tax breaks.

Tax breaks- fine- providing they are equally applicable to all companies.
Once any particular tax break is associated with one company- or close knit sector- but not others- it becomes illegal state aid.

With respect of the 2% pledge Apple made- its a damn sight better than the net amount they previously paid- however, it is making a mockery of our 12.5% corporation tax rate- and indeed, is highlighting the manner in which it somehow doesn't apply to them.

I think everyone should pay their fair share of tax. If Apple are routing sales through Ireland- to avail of our 12.5% corporation tax rate- then pay the bloody 12.5%. If they want to reduce this- by claiming the costs of development work etc here- then- conduct the development work etc here.

We cannot continue this charade of allowing multinational companies write of the costs of conducting development work or other costs (such as exploration costs) incurred elsewhere- on cashflow reported in Ireland. Want to know why Shell paid so little tax- its because the cost of any dud test wells they drilled over the duration- globally- were offset against Irish income from the likes of the Corrib gas field........... This is nuts- I can't even say its mortgaging the country for some end- because, quite simply, its not.

If we have a 12.5% corporation tax rate- companies should pay it- or the intellectual capital of the country should increase by a commensurate amount by research conducted here- if they are allowed offset research etc- against the 12.5%......... As for writing off costs incurred elsewhere- honestly- even the mafia didn't do this.