Jürgen Stark: Abandon the Croke Park Agreement, cut welfare

noodler · 15-09-2011 01:58PM

Godge wrote: »

There is a wealth of information out there to be found and it is interesting when you dig into it, especially to explode some myths. Here is one example, the Department of Finance Economic Bulletin for September 2011:

http://www.finance.gov.ie/documents/publications/meb2011/Sept2011.pdf

Buried down on page 14 is some of the detail on the budgetary situation. this year (2011) the General Government deficit is estimated to be €15.663 billion, 10% of GDP. So the first bit of good news is that we are not borrowing €20 billion as a number of posters have suggested here, we are borrowing a lot less. Now remember, the target we have to reach by 2014 is a budget deficit of 3% of GDP which is equivalent to €4.7 billion meaning that the expenditure savings/revenue increases that we need to make are approximately €11 billion.

The Exchequer Balance on the same page is expected to be a deficit of over 18bn in 2011 - this would be the 20bn people refer to.

The key differences, I can ascertain, between the two are on on page 4 of this document

http://budget.gov.ie/Budgets/2009/Documents/BudgetaryTables2009.pdf

So The GGB will include the shortfalls(gains) of local Gov as well as central
The GGB will include the shortfalls (gains) in the Social Insurance Fund. Last time I checked this was in fairly serious deficit (this is where our PRSI contributions go).

Godge wrote: »

Now the actual figure is going to be less than that for two reasons. Firstly economic growth will make the target easier to achieve. The forecast for economic growth is set out on page 2 but applying those figures means a budget deficit of €5.15 billion would be equivalent to 3% of GDP by the end of 2014. This reduces the target for expenditure savings/revenue increases to €10.51 billion by the end of 2014. If you then assume that the interest rate cuts on the IMF/EU will save us €1.1 billion a year (figures of up to €1.5 have been mentioned), then the amount of cuts/taxes, we need to generate over the next three budgets is €9.4 billion. That is a long way from finding €20 billion as some have suggested and the real picture is a lot brighter though the light at the end of the tunnel is still a pinprick:).

The interest rate cuts are a fair point but growth this year and next year is going to be less than predicted in the Stability Prgoramme Update from April. Everyone one else has revised their projections downwards and the DoF are going to do to the same when they release their 4 year plan in November.

Godge · 15-09-2011 02:26PM

noodler wrote: »

The Exchequer Balance on the same page is expected to be a deficit of over 18bn in 2011 - this would be the 20bn people refer to.

.

The €18.745 billion figure relates to 2010. The reason for the explanation of it is that the GGB for 2010 was €49.9 billion due to expenditure on the banks. The €15.663 billion I refer to is the forecast for 2011 which is based on the receipts and expenditure to the end of August.

As for the growth figure, I have previously pointed out that 0% growth would require increased cuts of €450m on top of the €9.4 billion I have already identified as required. I would also point out that there is unlikely to be 0% growth and my figures do not allow for any revenue buoyancy due to economic growth. They only allow for an increase in the size of the economy.

the_syco · 15-09-2011 02:32PM

Permabear wrote: »

This post had been deleted.

Fúck the competition rules. Seriously. Tell the ESB, etc, to reduce the prices. No more of this "keep prices up so the competition can buy it off you and sell it cheaper than you do" bullsh|t.

At the moment, ESB are not allowed to lower it's prices, so what does it do with the left-over money? Give it to the workers.

noodler · 15-09-2011 02:51PM

Godge wrote: »

The €18.745 billion figure relates to 2010. The reason for the explanation of it is that the GGB for 2010 was €49.9 billion due to expenditure on the banks. The €15.663 billion I refer to is the forecast for 2011 which is based on the receipts and expenditure to the end of August.

You are getting muddled up here.

I said the Exchequer Balance (deficit) for 2011 is forecast to be over 18bn and it is - it is forecast to be 18,165m. You are quoting the GGB (15,665m) which does not take local Government into account nor the near-certain deficit of the SIC at the end of 2011.

http://www.finance.gov.ie/documents/publications/reports/2011/spuirelandapr2011.pdf

P24

Godge wrote: »

As for the growth figure, I have previously pointed out that 0% growth would require increased cuts of €450m on top of the €9.4 billion I have already identified as required. I would also point out that there is unlikely to be 0% growth and my figures do not allow for any revenue buoyancy due to economic growth. They only allow for an increase in the size of the economy.

