Income tax increase for super rich - Can i hear a coherent argument against?

Osgoodisgood · 02-12-2011 12:51PM

veryangryman wrote: »

Who the f**k is calling them criminals? Were talking about the option of putting food on peoples plates or letting better off people have more money than they can spend. Good for them that their that wealthy - fair deuce. But they can afford to help out

They already "help out" by paying an extremely disproportionate percentage of the total income tax revenues. You'd just prefer them to pay even more.

It's begrudgery and it's not very pretty.

woodoo · 02-12-2011 12:56PM

How much does Denis O'Brien, Tony O'Reilly or Dermot Desmond pay in tax here i wonder?

markpb · 02-12-2011 12:57PM

woodoo wrote: »

How much does Denis O'Brien, Tony O'Reilly or Dermot Desmond pay in tax here i wonder?

Does it really matter? He's not Irish. How much do Richard Branson or Richard Broadbent pay here?

seamus · 02-12-2011 12:58PM

Liam Byrne wrote: »

A "luxury" ? Ah FFS have we regressed that much into libertarian capitalist cloud cuckoo land that a friggin portable tv is a luxury ?

Is it an essential? No. Therefore it's a luxury.

The entire crux of your argument is that some people earn more than others, therefore those on higher wages have a duty to help out those on lower wages.

There has to be a balance between building an equitable society where everybody has a basic level of subsistence and creating a socialist society where everyone has the same level of subsistence.

We already have the former, you're arguing for the latter. It's very Irish. For some reason we don't look at the wealthy guy and dream about being him one day, instead we look at him and think about ways that we can drag him down a notch.

02-12-2011 12:58PM

How about not paying stupid pensions and salaries to pencil monkey civil servants and failed politicians

irelandrover · 02-12-2011 12:59PM

bnt wrote: »

There's a flaw in the analogy, however: it assumes they're all drinking beer. The rich people would be drinking champagne and cognac, which cost more. It would be unjust to make rich people pay more for the same products and services as everyone receives: the idea is to make them pay more because they take more. Which they do - not just directly, but indirectly too.

For example: Richard Branson probably hasn't seen the inside of a NHS Hospital in 40 years, unless he was visiting someone. So he hasn't benefited directly from the NHS. He has benefited indirectly, however, through his UK employees. Unless they all have comprehensive health insurance, which I seriously doubt, they've used the NHS at some point, and Virgin has benefited. The same is true of the roads, the railways, the education system, the skies, natural resources like water, and the general benefit of operating in a civilised, governed country. No business can operate in an anarchy, and making a country "work" costs money.

taking your example about Richard Branson shows just how unfair the tax system is but in the opposite way that you meant. Richard Branson pays about 21 times more tax than average and doesnt even use the services that his tax money pays for.

bnt · 02-12-2011 01:03PM

stevenmu wrote: »

We have a funny mentality in this country that the best way to solve poverty is by making rich people poor, when the obvious thing to do is to make poor people rich.

I don't know who wrote that line, but whoever it was didn't understand even the most basic things about how economies work. It's like that line from The Incredibles:
Helen: Everyone's special, Dash.
Dash: Which is another way of saying no one is.

If everyone is rich, then no-one will be rich. How can that be? Because "rich" in a healthy economy is defined in terms of money, and the money's purchasing power. But money is just a number unless it's backed by something - whether gold, or pork bellies, or just trust (as in a "fiat currency") I'm going to use a couple of extreme examples: they are to illustrate a point, but I'm not saying that I think they would make good policy.

Imagine you could put in place a "Robin Hood" tax: take money away from the rich and give it to the poor, so that everyone had the same amount of money in their bank accounts on a given day e.g. 1 January. The next day, however, the smart enterpreneurial people would be creating more money, increasing their bank balances, while the indolent would be spending money, decreasing their bank balances. At the end of the year, re-balance the accounts again.

So, next year, why should the productive people do any work at all, if they know it's going to be taken from them? This was the Communist model: "from each according to his ability, to each according to his needs". Great in theory, until you realise that "ability" and "need" are not constants, and respond to each other inside the human brain.

