Tax USC cuts and or Public sector pay

draiochtanois · 19-09-2016 04:48PM #1

This post has been deleted.

Godge · 19-09-2016 05:18PM

draiochtanois wrote: »

This post has been deleted.

Why would it be better spent on cutting tax and USC?

You could argue that because private sector earnings are rising, then social welfare and public sector pay should be increased.

The Bishop Basher · 19-09-2016 05:23PM

Godge wrote: »

You could argue that because private sector earnings are rising, then social welfare and public sector pay should be increased.

We tried that before. Didn't end too well...

Godge · 19-09-2016 06:12PM

Swanner wrote: »

We tried that before. Didn't end too well...

I didn't say that we should do that, I am just looking to understand why cutting taxes is better just like that.

Rightwing · 19-09-2016 06:15PM

Welfare and public sector should be cut, let alone increased.

However, the electorate went for the services. Little a Govt can do in the face of such downright stupidity.

Amerika · 19-09-2016 06:40PM

Will Ireland cease to be a tax haven for multinationals because of the EU commission’s order for Apple to pay back the Irish state €13bn in taxes? And will Ireland use much of that money toward helping the private or public sector?

Cookie_Monster · 19-09-2016 10:47PM

How about neither of the above combined with using the increasing funding on CapEx and debt repayment

strandroad · 19-09-2016 10:50PM

Rightwing wrote: »

Welfare and public sector should be cut, let alone increased.

However, the electorate went for the services. Little a Govt can do in the face of such downright stupidity.

Functioning healthcare, education, childcare, transport are services. Increasing cash welfare or paying the same number of public servants more are not.

20-09-2016 08:01AM

Leave USC alone. Take a chunk out of income tax if you want to be seen to make inroads to the marginal rate.

USC is a big hefty ****er of a tax that takes in a lot of money mostly due to its simplicity and ability to negate 'tax planning'. If the marginal rate is a problem (it is) then reducing the income tax bands [whilst keeping USC as is] achieves that, without removing the much-hated-but-ultimately-extremely-useful USC.

Any 'fiscal space' for me should be used to take that marginal rate down, and then begin on some genuinely necessary and hugely economically sound public transport links in the capital.

No pay increases / welfare increases / taking people out of the 'tax net'. Some financially prudent fiscal stuff would be nice for a change. Instead of the rampant vote-buying that leads to difficulties time and time again.

Dardania · 20-09-2016 08:04AM

Deleted User wrote: »

Leave USC alone. Take a chunk out of income tax if you want to be seen to make inroads to the marginal rate.

USC is a big hefty ****er of a tax that takes in a lot of money mostly due to its simplicity and ability to negate 'tax planning'. If the marginal rate is a problem (it is) then reducing the income tax bands [whilst keeping USC as is] achieves that, without removing the much-hated-but-ultimately-extremely-useful USC.

Any 'fiscal space' for me should be used to take that marginal rate down, and then begin on some genuinely necessary and hugely economically sound public transport links in the capital.

No pay increases / welfare increases / taking people out of the 'tax net'. Some financially prudent fiscal stuff would be nice for a change. Instead of the rampant vote-buying that leads to difficulties time and time again.

I have wondered about an idea for a while that your post touches upon - whats the point in having income tax at all, when we could simply have USC account for all the income tax from people? If USC is as progressive as we are told that it is, surely it is a simpler and more fair system to tax people by.

Geuze · 20-09-2016 08:10AM

Yes, a retired Inspector of Taxes suggested to me: replace income tax with USC, i.e. expand USC and abolish income tax.

Dardania · 20-09-2016 08:12AM

Geuze wrote: »

Yes, a retired Inspector of Taxes suggested to me: replace income tax with USC, i.e. expand USC and abolish income tax.

It does feel simpler.

No doubt people would clamour to try transfer their allowances to it...