Apologies, I didn't realise you were assuming no growth. But the figures I linked to do assume (the department's deficit figures)= growth of 0.8%.

The EC reckon 0.6% and the IMF reckon 0.4%. If our Government has to downgrade again in November we have need an adjustment of 3.6-4bn.

Godge · 15-09-2011 03:47PM

noodler wrote: »

You are getting muddled up here.

I said the Exchequer Balance (deficit) for 2011 is forecast to be over 18bn and it is - it is forecast to be 18,165m. You are quoting the GGB (15,665m) which does not take local Government into account nor the near-certain deficit of the SIC at the end of 2011.

http://www.finance.gov.ie/documents/publications/reports/2011/spuirelandapr2011.pdf

P24

Apologies, I didn't realise you were assuming no growth. But the figures I linked to do assume (the department's deficit figures)= growth of 0.8%.

The EC reckon 0.6% and the IMF reckon 0.4%. If our Government has to downgrade again in November we have need an adjustment of 3.6-4bn.

Ok, we were looking at different documents, we were comparing apples with oranges, fair enough. You are right that the exchequer balance is to be €18.165 bn in 2011. I am right about the general government balance of €15.663 bn. You are right to point out that some of the difference is due to local government balance and social insurance fund issues. However, some of it is also due to one-off payments to the banks, as that was why the exchequer balance was €49 bn in 2010. Your document is more useful in that it extrapolates out to 2015. let us leave aside the discussion about growth and its impact for a minute (maybe come back in another post if we can find common ground using DoF assumptions).

While your point that the exchequer balance is €18.165 bn, it seems to me that the requirement from the EU/IMF is to reduce the general goverment balance below 3%. What I was attempting to do was quantify and agree the amount of cuts we need to make over the intervening period. Bandying about figures of €20 billion of cuts needed as some here were doing is not accurate.

Take the general government balance. According to DoF figures, we need to cut this from €15.665 bn to €5.035 billion, a cut of €10.65 bn. Allow for the estimated savings on interest rate cuts (€1.1 bn per year conservative) means we need to find €9.55 bn cuts (not too far from my estimate of €9.4 billion with another €450m if growth does not happen).

Looking at the exchequer balance, we need to cut if from €18.165 bn to €6.885 bn a cut of €11.28 billion, once again take away the €1.1 bn in interest savings to give us €10.18 bn.

The difference between us then is that you see €10.18 bn of cuts needed plus you are doubtful on growth predictions so we could round that at €10.6 billion needed while I am on €9.55 billion of cuts based on GGB and accepting growth estimates. The net point though is that both estimates are a long way short of €20 billion. Agreed?

noodler · 15-09-2011 03:57PM

Godge wrote: »

However, some of it is also due to one-off payments to the banks, as that was why the exchequer balance was €49 bn in 2010.

Well the GGB also includes the banking recaps of 2010 - hency why we had the highest GGB in Europe at 32% ish in 2010.

Godge wrote: »

While your point that the exchequer balance is €18.165 bn, it seems to me that the requirement from the EU/IMF is to reduce the general goverment balance below 3%.

This is correct.

Godge wrote: »

What I was attempting to do was quantify and agree the amount of cuts we need to make over the intervening period. Bandying about figures of €20 billion of cuts needed as some here were doing is not accurate.

If someone was to say we spend 18bn (or 20 if they are being creative in their rounding) more than we take in then they would not be incorrect. It isn't really bandying about or anything like that. The EU figures allow us to discount a few items but it doesn't mean we aren't spending them.

Godge wrote: »

Take the general government balance. According to DoF figures, we need to cut this from €15.665 bn to €5.035 billion, a cut of €10.65 bn. Allow for the estimated savings on interest rate cuts (€1.1 bn per year conservative) means we need to find €9.55 bn cuts (not too far from my estimate of €9.4 billion with another €450m if growth does not happen).

Another thing you are probably forgetting is the impact of the interest on the promissory notes we are paying to Anglo and INBS.

http://www.finance.gov.ie/documents/publications/reports/2010/noteprommissory2010.pdf

We obtained a "holiday" on them in 2011 and 2012 but we start paying the interest in 2013 (and that interest will be paid every year for about 10-15 years as the document outlines).

This interest is forecast tp be 1.8bn in 2013 and slowly decreases from there. Serious fly in the oinkment I know.

The bailout of Anglo and INBS will actually cost more like 45bn.

