What planet is Noonan living on?

djpbarry · 17-03-2012 10:24PM

liammur wrote: »

The fact is, many people will leave this country for many reasons. High taxes, e.g €660 to tax a 2 litre car, regeneration as your new neighbours, stealth taxes, poor health care...

If the perception of poor health care and high taxes are driving people out of the country, a lot of them are in for a mighty shock when they arrive at their destinations.

liammur · 18-03-2012 02:08PM

djpbarry wrote: »

If the perception of poor health care and high taxes are driving people out of the country, a lot of them are in for a mighty shock when they arrive at their destinations.

I'm interested in that, considering you can easily spend 36 hours on a trolley and our taxes have to rise over the next few years to lower the deficit (let alone pay back debt), what destination will be worse?

The Waltzing Consumer · 18-03-2012 03:04PM

liammur wrote: »

I'm interested in that, considering you can easily spend 36 hours on a trolley and our taxes have to rise over the next few years to lower the deficit (let alone pay back debt), what destination will be worse?

Well that is the situation and the only people you can blame is the Irish electorate for have constantly given FF the go ahead to allow a huge percentage of the working population pay no income tax, and to allow huge increases in social welfare payments and the huge range of benefits to OAPs, lone parent familes and of course, the many perks and benefits to the politicians themselves.

So yes, the country now has to pay back what it created. This was not done in secret, this was out in the open and the majority of the country voted FF back again and again and they probably will again.

As for what destination will be worse? That is subjective.

djpbarry · 18-03-2012 04:30PM

liammur wrote: »

I'm interested in that, considering you can easily spend 36 hours on a trolley and our taxes have to rise over the next few years to lower the deficit (let alone pay back debt), what destination will be worse?

Despite popular belief, healthcare in Ireland is pretty decent by OECD standards. Resources in Ireland's healthcare system compare quite favourably to the UK's for example - Ireland has more nurses, physicians, CT and MRI scanners per head of population than the UK does and roughly the same number of acute care beds (all of which are common indicators employed by the OECD to assess quality of healthcare).

As for taxes, Ireland still has some distance to go before it catches up with other countries. Again, using the UK as an example (I keep bringing up the UK because I live here) the average migrant from Ireland will pay far more in tax here in the UK than they did in Ireland. For example, someone earning €30k per annum in Ireland will pay just under 17% of their income in various taxes and deductions. Someone earning the equivalent in the UK (about £25k at present) will pay about 22.5% and that doesn't include council tax.

I don't really want to drag the thread off-topic by going into a detailed analysis of the cost of living in Ireland versus elsewhere, but suffice to say I see very little evidence to support the popularly held belief (in Ireland) that Ireland is a high-tax country with crap public services and if this is the reason some people are leaving the country (I don't really believe that it is), they're in for a bit of a shock.

later12 · 18-03-2012 04:42PM

Ireland is a high tax country if you're unemployed or under employed and have to pay taxes like the motor tax he alluded to, and duties, and VAT and so on.

The chances of being unemployed or underemployed in emigrant destinations like Australia or Canada is significantly lower, so obviously even higher taxes can be very affordable.

Ellis Dee · 18-03-2012 04:43PM

The question is "What planet is Noonan living on?". The answer is, unfortunately, Earth, just like the rest of us, but I notice that in the last few days he's been talking a lot about a rocket, so maybe there is some hope after all.

Depends, of course, on what kind of rocket he means.

<MOD SNIP>

Save it for the cafe.

djpbarry · 18-03-2012 04:58PM

later12 wrote: »

Ireland is a high tax country if you're unemployed or under employed and have to pay taxes like the motor tax he alluded to, and duties, and VAT and so on.

The chances of being unemployed or underemployed in emigrant destinations like Australia or Canada is significantly lower, so obviously even higher taxes can be very affordable.

Would it not be more meaningful to compare like with like?

later12 · 18-03-2012 05:13PM

Not for the purposes of what is being discussed, no.

It's not about whether taxes are nominally low or nominally high. Taxes have to be assessed relative to an individual's income.

If I were living in Ireland and unemployed or underemployed I would quite confidently say to myself "well, here is a situation where taxes are high relative to my disposable income, but in Australia, Canada or the UK, taxes are low relative to my anticipated disposable income".

