Budget 2024 - The Squeezed Middle

So we’re just about 24 hours away from our overlords the government announcing what (if any) of the tax money we’ve been paying all year will be given back to us in one form or another.

with a reported €2.3bn in cost of living supports my hope is people who work will see some benefits, that said it sounds like there is

Min wage increasing to €12.70 will be great for lower income workers, but probably less for small businesses.

Heather Humphrey certainly seems to have gotten most of her wishes, CB getting a double payment along with an extra “bonus” in January for welfare.

but if you own your house up to €1,250 tax break! Very nice. I believe the rent credit is likely to come to €750 max.

anyway I may run to the shop before the price of fags skyrockets tomorrow.

Fantastic, can’t wait to give in Notice to my employer and get €230+ to sit at home and do nothing everyday.

https://www.boards.ie/discussion/comment/121213291#Comment_121213291

As someone who used to do that because of no available jobs

its not nearly as great as you’d think

in fact I actually left a job last year because it was crap and took a job in McDonald’s due to not finding anything within a few weeks and simply being so bored and depressed not working I couldn’t cope anymore.

True story.

Rampant inflation. Let's increase minimum wage. Why are costs continuing to rise? Oh yes the employer must push up prices to cover wage increases.

https://www.boards.ie/discussion/comment/121213359#Comment_121213359

Yea true.

so I take it you’re cool to have your wages cut if the lower income workers get no increase?

https://www.boards.ie/discussion/comment/121213304#Comment_121213304

Been on it before myself, plenty of stuff to be at to pass time if you want.

No commute, no 50 hr weeks, no people to be dealing with, not getting up at 5.30 am into the miserable weather etc

It aint all bad either like!!

horgan_p

https://www.boards.ie/discussion/comment/121213291#Comment_121213291

The hours are great, but the pay is sh*te

Sleepy

I'd much rather hear of targeted increases in policing, healthcare or education than get a tax credit for all of an extra €20/€30 a month.

https://www.boards.ie/discussion/comment/121213527#Comment_121213527

Trainee Garda salary doubled so that is a plus.

Grayson

https://www.boards.ie/discussion/comment/121213527#Comment_121213527

That's the thing. Giving away money is nice but it's better to invest it in the future. Rather than supplementing peoples incomes it'd be better to work towards a place where it's not necessary.

Jack Daw

From the Irish Independent on Saturday " I've met couples of €250,000 who couldn't cope" .

https://www.independent.ie/irish-news/we-are-all-the-squeezed-middle-now-ive-met-couples-on-250000-who-couldnt-cope/a1076217059.html

Why is it that when there is a genuine issue around working families struggling somewhat a ludicrous example like this is used, if you're on £250,000 and you can't cope it probably means your wasting thousands upon thousands on complete luxury items that nobody needs

https://www.boards.ie/discussion/comment/121213612#Comment_121213612

i saw that and honestly cringed. So 250k a year, about €5k a week between two people and they’re struggling??

fcuk off.

Wanderer78

https://www.boards.ie/discussion/comment/121213359#Comment_121213359

hmmm lets see, some sectors, in particular some large businesses/corporations, in particular energy corporations, currently reporting record profits, this hardly is playing a major role in inflation, hardly!

..oh no, its clearly to do with employees pushing up wages, most increases of which are still lagging inflation rates, yup, this is definitely the workers causing this problem, definitely!

TedBundysDriver

Give with one hand, take with the other.

Twas always the way.

purifol0

We need lower taxes for private sector workers. Right now there earnings are being taken at source to fund a government which has been using their money against them to create a superheated housing market in which they have to compete against the state for somewhere to live.

Anyone who is against tax cuts for workers "because it would worsen inflation" doesnt know a damn thing about economics or inflation, which is solely created but central banks and government borrowing simply magicking up more money, thus increasing supply and therefore the price of everything.

https://www.youtube.com/watch?v=GJ4TTNeSUdQ&t=622s

Not to mention the Irish are some of the biggest savers in Europe, all down to property market of course.

https://www.irishtimes.com/business/2022/07/20/irish-savings-rate-highest-in-euro-zone-at-peak-of-covid-shock/

Secondly reducing the amount of tax the government has, will weaken it and empower the citizen. A good government does not celebrate fleecing its people, ours does. It means more money to buy elections with and then once elected, can figure out ways and schemes to give it to themselves and their supporters.

Smaller government budget means less corruption possible.

Wanderer78

https://www.boards.ie/discussion/comment/121214316#Comment_121214316

...and again, wrong wrong wrong and wrong, most money is now in fact created by financial institutions, we call these 'banks', this money is in fact in the form of credit, and its primary use is to inflate the value of assets such as property...

governments globally have been playing this game for decades now, governments create money by running a deficit, but since deficits are believed to be the work of the devil, they have moved towards surpluses, i.e. which in fact is the act of removing money from the economy...