Godge wrote: »

The difference between us then is that you see €10.18 bn of cuts needed plus you are doubtful on growth predictions so we could round that at €10.6 billion needed while I am on €9.55 billion of cuts based on GGB and accepting growth estimates. The net point though is that both estimates are a long way short of €20 billion. Agreed?

I really haven't tried to estimate the cuts in the fashion you are trying - the proposals in the SPU look reasonably accurate to me and am looking forward to the 4-year plan in Oct/Nov.

EDIT: A recent post (Reminder) on the promissory notes by UCC's Seamus Coffey
http://economic-incentives.blogspot.com/2011/09/getting-money-back-from-anglo.html#comments

Paulzx · 15-09-2011 11:47PM

the_syco wrote: »

Fúck the competition rules. Seriously. Tell the ESB, etc, to reduce the prices. No more of this "keep prices up so the competition can buy it off you and sell it cheaper than you do" bullsh|t.

At the moment, ESB are not allowed to lower it's prices, so what does it do with the left-over money? Give it to the workers.

ESB has been able to set its own prices since April last. They had lost enough customers to the other companies and their market share had fallen low enough.

I always thought it was a bizarre situation to actively cause a company to lose customers.

Good loser · 16-09-2011 12:20AM

Godge wrote: »

It is not just me who is suggesting a property tax take of €3 billion. Go back to 2010 and you will see this post from Ronan Lyons suggesting how a land value tax could raise €3 billion.

http://www.ronanlyons.com/2010/07/13/falling-house-prices-or-not-ireland-needs-a-property-tax/

Interestingly, he points out that in 2006, property-related taxes raised €10 billion so €3 billion doesn't seem too high a figure. I stand therefore by my view that a property tax of €3 billion is both achievable and fair.

I would also agree with the abolition of the PAYE tax allowance as it only applies to some taxpayers. However, remember the reason for its introduction back in the late 70s and 80s when it was a response to the perception (largely true) that only those in employment were paying taxes and that the self-employed were largely operating on a black market cash basis. There is anecdotal evidence at least that the black market economy is on the increase again so I would hope that some of the money saved in abolishing it would be put back into revenue for targeting the black economy and social welfare for targetting those claiming and working. In that case the saving by abolishing it may be €1 billion.

Another area I would like to see targetted is child benefit. It is costing the state around €2.25 billion a year. I would abolish child benefit. Too many people are either living abroad, putting it in savings accounts or drinking and injecting it. It is not meeting the objectives it was set up for. I would replace it with a different system. For children under 1, a payment of €80 a month to help families cope with the difficult adjustment to having children (reduced to €40 a month for subsequent children under 1). Nobody else should receive a payment. Instead a system of direct provision of school books, school lunches, school uniforms for those in school and direct provision/subsidy of montessori/creche/childcare places for those under 4. Even with all of that, there should still be a saving of around €1.25 billion as you would also be able to get rid of payments such as the back to education allowance. Interestingly, this sort of set-up is a feature of many European countries already which is why they have little or no child benefit and a indirect side-effect is that it would increase the amount of spending on education.

So those three measures taken together - property tax, abolition of PAYE tax allowance and replacement of child benefit and other payments with direct provision - could save as much as €5.25 billion towards the €9.4 billion needed as pointed out in my previous post.

Thanks Godge.

Have read Ronan Lyons.

It is unclear whether the €3 bn from 'property tax' is to come (in RL's proposal) from a new property tax or includes the 2010 €1.8 bn of existing property taxes i.e. transactional taxes (including VAT?). If the latter is the case the increase in property taxes you are suggesting is €1.2bn.

Politically I still think the Govt would be doing very well to bring in €1bn per annum from a new house property tax (the old rates) by 2015/6. For 2011 their aim is for €150m which is too low.

I would agree that the international norm of 10% of all tax should be got from property.

R Lyons suggestion of a land value tax is not appealing - see very little merit in it. Setting values would be a nightmare.

Godge · 16-09-2011 12:30AM

Good loser wrote: »

Thanks Godge.

Have read Ronan Lyons.

It is unclear whether the €3 bn from 'property tax' is to come (in RL's proposal) from a new property tax or includes the 2010 €1.8 bn of existing property taxes i.e. transactional taxes (including VAT?). If the latter is the case the increase in property taxes you are suggesting is €1.2bn.

Politically I still think the Govt would be doing very well to bring in €1bn per annum from a new house property tax (the old rates) by 2015/6. For 2011 their aim is for €150m which is too low.