It's a pretty neat calculation. If you think all of these people are in for such a dreadful shock when they go abroad, then I wonder why they aren't all going back.

djpbarry · 18-03-2012 06:45PM

later12 wrote: »

If I were living in Ireland and unemployed or underemployed...

But the article you linked to suggests that most migrants leaving Ireland are not unemployed?

later12 wrote: »

If you think all of these people are in for such a dreadful shock when they go abroad...

I've already stated that I do not believe high taxes are driving people from the country.

liammur · 18-03-2012 07:30PM

djpbarry wrote: »

Despite popular belief, healthcare in Ireland is pretty decent by OECD standards. Resources in Ireland's healthcare system compare quite favourably to the UK's for example - Ireland has more nurses, physicians, CT and MRI scanners per head of population than the UK does and roughly the same number of acute care beds (all of which are common indicators employed by the OECD to assess quality of healthcare).

As for taxes, Ireland still has some distance to go before it catches up with other countries. Again, using the UK as an example (I keep bringing up the UK because I live here) the average migrant from Ireland will pay far more in tax here in the UK than they did in Ireland. For example, someone earning €30k per annum in Ireland will pay just under 17% of their income in various taxes and deductions. Someone earning the equivalent in the UK (about £25k at present) will pay about 22.5% and that doesn't include council tax.

I don't really want to drag the thread off-topic by going into a detailed analysis of the cost of living in Ireland versus elsewhere, but suffice to say I see very little evidence to support the popularly held belief (in Ireland) that Ireland is a high-tax country with crap public services and if this is the reason some people are leaving the country (I don't really believe that it is), they're in for a bit of a shock.

I tend to agree with later12. Right now our tax rate isn't very high, but:

Household charge, water charge, vhi, car tax increases are all on the way. Factor in universal social charge, PRSI, a change in tax bands and suddenly it's more than obvious that Ireland is not a low tax country (for citizens - it certainly is for MNCs).

Ellis Dee · 18-03-2012 08:01PM

djpbarry wrote: »

Would it not be more meaningful to compare like with like?

I believe it would be, but it is also actually very difficult to do, because so many things have to be included in the calculation.

For example, I spent many years in what is said to be a high-tax country (Finland), but I also found that my state and municipal taxes paid for a lot of things that people in Ireland have to fork out for separately. One example is education. Every autumn, I see Irish people having to pay considerable sums for school books, school uniforms and various other things like that, but in Finland they are all completely free, and that includes high-quality school meals, medical services, school curators (counsellors) and so on. By rights, the money that people have to pay in Ireland should be included in the tax calculation, but it isn't.:)

Then there is 360 days' maternity leave at nearly full pay, longer at a reduced rate of pay if one chooses, paternity leave, guaranteed municipal kindergarten services at moderate rates for everyone and universal health care and medical services that cost little or nothing. My most recent experience of it involved 17 days in the Helsinki University Central Hospital, MRI scans, a seven-hour bypass operation, blood transfusions, follow-up visits and the chance to phone a couple of specialist nurses and doctors at more or less any time. The bill for all that: €490.

What I would have had to pay in Ireland should likewise be added to the tax bill. The same goes for transport costs. Helsinki (like Stockholm) has one of the best public transport systems in the world, one that is ultra-efficient and heavily subsidised, so I don't need a car. Before anyone screams "socialism", let me point out that the Prime Minister belongs to the Finnish equivalent of Fine Gael, as does the President.:)

In other words, if you start comparing one country with another, you'll soon see that it is not a simple matter. On the plus side in Ireland is that we have the free travel pass for over-66s. But now I hear there's talk of talking even that away.

Godge · 18-03-2012 10:53PM

later12 wrote: »

Ireland is a high tax country if you're unemployed or under employed and have to pay taxes like the motor tax he alluded to, and duties, and VAT and so on.

The chances of being unemployed or underemployed in emigrant destinations like Australia or Canada is significantly lower, so obviously even higher taxes can be very affordable.

This is a ridiculous statement, one of the most over-the-top on these boards.

In over 90% of countries in the world, including most of the OECD, an unemployed person's income would be so low that they would not be able to afford a car so they would not be paying motor tax. Imagine that, Ireland is so generous to its unemployed that they are in a position to complain about motor tax.