OK, so let's make the poor richer, without taking money from the rich. Create new money and give it to the poor. OK, but then you have more money in circulation, which depresses the value of the currency. This happens through inflation, since higher demand means that dealers can start charging more for the same products. When people outside the country want to buy products, they cost more compared to the same products in their countries, and thus your currency is weakened on the foreign exchange markets. There's no point in making more money if it's not backed by more value.

There's this unspoken fallacy that is lurking under the surface here: that all people are equal, and would contribute equal value to an economy if you give them a fair chance. Well, while I think that everyone is born equal, I'm not under any illusions that they remain equal all the way through their lives, and that all inequality is inherently unfair. You don't have to read Atlas Shrugged to understand that some level of inequality between people is both inevitable and necessary. If we're all special, then no-one is special.

psychward · 02-12-2011 01:23PM

seamus wrote: »

TV licence is a luxury spend, not a stealth tax.

Keeping in touch as a human being with other human beings is a necessity not a luxury. This can be done by watching every free channel and ignoring RTE.
On the one hand RTE argue hypocritically that they are indispensable and represent the vanguard of defending and promoting Irish culture (despite the fact Irish culture survived for hundreds of years under hostile conditions minus RTE) and then on the other hand you have stooges telling us that what they provide isn't necessary and is a luxury after all. Well I agree with you that RTE is a luxury, a luxury that should be axed.

Bullseye1 wrote: »

These so called rich are the people who create employment in this country. They do pay taxes and contribute to the money coming into the countries coffers.

We need to tackle the public expenditure first and foremost.

Bail my failed gambles out and I'll create as many jobs as you want. It doesn't do for any group of people to develop an arrogant sense of entitlement. The world isn't divided into super-rich on the one hand and spongers on the other hand. Theres plenty of smart people in the middle who are only in the middle due to a lack of connections or bad luck. All this bailing out the failures nonsense has condemned the talented to play second fiddle to the talentless who are hoarding all the capital and opportunity for themselves. It ain't no meritocracy.

sbsquarepants · 02-12-2011 01:46PM

Gophur wrote: »

I second that. This is the Party which is absolutely clueless when it comes to discussing Economics. Witness Michael McDowell's absolute destruction of Gerry Adams in the Gen Election debate of 2007.

.

Jesus christ!
Good point, cos as we all know the governments economic policy was spot on round about then wasn't it!

gerryo777 · 02-12-2011 01:54PM

foxyboxer wrote: »

I like this analogy....

Suppose that every day, ten men go out for beer and the bill for all ten comes to €100…
If they paid their bill the way we pay our taxes, it would go something like this…
The first four men (the poorest) would pay nothing.
The fifth would pay €1.
The sixth would pay €3.
The seventh would pay €7..
The eighth would pay €12.
The ninth would pay €18.
The tenth man (the richest) would pay €59.
So, that’s what they decided to do..
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by €20″. Drinks for the ten men would now cost just €80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the €20 windfall so that everyone would get his fair share?
They realized that €20 divided by six is €3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid €2 instead of €3 (33% saving).
The seventh now paid €5 instead of €7 (28% saving).
The eighth now paid €9 instead of €12 (25% saving).
The ninth now paid €14 instead of €18 (22% saving).
The tenth now paid €49 instead of €59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got a euro out of the €20 saving,” declared the sixth man. He pointed to the tenth man,”but he got €10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a euro too. It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get €10 back, when I got only €2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

Are you saying that the poorest in this country don't pay any taxes?
Considering that they will probably spend all of their income every week, be it welfare or whatever I think you will find that they do indeed pay a fair chunk of tax. It may not be income tax but taxes are taxes!!

Thoie · 02-12-2011 01:55PM

seamus wrote: »

TV licence is a luxury spend, not a stealth tax.

Try again.

psychward wrote: »

Keeping in touch as a human being with other human beings is a necessity not a luxury.

You don't have to do that through television. You can go to your local library, read the papers/magazines for free, and come into contact with humans there. Or you can listen to the radio (which is no longer subject to the TV license).

Ray Palmer · 02-12-2011 01:55PM

It is really simply it is a disincentive to people to work if you tax them an extra amount at some point.