I would agree that the international norm of 10% of all tax should be got from property.

R Lyons suggestion of a land value tax is not appealing - see very little merit in it. Setting values would be a nightmare.

There are a variety of ways of getting to the €3 billion, open to considering which is the best. The second homes tax should see a big increase in the budget.

the_syco · 16-09-2011 02:32AM

Paulzx wrote: »

ESB has been able to set its own prices since April last. They had lost enough customers to the other companies and their market share had fallen low enough.

I wonder have they lost too many to be able to cut their costs, and still retain enough money to pay it's unionised staff?

ardmacha · 16-09-2011 02:50AM

The second homes tax should see a big increase in the budget.

Why should it? Why should a person with a modest house and a small cottage in some remote area pay a lot of tax while someone with an opulent house twice the size and three times the value of the two combined pays little or none?

16-09-2011 04:02AM

fliball123 wrote: »

this my friend is a falacy

Not long back from work - what a day. :mad:

It is not a fallacy, it is a fact. GNP in 2011 will be more or less €128 billion. Tax revenues will be more or less €35 billion. Therefore, tax revenues will be a little over 27% of GNP. Go look at the countries who are running smaller deficits or no deficits at all, and you will see that their tax bills are closer to 40% of GNP. In Germany, it's around 37%. In France, it's a little higher at about 41%.

The countries that don't have huge deficit problems have tax bills of around 37-40% of GNP. Ireland has a huge deficit problem but has a tax bill of around 27-28% of GNP. If Ireland had a tax bill of 37-40% of GNP we would have a much smaller deficit problem. And if those countries can have tax bills like they have and still be decent places to live, then so can we. We just have to get real and figure out how it's done.

No fallacies, just facts. If you have different facts, present them. Otherwise, all you are doing is giving a personal opinion. You're entitled to that, but no matter how passionately you believe in your opinion it is still not remotely supported by the facts.

16-09-2011 04:06AM

Head The Wall wrote: »

You stated above that it is not the case that we have a spending problem.

I did not. I said we have a deficit problem which has a lot to do with taxation and relatively little to do with spending.

Instead of pretending I said something that I didn't, are you going to make an effort to debate what I did say?

** Manana. Time for some kip. **

meglome · 16-09-2011 04:13AM

wolfpawnat wrote: »

Gotta love the butchers on the North side and in the Liberties. Any time I am in town I use it as a chance to stock up on chicken and mince meat, the amount of dinners I can cook using those two meats is amazing!!! Also cheap curry pastes from the Chinese Emporiums!!!!!

It's amazing just how much money you can save.

Head The Wall · 16-09-2011 06:43AM

Deleted User wrote: »

It is remarkable how easily the public - including most contributors to this thread - have accepted the line that Ireland has a government spending crisis, even though that is not actually the case.

Let me post your own words for you again.

You're the only person here claiming spending is not a major problem while at the same time stating we have a deficit. You seem to be totally blind to tackling the deficit problem from both ends and just think extra taxation will fix it. I'm still waiting for a source that tells us Ireland doesn't have a spending problem as well as an income problem.

femur61 · 16-09-2011 07:15AM

the_syco wrote: »

Fúck the competition rules. Seriously. Tell the ESB, etc, to reduce the prices. No more of this "keep prices up so the competition can buy it off you and sell it cheaper than you do" bullsh|t.

At the moment, ESB are not allowed to lower it's prices, so what does it do with the left-over money? Give it to the workers.

I assume lads in ESB are protected by the CPA. Pat Rabbit was on Prime Time last night and said numerous times that wages in PS would not be touched, not once did he say it, but numereous times.

deise blue · 16-09-2011 07:37AM

femur61 wrote: »

I assume lads in ESB are protected by the CPA. Pat Rabbit was on Prime Time last night and said numerous times that wages in PS would not be touched, not once did he say it, but numereous times.

ESB employees are not covered by the CPA , nor are any other semi state employees.

Indeed the ESB actually paid the first tranche of the National Wage Agreement towards 2016.

The ESB & other semi states are totally autonomous in terms of agreeing pay , terms & conditions & as such the Government play no role in this regard.

Monty Burnz · 16-09-2011 08:17AM

Deleted User wrote: »

I understand your point, and it explains why our tax system became unbalanced. But it doesn't change the fact that we pay relatively less tax than just about everyone else.