ThisRegard · 20-09-2016 08:46AM

I found these stats from todays Irish Tax Institute interesting, shows that our tax system can be claimed to be progressive, but it's still the middle Ireland that's paying most of the tax. I think it needs to be restructured somewhat.

I'd like to hear the left wing parties take on the report, I'm sure the clamours coming up to the budget will be to increase the state pension and other social welfare payments.

A worker on €25,000 earns almost 1.4 times the salary of a person on €18,000 but pays 5.6 times the tax.
A worker on €35,000 earns 1.9 times – but pays 10.9 times the tax
A worker on €75,000 earns 4.2 times but pays 44.1 times the tax
A worker on €100,000 earns 5.6 times but pays 65.8 times the tax
A worker on €120,000 6.7 times pays 83.1 times the tax

FreudianSlippers · 20-09-2016 09:17AM

ThisRegard wrote: »

I found these stats from todays Irish Tax Institute interesting, shows that our tax system can be claimed to be progressive, but it's still the middle Ireland that's paying most of the tax. I think it needs to be restructured somewhat.

I'd like to hear the left wing parties take on the report, I'm sure the clamours coming up to the budget will be to increase the state pension and other social welfare payments.

Here's the link for anyone interested: http://www.independent.ie/irish-news/we-must-take-stock-of-our-skewed-tax-system-and-ask-ourselves-if-it-is-even-fit-for-purpose-35063095.html

I have to say I agree with the article for the most part, although they fail to identify a suitable alternative.

For myself, I'd say that we should keep USC, fix the bands and harmonise self-employed rates.

Irish Times also covered it: http://www.irishtimes.com/business/economy/reform-of-warped-personal-taxation-system-almost-impossible-1.2797082

20-09-2016 09:20AM

Godge wrote: »

I didn't say that we should do that, I am just looking to understand why cutting taxes is better just like that.

Cut the taxes and more money is spent.
There are many folks paying hundreds in USC every month and if they weren't paying that they wouldn't be saving it.

Increasing social welfare shouldn't be a priority as we've had no inflation to mention for quite a while.

20-09-2016 11:42AM

Dardania wrote: »

I have wondered about an idea for a while that your post touches upon - whats the point in having income tax at all, when we could simply have USC account for all the income tax from people? If USC is as progressive as we are told that it is, surely it is a simpler and more fair system to tax people by.

http://www.independent.ie/irish-news/politics/irelands-most-hated-tax-universal-social-charge-30804972.html

"The Universal Social Charge requires that everyone makes some contribution, however small, to the provision of services. This charge is separate from income tax which is levied proportionately as income increases," Lenihan argued in vain.

But because USC applies to gross income, and there are no tax credits allowed for it, more people pay it than pay income tax. Therefore, only 25pc of taxpayers are exempt from paying USC, compared with 36pc of workers who are exempt from paying income tax.

Happy for the rates to be played with, but abolition of USC is a poor call imo.

The first foray into widening the tax net in a century and we're seeing a step back from it now.

L1011 · 20-09-2016 12:03PM

Any further reduction in the universality of USC is regressive. Even if its 1% across the board, the very purpose of it universal should have always been maintained. Nobody who is earning something is not using some services.

Suryavarman · 20-09-2016 12:22PM

The USC should be abolished and indirect taxes such as the property tax should increased to make up for the shortfall. A recent Department of Finance white paper showed that Ireland relies far more heavily on taxes on income to raise revenue than our European counterparts. It also showed that income taxes were the most distortionary after capital taxes. Property taxes were the least distortionary.

It's time we stopped shooting ourselves in the foot by overtaxing labour and start placing more emphasis on indirect taxation.

ThisRegard · 20-09-2016 12:24PM

Suryavarman wrote: »

The USC should be abolished and indirect taxes such as the property tax should increased to make up for the shortfall.

Which would result in basically the same group that are paying most of the tax now, paying most of the tax afterwards?

johnnyskeleton · 20-09-2016 12:33PM

L1011 wrote: »

Any further reduction in the universality of USC is regressive. Even if its 1% across the board, the very purpose of it universal should have always been maintained. Nobody who is earning something is not using some services.