I earned over 100k one year but if I was going to pay over 50% on the earning at 100k I simply wouldn't have done it. So effectively the extra tax would have meant less revenue to the state as opposed to more.

The other point is people would become tax exiles again actually less revenue comes in.

If you had a business where by you would be charged more tax if you expanded you wouldn't expand. Again less revenue and less employment.

You shouldn't punish people for actually earning money you should be encouraging it. THe majority of tax is actually paid by a small minority as is

bnt · 02-12-2011 01:59PM

irelandrover wrote: »

taking your example about Richard Branson shows just how unfair the tax system is but in the opposite way that you meant. Richard Branson pays about 21 times more tax than average and doesnt even use the services that his tax money pays for.

If only you had read the next paragraph ... I didn't mean quite what you think I meant.

I use extreme examples such as Branson because they help to clarify the issues involved. Branson is an example of someone who doesn't live in the UK any more, so he personally costs the UK taxpayer nothing. Most of his £3 billion (or so) is held in offshore trusts - so he will pay almost no tax on it ever again.

His companies, though, are a different story, since Virgin has to operate in countries such as the UK, and they benefit from the UK's infrastructure and laws. So it's fair that Branson is taxed on the his executive compensation he gets from Virgin - whatever it is. (It might be nothing - I don't know.)

I'm all in favour of "fair", but the problems lie in determining just what "fair" is.

seamus · 02-12-2011 02:05PM

bnt wrote: »

His companies, though, are a different story, since Virgin has to operate in countries such as the UK, and they benefit from the UK's infrastructure and laws. So it's fair that Branson is taxed on the his executive compensation he gets from Virgin - whatever it is. (It might be nothing - I don't know.)

His companies pay income tax in the UK. Why should he have to pay on top of this? The earnings which go to pay his salary have already been taxed. You're arguing that they should be doubly-taxed so. He pays tax as an individual. His company pays tax as a company.

If the company didn't already pay tax, I would agree with you. But the company does pay tax, which should be sufficient to cover any additional infrastructure required to cover the cost of their doing business.

sbsquarepants · 02-12-2011 02:13PM

irelandrover wrote: »

taking your example about Richard Branson shows just how unfair the tax system is but in the opposite way that you meant. Richard Branson pays about 21 times more tax than average and doesnt even use the services that his tax money pays for.

Would you reckon he's 21 times richer than the average?
Or is he paying proportionaly almost nothing?
Of course he benefits from the services his money pays for, his trucks drive on roads dont they? His offices have running water don't they? The police will prosecute people who shoplift from his stores and so on.
He may not be in need of a medical card, or rent allowance but that doesn't mean he's not benefiting from taxes.

psychward · 02-12-2011 02:13PM

Thoie wrote: »

You don't have to do that through television. You can go to your local library, read the papers/magazines for free, and come into contact with humans there. Or you can listen to the radio (which is no longer subject to the TV license).

You don't have to use the internet either. It's annoying and wrong when government interferes and dictates in the free market choices of citizens.

foxyboxer · 02-12-2011 02:23PM

gerryo777 wrote: »

Are you saying that the poorest in this country don't pay any taxes?
Considering that they will probably spend all of their income every week, be it welfare or whatever I think you will find that they do indeed pay a fair chunk of tax. It may not be income tax but taxes are taxes!!

The analogy is from an income tax perspective.

Thoie · 02-12-2011 02:45PM

psychward wrote: »

You don't have to use the internet either. It's annoying and wrong when government interferes and dictates in the free market choices of citizens.

I don't understand your point here. I consider the internet at home a luxury that I'm willing to pay for. If I couldn't afford it, I'd give it up, and use the free internet in the library.

gurramok · 02-12-2011 02:54PM

seamus wrote: »

Another fallacy. Do you think that high earners only spend €20k and put the rest in a savings account?

If someone is earning more money, then they are spending more money, therefore they pay more in stealth taxes and VAT than a lower earner.