Are you certain of this, when indirect taxes are taken into account? I can tell you for certain that our public servants are most certainly paid more than almost anybody else.

Godge · 16-09-2011 10:00AM

Deleted User wrote: »

Not long back from work - what a day. :mad:

It is not a fallacy, it is a fact. GNP in 2011 will be more or less €128 billion. Tax revenues will be more or less €35 billion. Therefore, tax revenues will be a little over 27% of GNP. Go look at the countries who are running smaller deficits or no deficits at all, and you will see that their tax bills are closer to 40% of GNP. In Germany, it's around 37%. In France, it's a little higher at about 41%.

The countries that don't have huge deficit problems have tax bills of around 37-40% of GNP. Ireland has a huge deficit problem but has a tax bill of around 27-28% of GNP. If Ireland had a tax bill of 37-40% of GNP we would have a much smaller deficit problem. And if those countries can have tax bills like they have and still be decent places to live, then so can we. We just have to get real and figure out how it's done.

No fallacies, just facts. If you have different facts, present them. Otherwise, all you are doing is giving a personal opinion. You're entitled to that, but no matter how passionately you believe in your opinion it is still not remotely supported by the facts.

You are looking at the wrong figure. You need to look at total Government revenue and not just taxes. Total Government revenue includes income from fees and charges.

I still think that you would still find that our revenue levels are below Europe but because we charge more fees (think hospital charges, tolls etc.), the gap is less. If I have time later I might try and find the information.

We do need more taxation, but not more income tax.

Godge · 16-09-2011 10:13AM

ardmacha wrote: »

Why should it? Why should a person with a modest house and a small cottage in some remote area pay a lot of tax while someone with an opulent house twice the size and three times the value of the two combined pays little or none?

I really don't mind how a €3 billion property tax is raised. It can be on land value, it can be on property value, it can cover all houses or second houses or a combination of both.

There is probably a hang-up in this country about family-home ownership. A property tax on all homes with a discount on family homes for the value up to the average house price could be one idea.

The property tax could be 0.5% a year with the first X (X being average home price) of a family home being only taxed at 0.3%. Those figures are only for examples, I haven't worked out what is required to raise €3 billion.

AlekSmart · 16-09-2011 12:12PM

Godge wrote: »

I really don't mind how a €3 billion property tax is raised. It can be on land value, it can be on property value, it can cover all houses or second houses or a combination of both.

There is probably a hang-up in this country about family-home ownership. A property tax on all homes with a discount on family homes for the value up to the average house price could be one idea.

The property tax could be 0.5% a year with the first X (X being average home price) of a family home being only taxed at 0.3%. Those figures are only for examples, I haven't worked out what is required to raise €3 billion.

Quite an excellent post Godge,but it displays a clarity of thought which scares the average Irish administrator out of their leather backed chair !

It also needs to be accepted that such taxes or public charges have to be levied on everybody,with only reductions for those in particularly straitened circumstances.

There's no "Probably" about our national pre-occupation with property ownership,it is a totally fabricated occurence which IMO really became Government policy under Martin O Donoghue's meteoric stint as Minister for Economic Planning & Development in 1978.

Whilst abolishing Domestic Rates and Motor Tax were absolutes in terms of electoral success,they remain two central elements in the abandonment of fiscal commonsense which was always going to lead us to where we are today !

As an aside,it is highly relevant to note that since the abolishment of Domestic Rates the Local Authorities have nonetheless maintained the full panopoly of a Rateable Valuation mechanism and indeed the full back-of-house administration which accompanies it.

The cynic in me sees a great synergy between Fianna Faíl's traditional affinity with the Property Developing/Auctioneering/Building industries and the highly focused promotion of "Owning your own Place" which successive Irish Governments forcefully pursued.

My main point being,that the current total collapse of the Irish "way" has its roots far further back than even David McWilliams and Bertie Aherne....:o

fliball123 · 16-09-2011 12:14PM

Deleted User wrote: »

Not long back from work - what a day. :mad:

It is not a fallacy, it is a fact. GNP in 2011 will be more or less €128 billion. Tax revenues will be more or less €35 billion. Therefore, tax revenues will be a little over 27% of GNP. Go look at the countries who are running smaller deficits or no deficits at all, and you will see that their tax bills are closer to 40% of GNP. In Germany, it's around 37%. In France, it's a little higher at about 41%.