Excies duties are paid on alcohol and cigarettes so a simple way to avoid them is to abstain - good for the health, good that Irish government policy makes the cost higher, also they are in other countries too.

VAT is only high on luxury goods, Ireland has many zero-rated goods and the lower rate of VAT (on essential goods) is not that high. Again, the unemployed in say, the UK or Germany would not be able to buy higher-rated VAT goods because the rate of benefit is too low!!!

To sum up, if an unemployed person in Ireland is in a position to complain about taxes, it is not because taxes are high in Ireland, it is because unemployment benefits are high!

later12 · 19-03-2012 04:26AM

Godge wrote: »

This is a ridiculous statement, one of the most over-the-top on these boards.

In over 90% of countries in the world, including most of the OECD, an unemployed person's income...

Here's the problem.

I'm not comparing unemployed with unemployed. A tiny number of emigrants are unemployed in their new destinations.

I'm talking about tax paid as a proportion to disposable income relative tax paid as a proportion of anticipated disposable income in emigrant destinations.

That ought to have been pretty clear, I would have thought.

The Waltzing Consumer · 19-03-2012 01:02PM

later12 wrote: »

Here's the problem.

I'm not comparing unemployed with unemployed. A tiny number of emigrants are unemployed in their new destinations.

I'm talking about tax paid as a proportion to disposable income relative tax paid as a proportion of anticipated disposable income in emigrant destinations.

That ought to have been pretty clear, I would have thought.

I would have to agree with the other poster who criticised your post. It is a very Marie Antoinette complaint when you use car tax, duties and VAT, presumably the higher rate for luxury goods to back up your Ireland is a high tax country for the unemployed and underemployed.

A lot of 1st World countries make their unemployed sell their cars, move into smaller homes and get rid of the "luxury" before they are allowed benefits. They also check their bank accounts quite a lot. Ireland, on the other hand, has definately got a percentage of "aristocratic unemployed" who's lifestyle resembles middle income earners and you seem to be defending this.

djpbarry · 19-03-2012 02:04PM

liammur wrote: »

I tend to agree with later12. Right now our tax rate isn't very high, but:

Household charge, water charge, vhi, car tax increases are all on the way.

Fairly modest household and water charges, it has to be said.

liammur wrote: »

Factor in universal social charge, PRSI...

I already did.

Ellis Dee wrote: »

In other words, if you start comparing one country with another, you'll soon see that it is not a simple matter.

True, but again I’ll stress that my post was in response to someone else claiming that high taxes and poor public services are driving people out of Ireland. Personally, I don’t think that’s true.

Godge · 19-03-2012 03:37PM

later12 wrote: »

Here's the problem.

I'm not comparing unemployed with unemployed. A tiny number of emigrants are unemployed in their new destinations.

I'm talking about tax paid as a proportion to disposable income relative tax paid as a proportion of anticipated disposable income in emigrant destinations.

That ought to have been pretty clear, I would have thought.

Did I misread the post I quoted from?

later12 wrote: »

Ireland is a high tax country if you're unemployed or under employed and have to pay taxes like the motor tax he alluded to, and duties, and VAT and so on.

The chances of being unemployed or underemployed in emigrant destinations like Australia or Canada is significantly lower, so obviously even higher taxes can be very affordable.

No don't think so, you clearly said that "Ireland is a high tax country if you're unemployed." but you then clarified that "I'm not comparing unemployed." Why mention them then?

If you are trying to say that someone employed in the US (so long as they can afford expensive health insurance and significant pension contributions as well as more than the minimum two weeks holidays) is better off than an unemployed person in Ireland, well you may be right.

But similarly, an unemployed person in Ireland is better off than an unemployed person in the UK, Germany, Spain, Portugal, Italy, Greece, Romania, Poland, Latvia, Nigeria, the US and probably everywhere else bar a few Nordics.

I think we can all agree that employed elsewhere is better than unemployed in Ireland, unemployed in Ireland is better than unemployed most other places but the real question this country has to deal with is why employed in Ireland is not significantly better off than unemployed in Ireland.

later12 · 19-03-2012 11:40PM

Godge wrote: »

No don't think so, you clearly said that "Ireland is a high tax country if you're unemployed."