...which means we primarily run our economies using bank created money, i.e. credit, whos negatives have been explained above.....

...inflation can be caused by both the demand(money supply) and supply side of our economies, our current inflation is primarily a supply side problem, from severe supply chain disruption during covid, and now an energy shock, hence why the price of energy has sky rocketed....

...this can be partly seen by the overall profits major players in our commodity markets and energy markets, many of which are currently recording record profits!

...money is created when banks create a loan, this is the primary source of our money supply, and again, governments only create money when running a deficit!

the size of a government doesnt necessarily equate to the amount of corruption within it, ireland is known to be one of the least corrupt states in the world, certainly when compared to more impoverished nations....

purifol0

https://www.boards.ie/discussion/comment/121214460#Comment_121214460

Yes private central banks create money, governments buy it with bonds. This is the root cause of inflation. Not wage rises or lower taxes. I know this very well thank you very much. Why you wrote a whole tirade about it I do not know.

Would be nice to have a country in charge of its own currency supply (can issue & create it at will DEBT FREE), however we are at the mercy of the private central banks.

Back to the main point, Irish people deperately need tax cuts. Especially private sector workers, who unlike the public sector, dont get money for jam and have to earn every penny, dont have job security and can only dream of a defined beenfit pension. They are the ones keeping the country going, and they are the ones the government has always hit hardest as they mostly aren't unionised and dont have a voting block.

Wanderer78

https://www.boards.ie/discussion/comment/121214523#Comment_121214523

..again wrong, when governments create bonds, this is in fact the beginning stages of 'public' money creation, but in order for this transaction to be complete, there must be purchasers of these bonds, hence bond holders...

...once again, the majority of our money supply in fact comes from the financial sector in the form of credit, i.e. the private sector money supply, this occurs when banks lend, from individuals, right up to major businesses and corporations....

in order for banks to be able to do this, they must meet whats called their 'reserve requirements', which includes deposits, but can also include other assets in their portfolios....

...this is also a part of whats called 'financialisation' of your economy, under such an approach, governments are 'encouraged' to remove themselves from providing critical social functions such as providing housing, and to do as much as it possible to encourage and facilitate other major parts of an economy, in particular the fire sectors(finance, insurance and real estate), in doing so, only that the main priorities of these sectors is to maximize its financial gains from the whole process. this generally leads to highly dysfunctional housing markets, serious supply problems and hyper inflated property prices....

...once again, our current inflationary problems are primarily supply side lead, as explained earlier, i.e. the rapid increase in the price of energy, oh yea, this has been largely privatized over the last few decades also, so happy happy days, record profits, and everyone's a winner!

yes wages are not the cause of this form of inflation, again, its supply side!

...once again, most of our money supply does not come from central banks, as explained, but central banks have been doing their best to also fcuk this up, by maintaining extremely low rates, and facilitating the financial sector with money, via programs such as qe, which in turn just bulked up the reserve accounts of banks at the central banks, allowing them to lend more, i.e. and by allowing them to lend more, and more they did, but not to the likes of sme's and us citizens, but to banks and other 'non bank financial institutions', i.e. shadow banking entities, who in turn used this money to further inflate the value of assets, including engaging in share buy back schemes, etc....

...yes public health care staff and gardai etc, sit around doing fcuk all all day, definitely!

growleaves

The squeezed muddle

https://www.daft.ie/new-home-for-sale/semi-detached-house-pine-extended-glencairn-gate-pine-extended-glencairn-gate-leopardstown-dublin-18/4619596

If you have a mortgage for a house like this and your on 250k it could be challenging to manage, you would also be craked in the head to pay that price for a 3-bed semi.

gameoverdude

https://www.boards.ie/discussion/comment/121213623#Comment_121213623

You know their situation?

Health issues, solicitors, family...

PTH2009

I'm guessing part time workers will only get the small minimum wage increase

https://www.boards.ie/discussion/comment/121215289#Comment_121215289

Wait there’s two increases proposed? 🤔

Galwayguy35

What salaries do the squeezed middle start on?

40 k and upwards?

DataDude

https://www.boards.ie/discussion/comment/121213623#Comment_121213623

€250k a year is nowhere near €5k a week net.

Assuming a fairly standard 10% pension contribution, and allowing for the €110k a year tax bill, you’d be left with about €2,300 a week. €10,000 a month.

€4,000 a month mortgage. Childcare for a 2 or 3 kids at €1,200 a pop in south dublin. Other personal circumstances. It’s really not that shocking that someone in that income bracket could also feel ‘squeezed’. And given those people are contributing nearly €10,000 in taxes a month to fund all the stuff that will be handed out tomorrow, I don’t understand the feeling of contempt towards them.