The "lower earners pay proportionally more VAT" argument also doesn't stand up to scrutiny. A higher % of a lower earners spending will go on essentials - VAT-exempt goods and services. Whereas a higher proportion of a high-earners spending will go on luxury goods subject to full VAT. Lower earners also tend to be more able (and willing) to apply for various tax reliefs than higher earners. Therefore as a proportion of total income, lower earners most likely pay less VAT and other stealth taxes than higher earners.

I also see no logical reason why a higher earner should have to pay more tax just because they have more disposable income. They earned it.

You'd want to look up the Zero VAT list before spouting your lines here.
http://www.revenue.ie/en/tax/vat/rates/index.jsp

The likes adult clothing and shoes is 21% VAT, so does shampoo, toothpaste, towels, bottled water, chocolates, sweets and mobile phone credit! Examples like these do hit the poorest hardest.

I guess you prefer the poor to go around stinky and scruffy living in houses without any TV, just like out of Oliver Twist!

irelandrover · 02-12-2011 02:58PM

sbsquarepants wrote: »

Would you reckon he's 21 times richer than the average?
Or is he paying proportionaly almost nothing?
Of course he benefits from the services his money pays for, his trucks drive on roads dont they? His offices have running water don't they? The police will prosecute people who shoplift from his stores and so on.
He may not be in need of a medical card, or rent allowance but that doesn't mean he's not benefiting from taxes.

yeah, i pulled said 21 randomly. Id say he in fact pays far more than this. but if a person pays 21 time sthe national average they don't get 21 votes, they don't get the police to prosecute someone who steals from them 21 times faster, the fire brigade don't show up 21 times faster. so they pay more for the same service.

bamboozle · 02-12-2011 02:59PM

a new tax band on income over 100k would only bring in around 100m extra, this is small change when we consider the same wealthy people are probably receiving several million in children's allowance and other allowances which should be means tested.

so why not bring in means testing, currently we fork out 2b in childrens allowances, means test it that only 75% of this is given, that's a saving of 500m per year, while we're at it, lets freeze PS pay increments for 5 years, that's a saving of 250m per year.
let bring in metered water rates for all.
lets reduce dail numbers by 20%
lets abolish the seanad
lets introduce a 90% levy on PS pension income over 100k
lets shut down half the county & city councils in the country

seamus · 02-12-2011 03:03PM

bottled water, chocolates, sweets and mobile phone credit

Sorry, what? Yeah, some real essentials there.
Christ on a bike, some people need to get a grip on what constitutes necessities.

Shampoo, toothpaste and towels I'll give you. Clothes? Wealthier people buy more clothes, therefore pay more VAT.

"Poverty" has become such a bandied about term in this country that we're almost being asked to cry for people who can't stick a tenner in their phone this week and have to wait till next week.

It completely devalues the actual meaning of poverty. Here's a clue: If you're buying bottled water and chocolate, you're not poor. You're not wealthy either, but that's your problem, not the state's.

stevenmu · 02-12-2011 03:15PM

bnt wrote: »

I don't know who wrote that line, but whoever it was didn't understand even the most basic things about how economies work.

It was just me. And it wasn't meant as a detailed and accurate examination of the econmic theories and realities of modern Ireland

It's just a simple (and admittedly glib) throwaway comment to describe the pervading mentality in this country, that the best way to solve financial and social inequalities in this country is by taking more and more money from rich people, rather than expecting people to play some part in generating their own success.

Obviously we can't just make everybody "rich", but I would be of the opinion that rather than penalising success through increased taxes (when as discussed elsewhere in this thread, the rich already pay the significant majority of taxes), the correct means of narrowing the social gap, and improving the general economy, is by providing the tools and means for people to create their own success and wealth.

gurramok · 02-12-2011 03:45PM

seamus wrote: »

Sorry, what? Yeah, some real essentials there.
Christ on a bike, some people need to get a grip on what constitutes necessities.

Shampoo, toothpaste and towels I'll give you. Clothes? Wealthier people buy more clothes, therefore pay more VAT.

"Poverty" has become such a bandied about term in this country that we're almost being asked to cry for people who can't stick a tenner in their phone this week and have to wait till next week.

It completely devalues the actual meaning of poverty. Here's a clue: If you're buying bottled water and chocolate, you're not poor. You're not wealthy either, but that's your problem, not the state's.