It was brought in as a temporary tax. As was income tax, prsi etc.

Also, the fact that something becomes less progressive doesnt mean that the measure is regressive. Its that kind of thinking that has us on the path whereby some people pay most of the tax and some people pay none.

If it were truly universal incomes under 13,000 etc would be subject to it as well. Even if they only had to pay 0.1%, they would at least have to pay some tax and be part of the system.

MeatTwoVeg · 20-09-2016 12:43PM

It's not a binary choice, we shouldn't be cutting USC or increasing pay for the already overly remunerated PS.

Dardania · 20-09-2016 01:00PM

Suryavarman wrote: »

The USC should be abolished and indirect taxes such as the property tax should increased to make up for the shortfall.

This is a good idea - making local authorities responsible for their budgeting would mean people can have a greater impact on their local services.

Never going to happen however - outside of Cork, Dublin and I think Galway too, they all would require top ups...

Suryavarman · 20-09-2016 01:01PM

ThisRegard wrote: »

Which would result in basically the same group that are paying most of the tax now, paying most of the tax afterwards?

That's incorrect but even if it wasn't it's a better of doing it as it creates less distortion in the economy.

K-9 · 21-09-2016 03:10PM

ThisRegard wrote: »

I found these stats from todays Irish Tax Institute interesting, shows that our tax system can be claimed to be progressive, but it's still the middle Ireland that's paying most of the tax. I think it needs to be restructured somewhat.

I'd like to hear the left wing parties take on the report, I'm sure the clamours coming up to the budget will be to increase the state pension and other social welfare payments.

The standard rate cut off point needs to be increased dramatically, people on the average industrial wage are paying the top rate of tax which is ridiculous.

No need to cut tax rate or USC, but that means politicians can't point to something simple and sexy in an election campaign!

chicorytip · 22-09-2016 12:42PM

How is it claimed that we in Ireland have a "progressive" and "equitable" taxation system when those who are earning the minimum wage pay no income tax whatsoever?

Zubeneschamali · 22-09-2016 01:27PM

chicorytip wrote: »

How is it claimed that we in Ireland have a "progressive" and "equitable" taxation system when those who are earning the minimum wage pay no income tax whatsoever?

Since no-one earns less than the minimum (by definition) they pay the least. That's what "progressive" means.

mickdw · 22-09-2016 01:33PM

But progressive is not the term id use where no usc is payable if earning under a threshold of 12k approx but usc on entire earnings is due if you earn a euro more than the threshold.
Crazy stuff.

22-09-2016 01:39PM

ThisRegard wrote: »

I found these stats from todays Irish Tax Institute interesting, shows that our tax system can be claimed to be progressive, but it's still the middle Ireland that's paying most of the tax. I think it needs to be restructured somewhat.

I'd like to hear the left wing parties take on the report, I'm sure the clamours coming up to the budget will be to increase the state pension and other social welfare payments.

All those numbers relate to tax on income, which is only about a third of the total tax take.

So when people say 'person on x pays y times more than person on z" you need to add the qualifier 'in taxes on income'.

No real surprise that the journalists in the Independent are too stupid to understand that not exactly complicated point.

chicorytip · 22-09-2016 02:10PM

Zubeneschamali wrote: »

chicorytip wrote: »

How is it claimed that we in Ireland have a "progressive" and "equitable" taxation system when those who are earning the minimum wage pay no income tax whatsoever?

Since no-one earns less than the minimum (by definition) they pay the least. That's what "progressive" means.

But they pay nothing at all! What's "equitable" about that? Everyone who is earning ought to contribute.

draiochtanois · 22-09-2016 02:16PM

This post has been deleted.

22-09-2016 02:29PM

Cut income, raise spending....

Tax USC cuts and or Public sector pay

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