It’s clearly a great income but people often don’t realise how effectively Irelands 52% tax rate above €70k pulls higher gross incomes down closer to everyone else.

https://www.boards.ie/discussion/comment/121215663#Comment_121215663

Fair enough I had not considered that!

My bad.

MacronvFrugals

https://www.boards.ie/discussion/comment/121215141#Comment_121215141

The drone of the M50 from those houses would drive you mad!

It's interesting that the government is going for an €800 rental credit but €1250 mortgage interest relief, this seems like poor optics.

amacca

https://www.boards.ie/discussion/comment/121215141#Comment_121215141

Like wtf?....it looks like my nephew built it out of lego...

3/4 of a million....for that....in leopardstown.....ffs

Your Avin a larf mate!

amacca

https://www.boards.ie/discussion/comment/121215155#Comment_121215155

Whild I understand what you are saying...It's still a headline designed to infuriate...

ballyharpat

https://www.boards.ie/discussion/comment/121215663#Comment_121215663

For a married couple it works out closer to 145k after tax, that's a fair amount of money- there are many couples, both working, on less than half that that would both would be considered to have very good jobs.

Blarney_man

https://www.boards.ie/discussion/comment/121213398#Comment_121213398

My wages are getting cut every month just because I'm not on minimum wage

Blarney_man

https://www.boards.ie/discussion/comment/121213359#Comment_121213359

And lower tax for middle earners, it's just putting oil on fire, I don't care, but I'm worried about people who have big mortgages and are renting at the moment, this crash will be a monster, 2008. is a baby

hotmail.com

Extra 12 quid for the dole.

Blarney_man

https://www.boards.ie/discussion/comment/121215289#Comment_121215289

Like what the f do you want, you don't even work ffs 🤣

DataDude

https://www.boards.ie/discussion/comment/121215892#Comment_121215892

Agreed, it’s a great income. But, rightly or wrongly, with a big mortgage and childcare costs it could easily start to ‘feel’ like things are a bit tight. You’re certainly not driving around in Ferraris like some people might think.

It’s all relative anyway. A large proportion of the worlds population would look at minimum wage employees in Ireland and not be able to fathom their amazing quality of life and how they could ever need more - It’s easy to look at people who earn more than you and scoff at them if they complain about anything.

As a secondary point they’re also the income group who got hammered by the tax increases in the recession. Someone on €250k loses €1,400pm to the USC. Even someone on €70k only loses €200pm. A median income worker loses basically nothing. It is right and natural that the better off pay most when the exchequer is in trouble, but it then has to follow they get the most back when exchequer is in good health. Yet this is always frowned upon when it comes to it.

It is clear that increasing taxes on higher earners in bad times but actively avoiding giving anything back in good times is totally unsustainable. You can only go to the well of ‘tax the person earning more than me’ so many times before it stops working.

Blut2

https://www.boards.ie/discussion/comment/121216044#Comment_121216044

"You can only go to the well of ‘tax the person earning more than me’ so many times before it stops working."

We have empirical historical evidence that thats not the case, though. The US top marginal tax rate was 92% in the 1950s and high earners still worked in law, finance, medicine and ran their own businesses. They didn't all suddenly decide to stop working, as Varadkar's wing of FG is prone to claiming is about to happen any day here at our much much lower top marginal rate.

Once you get beyond a certain point of income money is no longer the primary motivation for people, its the sense of satisfaction/achievement, social interaction, and/or social status from their careers.

In a country with 3500 homeless Irish children tonight its absolutely ridiculous to be giving any money back to people in the top 10% of income in the country. House the children, hire more gardai, pay our nurses and teachers fairly so they'll stop emmigrating, and then get around to tax cuts for the wealthy.

eightieschewbaccy

I make a pretty comfortable salary and honestly have no issue with welfare increases and would prefer for any cuts to affect lower income workers. And that's where it should be targeted.

DataDude

https://www.boards.ie/discussion/comment/121216225#Comment_121216225

Effective US income taxes on the top 1% in 2023 are largely the same as the were in the 50s because the much talked about 90%+ rates were paid by almost nobody.

They were levied at incomes 10-15x higher than our current top rate. And crucially, at those wealth levels, people are rarely PAYE doctors/lawyers etc.

Tax avoidance/income under-declaration also increase as marginal rates go higher and people at those wealth levels can avail of much cleverer tax planning.

Throw in the globalisation of the world economy and ease of travel now vs the 50s, it’s a pretty poor comparison to draw.

On your last point. Every country will always have something to throw money at. 2023 Ireland is one of the best places in world history to live yet we still have our problems to fix. I agree with you there. Believing the quickest/best way to solve all of those problems is simply ‘taxing the rich more and giving it to the government to spend on stuff’ is a valid economic ideology, but not one I personally subscribe to.