You yourself said there are millions of poor people who do not pay tax out of a population of around 4.5million.

So please tell us what these millions should eat and clothe themselves with in order to not affected by the 21%VAT?

Snakeblood · 02-12-2011 03:54PM

gurramok wrote: »

You yourself said there are millions of poor people who do not pay tax out of a population of around 4.5million.

So please tell us what these millions should eat and clothe themselves with in order to not affected by the 21%VAT?

I think you're ok on food as long as you don't get bagels.

gurramok · 02-12-2011 04:02PM

Snakeblood wrote: »

I think you're ok on food as long as you don't get bagels.

Bread and butter should do it? :rolleyes: Meat is expensive. Sure lets roll back society to the time of living in caves :P

Snakeblood · 02-12-2011 04:03PM

gurramok wrote: »

Bread and butter should do it? :rolleyes: Meat is expensive. Sure lets roll back society to the time of living in caves :P

There's no vat on it. I thought you were complaining about 21% Vat on food? There isn't. Apart from fancy breads, soon.

Edit: hang on, I think I'm wrong, checking.

2nd Edit: Nope, most food apart from crap (processed foods) is at 0%
Most food and drink sold by retail shops is chargeable to VAT at the zero-rate. This includes most basic foodstuffs, for example, bread, butter, tea, sugar, meat, milk, vegetables etc. Certain items of food and drink are specifically excluded from the scope of the zero-rate. These are taxable at the standard and reduced rates of VAT. Food liable at the reduced rate includes flour or egg based bakery products e.g. cakes, crackers, certain wafers and biscuits. Food and drink liable at the standard rate includes sweets, chocolates, confectionery, crisps, ice-cream and soft drinks.

In addition food and drink liable at the standard rate includes:-

frozen desserts, frozen yogurts and similar frozen products, and prepared mixes and powders for making any such product or similar products;
uncooked confectionery;
savoury snack products made from cereal or grain, fried bread segments, pork scratchings, and similar products and
soft drinks and alcohol.

gurramok · 02-12-2011 04:10PM

Snakeblood wrote: »

There's no vat on it. I thought you were complaining about 21% Vat on food? There isn't. Apart from fancy breads, soon.

What's a fancy bread? Some standard food has no VAT, other foods which may actually be healthy for you has. Seamus has put across the case that all food has zero VAT and that is not true. Eating out has VAT on it too.(http://www.revenue.ie/en/tax/vat/rates/decision-detail-01390.jsp)

Snakeblood · 02-12-2011 04:13PM

gurramok wrote: »

What's a fancy bread? Some standard food has no VAT, other foods which may actually be healthy for you has. Seamus has put across the case that all food has zero VAT and that is not true. Eating out has VAT on it too.(http://www.revenue.ie/en/tax/vat/rates/decision-detail-01390.jsp)

Bagel is a fancy bread. There was a discussion recently how vat may be applied to certain non staple breads, like bagels or paninis because they're not dietary staples, they're essentially luxury items.

Most healthy food has zero vat. Maybe not all of it, but it's largely the processed stuff that isn't zero vat. If you can't survive comfortably on the range of zero vat goods, then you aren't shopping well.

I'm not sure what eating out has to do with it.

gurramok · 02-12-2011 04:17PM

Snakeblood wrote: »

Bagel is a fancy bread. There was a discussion recently how vat may be applied to certain non staple breads, like bagels or paninis because they're not dietary staples, they're essentially luxury items.

Most healthy food has zero vat. Maybe not all of it, but it's largely the processed stuff that isn't zero vat. If you can't survive comfortably on the range of zero vat goods, then you aren't shopping well.

I'm not sure what eating out has to do with it.

Alot of people poor and rich are time poor and eat alot of prepared foods via processed stuff and also eat out at the likes of McDonalds(just look at modern day obesity in kids). This together with the high VAT on clothes, footwear and toiletries does affect the poor more than the wealthy.

Oh as Seamus pointed out, the poor should not be allowed to have a chocolate bar nevermind wash themselves:D

Income tax increase for super rich - Can i hear a coherent argument against?

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