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How much can we borrow?

mcsean2163

Just heard Stephen Donnelly saying we're going to keep spending as long as it takes.

Gross national debt at €223 billion now.

https://www.ntma.ie/business-areas/funding-and-debt-management/statistics

What's the the figure that causes us to go bust?

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Geuze

View wrote: »

There’s a simple solution to this, namely raise the CT rate to, let’s say, 15% and “ring fence” the additional monies raised. These would be in a fund to be spent, with joint input from the MNC, either on infrastructure that would directly benefit the MNC (eg roads near its offices) or on joint university-MNC R&D programmes with the university and MNC getting to split the profits (somehow) on the fruits of any successful R&D. In both cases the MNC gains a benefit for itself from the additional taxes it would pay.

Given that corporate profits are already taxed twice (first by CT, then by IT if paid out as dividends, or by CGT if the share price rises), why not reduce the CT to 0%?

Lower CT may boost economic growth, without any loss of revenue, as higher profits will be eventually taxed by IT/CGT.

https://www.oecd.org/berlin/46391708.pdf

Geuze

mcsean2163 wrote: »

Agree. Anything at all would be good, 0.5% to 13%. It would be a move in the right direction and placate our EU neighbors a bit.

We have spent decades building up our reputation as a good place to invest.

We have committed to a stable CT regime.

We have attracted massive FDI, creating thousands of well-paid jobs.

We are earning massive CT revenues, it is over €10 billion now.

(In fact, we are earning so much CT we are too dependent on it, IMHO.)

Even SF don't suggest that CT should be raised.

No serious political party suggest we should raise the CT rate.

Anybody who suggest raising the CT rate should reflect on these points.

Wanderer78

Geuze wrote:

Anybody who suggest raising the CT rate should reflect on these points.

Yes we have indeed done very well from our corporation tax structures, but let's call a spade a spade, it's unfair to other countries and to our fellow citizens, it is also long term unsustainable, as corporation financial activities globally, have become systemically dangerous for all humans. We now have a situation whereby in certain economic situations, it is more beneficial to many of these corporations to engage in rent seeking, wealth extraction methods such as share buy backs etc, rather than investing in productive means, I.e. job creation. These activities only truly benefit major share holders, which in many cases is a very small percentage of the population, I.e. accelerating wealth inequality, so enough is enough, these type of activities are dangerous for all humans, including the wealthy. I was glad to see the UK go for an increase of 25%

mcsean2163

Wanderer78 wrote: »

Yes we have indeed done very well from our corporation tax structures, but let's call a spade a spade, it's unfair to other countries and to our fellow citizens, it is also long term unsustainable, as corporation financial activities globally, have become systemically dangerous for all humans. We now have a situation whereby in certain economic situations, it is more beneficial to many of these corporations to engage in rent seeking, wealth extraction methods such as share buy backs etc, rather than investing in productive means, I.e. job creation. These activities only truly benefit major share holders, which in many cases is a very small percentage of the population, I.e. accelerating wealth inequality, so enough is enough, these type of activities are dangerous for all humans, including the wealthy. I was glad to see the UK go for an increase of 25%

Yes and not only that, at some point EU may say, no stop that and then we are really exposed. If companies can't stomach a 50 basis point rise in CT then off with them but we're seriously exposing ourselves by doing nothing.

We borrowed the most in the EU for Covid19 etc.

Geuze

As I stated earlier, Ireland is not a tax haven.

Here is yet more evidence:

http://economic-incentives.blogspot.com/2021/03/latest-country-by-country-reporting.html

mcsean2163

Big write up today about how Ireland is a tax haven.

https://www.businesspost.ie/economics/colin-murphy-leprechaun-economics-are-a-very-real-threat-to-our-national-interest-f2ca8fb3

Apparently there is an issue with the term tax haven and some commentators use this to argue that it is not a tax haven despite many international reports, one Dutch one singling out Ireland as the 5th biggest conduit in the world. They talk of the reputational damage too.

Larbre34

Ireland has been talked of as a "tax haven" for what 20 to 30 years now?

Can't see any evidence that situation has done any reputational damage so far. Ireland has no problem attracting investment, securing beneficial borrowing rates or growing the economy in a very healthy fashion compared to the rest of the World.

mcsean2163

Larbre34 wrote: »

Ireland has been talked of as a "tax haven" for what 20 to 30 years now?