The countries that don't have huge deficit problems have tax bills of around 37-40% of GNP. Ireland has a huge deficit problem but has a tax bill of around 27-28% of GNP. If Ireland had a tax bill of 37-40% of GNP we would have a much smaller deficit problem. And if those countries can have tax bills like they have and still be decent places to live, then so can we. We just have to get real and figure out how it's done.

No fallacies, just facts. If you have different facts, present them. Otherwise, all you are doing is giving a personal opinion. You're entitled to that, but no matter how passionately you believe in your opinion it is still not remotely supported by the facts.

I have been looking at this..If you break it down by what we pay in tax 35 billion...how many tax payers..Now I know there are non income tax included but any money created in this country is all driven by the private tax payer..like it or lump it...So if you take the tax payers in this country including the public sector...we have about 1.4 million tax payers...Devide that into 35 billion or if you want to go 1 step further devide the 4 million people into 35 billion and see how much per head we are paying on tax..the figures speak for themselves as well as being down in income tax take despite it rising in the last 4 years..its called the point of diminishing returns...Basically its the effect of over taxing...and combined with our high dole rates..people who are on the lower end of the salary scale feel its better off to leave the job as they get more benefits and more money on the dole ..and those who are highered paid leave the country...You can talk GDP, GNP and fcukin ABC all you want the dole figures, on top of the emigration figures along with income tax take speak Volumes and prove my point.

35billion devided by 4 million is what?? 8750 per head we are paying in tax per year...break that down by month we are paying about 730 a month in tax per head including under 18s, unemployed...Do you get my drift...we are paying too much and will be paying more...Those who are working are being fcuked over left right and centre..not to mention other areas such as toll roads or having to pay a BKI for parking in your job..The country is not exactly trying to help those who generate the wealth..So what do you want to do put more obstackles in their way...We are paying too much and we get very little in comparison when you look at other countries such as the ones you mentioned France, Germany and look at their infrastructure, healthcare, transport system...we are miles behind them yet you expect us to pay more...No thanks...the public sector pay is off the table so public services will be hit and you want us to pay more for a further diminished public service..????

AlekSmart · 16-09-2011 12:51PM

fliball123 wrote: »

.......Any money created in this country is all driven by the private tax payer..like it or lump it...So if you take the tax payers in this country including the public sector...we have about 1.4 million tax payers...Divide that into 35 billion or if you want to go 1 step further devide the 4 million people into 35 billion and see how much per head we are paying on tax..the figures speak for themselves as well as being down in income tax take despite it rising in the last 4 years..its called the point of diminishing returns...Basically its the effect of over taxing...and combined with our high dole rates..People who are on the lower end of the salary scale feel its better off to leave the job as they get more benefits and more money on the dole ..and those who are highered paid leave the country...You can talk GDP, GNP and fcukin ABC all you want the dole figures, on top of the emigration figures along with income tax take speak Volumes and prove my point.

35billion devided by 4 million is what?? 8750 per head we are paying in tax per year...break that down by month we are paying about 730 a month in tax per head including under 18s, unemployed...Do you get my drift...we are paying too much and will be paying more...Those who are working are being fcuked over left right and centre..not to mention other areas such as toll roads or having to pay a BIK for parking in your job..The country is not exactly trying to help those who generate the wealth..So what do you want to do put more obstacles in their way...We are paying too much and we get very little in comparison when you look at other countries such as the ones you mentioned France, Germany and look at their infrastructure, healthcare, transport system...we are miles behind them yet you expect us to pay more...No thanks...the public sector pay is off the table so public services will be hit and you want us to pay more for a further diminished public service..????

Well said that Fliball123,should be a sticky

!

There are now so many Elephants sitting in the Irish parlour that the country resembles the African plains,but this incredibly simple understanding of the need to facilitate the ordinary worker's striving to improve their lot needs to be re-established as a central goal of any rescue plan.

However,incredible as it may seem,official Irish Government Policy is to prosecute and substantially fine any individual attempting to work more than an average 48Hours a week.

http://www.irishstatutebook.ie/1997/en/act/pub/0020/sec0015.html#sec15

A trawl through this particular example of the EU's best leglislative practice will reveal just how much Irish Government Time and Effort is directed to STOPPING people from working.

Whilst the WTA is EU policy,I am aware that many other mainstream EU States are far less devoted to it's strenuous implimentation than our own.

The awful reality,yet to dawn on a large cross-section of Irelands population,is that those societies who recover fastest and fullest from the current unfolding disaster will not be the ones who are leglislating against work,but those who step back and allow their people to just get on with it !