I also said underemployed. But for some reason, you're ignoring that.

My point is not about the unemployed alone - it relates to groups of people on particularly low disposable incomes, of which the unemployed are one such group. Taxes like Vat, the household charge and other taxes which are mere inconveniences for higher earners, hit these low earners and welfare recipients particularly hard.

Trying to shift the goalposts onto welfare transfer rates relative to other countries is somewhat ridiculous for its irrelevance to the point under discussion, and if you intend on trying to go down that route, I suggest you find someone else to do it with.

However, because it is never wise to let these baseless assertions go unchallenged for fear that they may be taken as granted, I would first direct you to a 2011 ESRI paper on Tax, Welfare & Work Incentives (Callen & al.)

There has been concern that this combination may weaken the financial incentive to move from unemployment into employment, and selective examples have been used to support this argument. We showed how such examples can be misleading, failing to take into account the range of factors affecting both benefit entitlements and potential earnings in work. Results using a microsimulation approach and a large scale nationally representative sample point to quite different results. The replacement rate – the ratio of out‐of‐work to in‐work income, one of the standard measures of work incentives – was below 70 per cent for more than 8 out of 10 unemployed people in 2011. Only a small minority – about 3 per cent – faced replacement rates of over 100 per cent.

later12 · 19-03-2012 11:48PM

The Waltzing Consumer wrote: »

It is a very Marie Antoinette complaint when you use car tax, duties and VAT, presumably the higher rate for luxury goods to back up your Ireland is a high tax country for the unemployed and underemployed.

Not all items at the 23% rate are luxury goods. Unless you consider washing up, taking a shower, doing the laundry and walking around in a pair of shoes to be luxury pursuits.

Godge · 20-03-2012 11:07AM

later12 wrote: »

I also said underemployed. But for some reason, you're ignoring that.

My point is not about the unemployed alone - it relates to groups of people on particularly low disposable incomes, of which the unemployed are one such group. Taxes like Vat, the household charge and other taxes which are mere inconveniences for higher earners, hit these low earners and welfare recipients particularly hard.

Trying to shift the goalposts onto welfare transfer rates relative to other countries is somewhat ridiculous for its irrelevance to the point under discussion, and if you intend on trying to go down that route, I suggest you find someone else to do it with.

However, because it is never wise to let these baseless assertions go unchallenged for fear that they may be taken as granted, I would first direct you to a 2011 ESRI paper on Tax, Welfare & Work Incentives (Callen & al.)

That Callan Report was demolished on here immediately after it was published.

The assumptions in it were ridiculous, it took no account of rent allowance, mortgage support, supplementary welfare allowances, back-to-school payments, medical cards etc. It only relied on basic welfare rates. Dig out the threads yourself, the rebuttal was quite detailed.

I have also pointed out that the VAT increase only applied to luxury goods on the higher rate, it did not apply to basic goods (food etc.) on the lower rate, as the unemployed spend more of their income on basic goods than the employed do, the increase in the upper VAT rate was more progressive than an increase in both rates. The household charge argument is ridiculous, only those who own property (i.e. wealth) pay the charge. Low-paid or unemployed people, most of whom cannot afford to buy a property do not pay the household charge, again making it a progressive charge (albeit one on wealth rather than income), in future years when it is replaced by the property charge varying with either the size or value of the property (or both) it will be a better progressive wealth tax. I just don't get how people can make the argument that an increase in VAT on luxury goods or the introduction of a property tax will hit those at the lower end worse. The only way this is true is if the social welfare benefits are way too high.

Finally, if your point was not about the unemployed, why mention them?

tayto lover · 20-03-2012 11:22AM

Noonan is living in cloud cuckoo land with Bertie and his likes.
Ireland is in tatters and they are all in denial.
This article which i have read several times is very true
http://www.irishtimes.com/blogs/generationemigration/2012/03/08/beaming-bertie-indicative-of-all-that-is-wrong-in-ireland/

djpbarry · 20-03-2012 12:41PM

tayto lover wrote: »

This article which i have read several times is very true
http://www.irishtimes.com/blogs/generationemigration/2012/03/08/beaming-bertie-indicative-of-all-that-is-wrong-in-ireland/