Can't see any evidence that situation has done any reputational damage so far. Ireland has no problem attracting investment, securing beneficial borrowing rates or growing the economy in a very healthy fashion compared to the rest of the World.

Agree. This is because until 2008 are finances were viewed as healthy and little could be done against. When we crashed we got the Troika. What'll we get next time, a known tax haven robbing from our European neighbours?

Larbre34

You're kidding right?

Ireland is the EUs golden child at the moment, a shining example of the benefits of the single market and free movement, thriving even while our nearest neighbour and historical market dependent is committing slow motion suicide.

Even if we did require bailing out again (and I don't see it because we have overcorrected on fiscal responsibility), they wouldn't be punitive about it. All that matters now is showing EU = success, Brexit (or any member leaving) = catastrophe.

Podge_irl

mcsean2163 wrote: »

Yes and not only that, at some point EU may say, no stop that and then we are really exposed.

Stop what exactly?

mcsean2163

Podge_irl wrote: »

Stop what exactly?

Stop a corporation tax rate of 12.5% that facilitates companies not paying their share of tax.

Geuze

Bear in mind that companies don't pay CT. People pay all taxes.

So if CT increases, then either one or all of the following pay the higher CT:

(1) workers
(2) customers
(3) shareholders

View

Geuze wrote: »

Given that corporate profits are already taxed twice (first by CT, then by IT if paid out as dividends, or by CGT if the share price rises), why not reduce the CT to 0%?

Lower CT may boost economic growth, without any loss of revenue, as higher profits will be eventually taxed by IT/CGT.

https://www.oecd.org/berlin/46391708.pdf

The issue of CT is entirely separate from IT. The shareholders of a company can be anywhere in the world, so we gain no benefit from from the IT side of the equation apart from those shareholders that are tax resident in Ireland. Such (Irish) tax residency does not apply for most of the shareholders in our MNCs.

Podge_irl

mcsean2163 wrote: »

Stop a corporation tax rate of 12.5% that facilitates companies not paying their share of tax.

As I am sure has been explained to you before, they have no power or ability to do that. It is a fantasy.

mcsean2163

Podge_irl wrote: »

As I am sure has been explained to you before, they have no power or ability to do that. It is a fantasy.

The EU have the power to put conditions on loans, see Greece.

Biden pushing for 21% corporation tax.

https://www.irishtimes.com/business/economy/biden-s-global-minimum-tax-rate-carries-big-dangers-for-ireland-1.4525075?mode=amp

Podge_irl

mcsean2163 wrote: »

The EU have the power to put conditions on loans, see Greece.

Biden pushing for 21% corporation tax.

https://www.irishtimes.com/business/economy/biden-s-global-minimum-tax-rate-carries-big-dangers-for-ireland-1.4525075?mode=amp

We don't need a loan from the EU so it doesn't really matter.

There are also far more countries than just Ireland who do not want member state competency over tax rates to be centralised.

mcsean2163

Podge_irl wrote: »

We don't need a loan from the EU so it doesn't really matter.

There are also far more countries than just Ireland who do not want member state competency over tax rates to be centralised.

We're getting loans because we're in the EU. We're the most indebted per capita in the EU.

Do you think we'll be allowed to grow our debt ever greater?

[Deleted User]

mcsean2163 wrote: »

We're getting loans because we're in the EU. We're the most indebted per capita in the EU.

Do you think we'll be allowed to grow our debt ever greater?

Is there a source for the most indebted per capita statement

Geuze

Deleted User wrote: »

Is there a source for the most indebted per capita statement

A good place to look is the NTMA investor presentation, for data on public debt.

https://www.ntma.ie/uploads/general/NTMA-Investor-Presentation-April-2021.pdf

mcsean2163

[Deleted User] wrote: »

Is there a source for the most indebted per capita statement

A simple Google would have shown you multiple results or even reading back in the thread. Here it is again.

https://www.irishtimes.com/business/economy/ireland-to-have-highest-debt-per-head-in-europe-this-year-1.4503652?mode=amp

We're third in the world after US/ Japan.

FFG will soon be spending a billion a year on housing rental payments, (a huge portion of that long term leases that are more expensive than house purchases), in an attempt to buy the electorate and under the guise of covid19 borrowing.

https://www.thejournal.ie/factcheck-spend-rent-subsidies-social-housing-5004540-Feb2020/

https://www.rte.ie/news/business/2020/1118/1178948-cso-on-haps/

mcsean2163

Geuze wrote: »

A good place to look is the NTMA investor presentation, for data on public debt.

https://www.ntma.ie/uploads/general/NTMA-Investor-Presentation-April-2021.pdf

I think the opposite. It's dolled up data and relative debt.