As it curently stands,Ireland's Public Administrators,continue to peddle a line that work,of any kind is largely an optional element in maintaining or improving one's living standards.

Work,as a principle,has to be re-established in Ireland as something which brings with it Rewards,financial,social and monetary...instead,in our somewhat LSD tainted world,work and it's rewards,are seen as some form of endless resource to fund non-workers maintenance of lifestyle...

It's topsey-Turvey !...but it's Irish too ....:D

Scofflaw · 16-09-2011 02:19PM

I have been looking at this..If you break it down by what we pay in tax 35 billion...how many tax payers..Now I know there are non income tax included but any money created in this country is all driven by the private tax payer..like it or lump it...So if you take the tax payers in this country including the public sector...we have about 1.4 million tax payers...Devide that into 35 billion or if you want to go 1 step further devide the 4 million people into 35 billion and see how much per head we are paying on tax..the figures speak for themselves as well as being down in income tax take despite it rising in the last 4 years..its called the point of diminishing returns...Basically its the effect of over taxing...and combined with our high dole rates..people who are on the lower end of the salary scale feel its better off to leave the job as they get more benefits and more money on the dole ..and those who are highered paid leave the country...You can talk GDP, GNP and fcukin ABC all you want the dole figures, on top of the emigration figures along with income tax take speak Volumes and prove my point.

That's not really the case, though. Any company that makes profits from export of goods or services brings money into the country that didn't originate in the domestic economy, and which originates, you could say, with foreign taxpayers. And we do have a largely export-oriented economy.

cordially,
Scofflaw

fliball123 · 16-09-2011 02:29PM

Scofflaw wrote: »

That's not really the case, though. Any company that makes profits from export of goods or services brings money into the country that didn't originate in the domestic economy, and which originates, you could say, with foreign taxpayers. And we do have a largely export-oriented economy.

cordially,
Scofflaw

So if we make a product here and export it...Do these people not pay taxes for the empolyees/companies that are exporting these goods???? So do you think we are not at the point of diminishing returns with taxes or are the dole numbers, emegration numbers and those who are working in the black market just red herrings?? Whats your take on this Scofflaw I believe you to be an above the norm in regards to intellegence within here even if I do not always aggree with you.

Scofflaw · 16-09-2011 02:51PM

fliball123 wrote: »

So if we make a product here and export it...Do these people noe pay taxes for the empolyees/companies that are exporting these goods????

They do - but they also pay taxes on the profit they make from the other country.

Say an Irish company with 3 workers on €35k and one director on €70k makes 1000 widgets and sells them to Germany at a net profit of, say €50/widget. The tax components are, very roughly and using TTRs (Total Tax Rates from the PWC "Paying Taxes" report), about 11.6% on the labour, 11.9% on the profit. So the tax take is €20.3k on labour, and €5.95k on profits.

That's looking at it the same way you're looking at it, in terms of Irish labour, but what you're doing is then dividing the total tax burden on that company (€26.25k) and considering it as purely a burden on the Irish labour, which is inaccurate, because the €5.95k is derived from the labour of German workers, not the Irish ones. As you can see, a lot depends on the export profitability of the company - if the company could make €100 profit per widget, then the overseas profit chunk of the tax paid by the company increases proportionately.

And that's assuming a domestic company where the overseas profit is based on the labour of Irish workers, whereas we have a significant multinational sector which books profits here that don't in any real sense derive from the labour of Irish workers, and which book profits in Ireland out of all proportion to the labour they use here.

Our current trade surplus is €21.3bn, which gives you some (incredibly rough!) idea of how much taxable money is flowing into the country from abroad via trade - about €5k per person so far this year. For comparison, Germany has made €957/capita so far.

cordially,
Scofflaw

fliball123 · 16-09-2011 03:06PM

Scofflaw wrote: »

They do - but they also pay taxes on the profit they make from the other country.

Say an Irish company with 3 workers on €35k and one director on €70k makes 1000 widgets and sells them to Germany at a net profit of, say €50/widget. The tax components are, very roughly and using TTRs (Total Tax Rates from the PWC "Paying Taxes" report), about 11.6% on the labour, 11.9% on the profit. So the tax take is €20.3k on labour, and €5.95k on profits.