What aspect of it exactly is "very true"? Personally, I find the following extremely hard to believe:

"These men coming to the likes of Deptford and Lewisham are not (in contrast to the myth) going into hi-tech jobs or professions, they are scrambling around for a living wage, sleeping on the floor of friends, thinking about alternatives, other places where there might be work."

tayto lover · 20-03-2012 01:07PM

djpbarry wrote: »

What aspect of it exactly is "very true"? Personally, I find the following extremely hard to believe:

"These men coming to the likes of Deptford and Lewisham are not (in contrast to the myth) going into hi-tech jobs or professions, they are scrambling around for a living wage, sleeping on the floor of friends, thinking about alternatives, other places where there might be work."

I have no problem with any of the article and the bit you quoted especially.
I know many who find themselves in those circumstances.

later12 · 20-03-2012 01:31PM

Godge wrote: »

That Callan Report was demolished on here immediately after it was published.

The assumptions in it were ridiculous, it took no account of rent allowance, mortgage support, supplementary welfare allowances, back-to-school payments, medical cards etc.

That's not correct. Apparently, you have not read the report. That is a pity. Included in the table (table 3) of the distribution of replacement rates that I posted was the following statement:

Table 3 summarises the distribution of replacement rates, as estimated using the microsimulation method (outlined in Section 2, and described in more detail in Callan et al., 2007). Key features of this method are that variations in benefit entitlement due to age, family type or household circumstances are taken into account, and variations in the wage that can be expected in the labour market are also captured by predicting the wage on the basis of age, highest educational qualification, gender and marital status. Potential entitlements to Rent and Mortgage Supplement are included in the calculations.

I have also pointed out that the VAT increase only applied to luxury goods on the higher rate

I have also pointed out that unless one considers things like shampoo, washing powder, footwear, washing up liquid as well as a vast range of other common household purchases to be "luxuries", that's also untrue.

xflyer · 20-03-2012 01:32PM

It's not just the highly educated and skilled who are emigrating. It's the ordinary workers for whom there is nothing here. Of course they're sleeping on floors anywhere they can. Most of them came off the dole not exactly flush with money. It's no secret that accomodation in London is expensive.

Noonan's stupid comment does prove how out of touch he is. But of course I'm sure he never wanted for money. Sure some people always emigrated for lifestyle and career reasons. But to pretend the current exodus is somehow a positive thing is utter stupidity.

I had no real good expectations that Enda Kenny's lame duck leadership would result in much in the way of an improvement. I just wanted FF humiliated. But really it's got to a point now where I do feel this FG/Lab mash up is worse than the previous lot.

liammur · 20-03-2012 01:38PM

djpbarry wrote: »

Fairly modest household and water charges, it has to be said.
I already did.
True, but again I’ll stress that my post was in response to someone else claiming that high taxes and poor public services are driving people out of Ireland. Personally, I don’t think that’s true.

I agree the household charge is modest, but I would be more inclined to bet that the household charge will 'rocket' far higher than our economy which Noonan thinks will 'rocket'.

Godge · 20-03-2012 01:40PM

later12 wrote: »

That's not correct. Apparently, you have not read the report. That is a pity. Included in the table (table 3) of the distribution of replacement rates that I posted was the following statement:

I have also pointed out that unless one considers things like shampoo, washing powder, footwear, washing up liquid as well as a vast range of other common household purchases to be "luxuries", that's also untrue.

I did read the report but it was a year ago now, I don't have full recollection of all the points in dismissing it but I do know that it was generally dismissed as being unreliable. If I have time later I will go back and look at it again but if you are accepting it at face value, that is your perogative.

I note the disclaimer does not cover medical cards, back-to-school and supplementary welfare, neither did it cover situations where the half-rate carer's allowance was also being paid. Neither did it take account of the basic costs associated with working (lunches, travel, clothes etc.). all of which make their conclusions unreliable.

Maybe I was wrong on the rent and mortgage but I would need to go back.

later12 · 20-03-2012 01:59PM

Godge wrote: »

I did read the report but it was a year ago now

That's strange, it was only published 5 months ago. Perhaps you should read the report before you criticise its methodology.

Godge wrote: »

I note the disclaimer does not cover medical cards, back-to-school and supplementary welfare

Variations in benefits available for families are included, I have no idea why you are presuming this does not include BTS payments.