Absolute debt is debt per capita. If Biden's new tax rate discourages pharma from coming to Ireland or more likely social media leaves we will still be left with the 3rd highest debt per capita in a currency we don't control and that will be unaffordable unless the EU agree to bail out Ireland.

mcsean2163

Also, we've had the strictest government restrictions over the last year in EU.

https://seanmcm.medium.com/how-strict-have-the-covid-19-lockdown-restrictions-been-in-ireland-22c80ea06222

We're spending money like it's water.

mcsean2163

In case anyone wondering about the one billion figure.

https://www.irishtimes.com/business/economy/the-plan-to-tackle-ireland-s-housing-crisis-has-failed-1.4528364?mode=amp

This shift from bricks to benefits has been one of most eye-catching features of the Government’s housing policy. Spending on rent subsidies has doubled since 2016 and will be close to €1 billion this year.

Professor Moriarty

mcsean2163 wrote: »

A simple Google would have shown you multiple results or even reading back in the thread. Here it is again.

https://www.irishtimes.com/business/economy/ireland-to-have-highest-debt-per-head-in-europe-this-year-1.4503652?mode=amp

We're third in the world after US/ Japan.

FFG will soon be spending a billion a year on housing rental payments, (a huge portion of that long term leases that are more expensive than house purchases), in an attempt to buy the electorate and under the guise of covid19 borrowing.

https://www.thejournal.ie/factcheck-spend-rent-subsidies-social-housing-5004540-Feb2020/

https://www.rte.ie/news/business/2020/1118/1178948-cso-on-haps/

FFG? Who is that?

Seth Brundle

mcsean2163 wrote: »

Also, we've had the strictest government restrictions over the last year in EU.

https://seanmcm.medium.com/how-strict-have-the-covid-19-lockdown-restrictions-been-in-ireland-22c80ea06222

We're spending money like it's water.

Providing a link to what i presume is your own blog wouldn't be considered an independent source in fairness!

Seth Brundle

mcsean2163 wrote: »

In case anyone wondering about the one billion figure.

https://www.irishtimes.com/business/economy/the-plan-to-tackle-ireland-s-housing-crisis-has-failed-1.4528364?mode=amp

This shift from bricks to benefits has been one of most eye-catching features of the Government’s housing policy. Spending on rent subsidies has doubled since 2016 and will be close to €1 billion this year.

Which party represented in Dáil Éireann would not have spent that money?

Brussels Sprout

last night's John Oliver show was all about National Debt:

##Mod Note##

No video dumps please

Arthur Daley

Seth Brundle wrote: »

Which party represented in Dáil Éireann would not have spent that money?

All the other boys were doing it. Is that their defence now

mcsean2163

Seth Brundle wrote: »

Providing a link to what i presume is your own blog wouldn't be considered an independent source in fairness!

I take the Oxford data and analyse for Ireland and list the sources. Maths is math, interpret the results the way you like.

Are you challenging the objectivity of math?

Brussels Sprout

I see the John Oliver video I posted above was removed. It's worth seeking out on YouTube as it's quite relevant to this thread.

In summary he talks about how the concerns around the accumulation of the national debt, in America, is quite often coming from a place of bad faith. Specifically The Republican Party didn't seem to care about it when Reagan, Bush and Trump all inflated it to pay for large tax cuts for the wealthy. Instead they only show faux concern about it when the likes of Obama or Biden are in office trying to enacting their own policies.

He mentions how fearmongers like to depict it as something that will all need to be be paid at once to some foreign government (usually depicted as the Chinese) all at the same time. He explains how this is not true, how the largest holder American debt are the American people and that Japan (not China) is actually America's largest creditor.

Obviously that is all USA specific but a lot of it translates to the Irish context. The largest holder of our debt is ourselves via the Central Bank. It's never going to come all due at once. Quite often as well the people jumping up and down about this, you will find, are not specifically angry about the fact that the money is being spent. What they're angry about is more where, and specifically, who, it is being spent on - the 2 most common bugbears being Social Welfare payments (including PUP in the modern context) and Public Sector wages, pensions and benefits.

So McSean2163, since you're the one keeping this thread going, may I ask are you either a recipient of PUP or a public sector employee? (In the interest of fairness and transparency I am neither)