That's looking at it the same way you're looking at it, in terms of Irish labour, but what you're doing is then dividing the total tax burden on that company (€26.25k) and considering it as purely a burden on the Irish labour, which is inaccurate, because the €5.95k is derived from the labour of German workers, not the Irish ones. As you can see, a lot depends on the export profitability of the company - if the company could make €100 profit per widget, then the overseas profit chunk of the tax paid by the company increases proportionately.

And that's assuming a domestic company where the overseas profit is based on the labour of Irish workers, whereas we have a significant multinational sector which books profits here that don't in any real sense derive from the labour of Irish workers, and which book profits in Ireland out of all proportion to the labour they use here.

cordially,
Scofflaw

True I take your point but less then 1/4 of the population work? we have 1.4 m out of 4 m working due to students/dole and underage...Do you know what the income tax take was last year??

16-09-2011 03:11PM

Head The Wall wrote: »

You're the only person here claiming spending is not a major problem while at the same time stating we have a deficit. You seem to be totally blind to tackling the deficit problem from both ends and just think extra taxation will fix it. I'm still waiting for a source that tells us Ireland doesn't have a spending problem as well as an income problem.

If you'd prefer to ignore the facts that's a matter for you. I'm not claiming that spending is not a problem. But I am clearly stating that what has been portrayed as a spending crisis is not a spending crisis. Ireland's deficit has two causes. Spending is less of a cause than taxation, and by a considerable distance. Spending should be reduced, but by nowhere near as much as taxation should be increased.

People have been fed a line that our budget crisis is automatically and simply a spending crisis, and they have swallowed it hook, line and sinker. Our budget crisis is caused by two things. We need to fix both factors, or else we will fail to deal with the deficit. And no matter how many trivial side distractions people drag into the discussion to divert from the reality that we need to pay more tax, it does not alter the fact that we need to pay more tax.

Someone mentioned that Germany has universal healthcare and its motorists don't pay tolls. But that's a matter of spending and taxation choices. In France, people pay even more tax than in Germany - and they have to pay tolls on the autoroutes as well. In the Netherlands, the tax bill is more or less the same as in Germany - but Dutch people have to pay for a lot of their medical care. Most Europeans have to pay for their water, but we don't. Other countries pay hefty property taxes and local taxes that we don't pay.

Another poster said that the balance of our spending is wrong, and that we are spending money on the wrong things. As it happens, I agree. But in fairness that doesn't really help the deficit issue. No matter how much we re-balance spending, we're going to have a big deficit if we don't collect the money to fund that spending in the first place.

Someone else said we don't need to have more income taxation. But I haven't said that we do.

This is unpalatable for some people, because what we'd all like is for the deficit to be eliminated while someone else pays the price. But that does not alter the fact that Ireland has a "taxation crisis" that is bigger than our spending problem. We have a weak, ineffective and badly balanced taxation system. Ireland is also one of the most "under taxed" countries in Europe. If we do not fix the system - and increase tax revenues - then all our spending cuts simply will not solve the deficit problem.

Not solving the deficit problem is not an option. If we're serious about fixing the problem, we need to get real.

Scofflaw · 16-09-2011 03:23PM

fliball123 wrote: »

True I take your point but less then 1/4 of the population work? we have 1.4 m out of 4 m working due to students/dole and underage...Do you know what the income tax take was last year??

Tax|Amount 2010
Income tax|€11.276bn
VAT|€10.1bn
Corporation tax|€3.9bn
Excise|€4.7bn
Stamps|€0.96bn
CGT|€0.347bn
CAT|€0.238bn
Customs|€0.229bn

So income tax is about 35% of the total, and about €6.6k/worker on average (employed workforce is c. 1.7m) - but that average conceals huge differences, because the top 0.5% of earners pay something like 18% of the total income tax.

I can recommend Ronan Lyons' quiz and article: http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax/

cordially,
Scofflaw

astonaidan · 16-09-2011 03:35PM

murphaph wrote: »

Of course it doesn't invalidate his argument. He was a few Euro out but his point stands!

Erm, these "austerity" measures are not to "pay Europe", they are because we have a multi-billion Euro current account deficit! If it wasn't for Europe we'd have had to implement real austerity immediately as soon as borrowing on the bond markets became impossible. I wish the Europeans had been able to leave us sort our own mess out tbh. We're a country that generates about 30-35bn in taxes. That's how much we should be spending.

A few euro, By that You mean 187million a year

Jürgen Stark: Abandon the Croke Park Agreement, cut welfare

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