Most people will make very limited numbers of trips to their GPs in a year. It is pretty evident, if you look at the distribution of the replacement rates, that such figures (even including a once off €150-250 BTS payment, if it pleases you) would have no material bearing on the overall outcome.

I'm not sure what your point is in relation to supplementary welfare allowance. You do realise it can be partially available to low income earners, is an emergency measure, and is generally only paid to welfare recipients who are having some problem with their welfare claim (the rate of which is the same)? So it's not clear exactly what point you could have here.

You're simply wrong about the report. Nitpicking over medical card entitlement, given the scale of the disparity between welfare incomes and those in employment, is quite remarkable, as is the hysteria that usually surrounds this subject.

djpbarry · 20-03-2012 02:19PM

tayto lover wrote: »

I have no problem with any of the article and the bit you quoted especially.
I know many who find themselves in those circumstances.

Based on the available evidence, they would be a small minority.

liammur · 20-03-2012 03:15PM

xflyer wrote: »

It's not just the highly educated and skilled who are emigrating. It's the ordinary workers for whom there is nothing here. Of course they're sleeping on floors anywhere they can. Most of them came off the dole not exactly flush with money. It's no secret that accomodation in London is expensive.

Noonan's stupid comment does prove how out of touch he is. But of course I'm sure he never wanted for money. Sure some people always emigrated for lifestyle and career reasons. But to pretend the current exodus is somehow a positive thing is utter stupidity.

I had no real good expectations that Enda Kenny's lame duck leadership would result in much in the way of an improvement. I just wanted FF humiliated. But really it's got to a point now where I do feel this FG/Lab mash up is worse than the previous lot.

I don't think Noonan said 'Emigration, 100% is a lifestyle choice'. I think we can assume that everybody knows emigration was forced upon a lot of people, equally we should be able to assume that some people indeed want to emigrate.
In many ways emigration is good for the economy e.g. Denmark paid about €10K for people to go back to their own countries. Small countries should be very careful in the numbers they allow into their countries,,,,,another failing of the previous administration, so maybe they are worse after all.

Godge · 20-03-2012 04:32PM

later12 wrote: »

That's strange, it was only published 5 months ago. Perhaps you should read the report before you criticise its methodology.

Variations in benefits available for families are included, I have no idea why you are presuming this does not include BTS payments.

Most people will make very limited numbers of trips to their GPs in a year. It is pretty evident, if you look at the distribution of the replacement rates, that such figures (even including a once off €150-250 BTS payment, if it pleases you) would have no material bearing on the overall outcome.

I'm not sure what your point is in relation to supplementary welfare allowance. You do realise it can be partially available to low income earners, is an emergency measure, and is generally only paid to welfare recipients who are having some problem with their welfare claim (the rate of which is the same)? So it's not clear exactly what point you could have here.

You're simply wrong about the report. Nitpicking over medical card entitlement, given the scale of the disparity between welfare incomes and those in employment, is quite remarkable, as is the hysteria that usually surrounds this subject.

Have to apologise, it seems I was mixing up this Report with another one on the same issue. It was only when I read it that I realised it was a different one.

My criticisms of this Report are therefore different. Firstly, as with other similar studies (and as I pointed out in my last post), the study takes no account of the extra costs associated with working such as travel, lunches, etc. Furthermore, as it purports to deal with the nuclear family, a provision for childcare, not required by the unemployed should also be included. Secondly, the replacement rates are calculated vis-a-vis the average wage (or 75% of it). Obviously replacement rates are going to be lower when comparing with the average wage. The average wage means there are a lot of people out there earning less than the average. The calculation ignores those. At the very least, the ratio should have been calculated vis-a-vis the lowest decile, but preferably to the minimum wage. As you can imagine, those employers who are experiencing difficulty recruiting are not those offering the average wage and above, it is those offering the minimum wage and a bit above.

Average unemployment payment versus average wage is not the comparison. It is the marginal gain to the unemployed person upon employment at the minimum wage or a little above which determines the propensity of someone to take up employment. Nobody in the academic community in Ireland seems to measure that, presumably because they know the answer as we all do. Anything else is just propaganda masquerading as economic commentary.

What planet is Noonan living on?

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