Ironically, I know 3 newly minted medical consultants who’ve left Ireland/decided not to come back in the last 18 months because of the after tax incomes they generate in US. But sure, increase taxes to clear those hospital waiting lists. I’m sure sending more money into the HSE won’t be squandered at all…

Blut2

https://www.boards.ie/discussion/comment/121216329#Comment_121216329

The top marginal rates of 93% in the US were paid by over 10,000 households in the 1950s, nowhere near "almost nobody". The idea that they're largely the same in 2023 is blatently incorrect.

Its not just the US, either - top marginal tax rates were over 90% in the UK, over 75% in Germany, over 70% in France (in the 1980s, not 1950s..) etc wthin living memory. The idea that Ireland's top marginal tax rate of of 52% is unsustainably high is just nonsense. Even right now in Europe there are multiple countries with higher top marginal tax rates - 57% in Finland, 56% in Denmark, 55% in Austria etc. Ireland could at the very least clearly raise the top marginal tax rate to match them.

"Every country will always have something to throw money at." -- so just to be clear, with the limited pool of money available to the state are you saying in October 2023 its better to reduce taxes on someone earning over €100k a year, instead of paying a newly qualified nurse earning €34k a year more? Because every euro spent on tax cuts for the wealthy is literally a euro that could be better spent elsewhere.

DataDude

https://www.boards.ie/discussion/comment/121216540#Comment_121216540

10,000 households in a population of 150,000,000+ is essentially nobody in a statistical sense. There is a reason not a single modern functioning country has 70/80/90%+ income tax rates in 2023. By definition, that means every country who ever did have them, got rid of them fairly sharpish. I wonder why.

Ireland already has the most progressive tax system in the OECD. https://www.oecd.org/gov/gov-at-a-glance-2021-ireland.pdf

The latter point is over simplistic. You will always have people with more and people with less. Saying the answer is always taxing people with more to give to the government to spend on ‘stuff’ is a political/economic idealogy which some agree with and others don’t which is fine.

Your example of the nurse is a great example of something based on emotion rather than outcome based. As someone who’s entire family works in the HSE - my contention is the inability to fill medical consultant posts is a far bigger issue than nurses posts. Therefore tax cuts/pay increases for consultants (top 5%?) would be a better use of government funds for the public outcomes than pay increases for nurses - but of course less popular.

The other major problem in Ireland is housing. I truly believe more money to the state to spend on housing will make our problems worse at least in the short/medium run as it will find its way into schemes like HAP which inflate rentals. They can’t spend their capital budgets in housing aa is and if they ever start building in a big way, watch the cost of building a house rise faster than the children’s hospital.

realitykeeper

If the government follows through with it's threat against people trying to get on the property ladder, emigration of the country's youth will accelerate. Given tax breaks to mortgage holders is designed to prevent the defaults which are needed if property is ever to become affordable to young people.

Shame on the government.

lbunnae

https://www.boards.ie/discussion/comment/121216540#Comment_121216540

Hahahah 10k households in America and you aren't calling that almost nobody? Stats not your strong point.

PopePalpatine

https://www.boards.ie/discussion/comment/121215684#Comment_121215684

It's almost as if they know their voter base.

lbunnae

https://www.boards.ie/discussion/comment/121216942#Comment_121216942

Exact same thoughts myself.

SharkMX

https://www.boards.ie/discussion/comment/121215684#Comment_121215684

Lived in Glencairn years ago. The M50 noise used to drive me nuts. Some people must get used to it though because the neighbors all said they didnt notice it and they lived there for years. I had to move out though. Couldnt even sit in the garden or open the windows.

Quitelife

https://www.boards.ie/discussion/comment/121213623#Comment_121213623

The 250K couple that cant survive Probaby relates to a couple One working as a Columnist in the Irish Independent & Their spouse working in RTE - Both living a bubble the Indo/RTE think is normal Ireland !

jaffa20

It sounds like someone on the lower rate of tax will not be benefiting at all from any USC cuts. Possibly they will give more tax credits only.

enricoh

https://www.boards.ie/discussion/comment/121216225#Comment_121216225

The top 10% of earners are in much demand worldwide, it's debatable what they get for paying so much tax here. Our welfare class are not so much in demand worldwide yet still get it shovelled out every budget!

Multinationals are increasingly complaining they can't convince required staff to move here due to high taxes n no housing. If the multinationals relocate it's goodnight Vienna.

hotmail.com

The whole budget has been leaked. What a farce.

bren2001

https://www.boards.ie/discussion/comment/121217119#Comment_121217119

Would you prefer it was a secret?

https://www.boards.ie/discussion/comment/121217273#Comment_121217273

..