The Great Covid Divide

Cluedo Monopoly · 05-04-2021 11:02am #1

It strikes me that Covid has created a great divide in Ireland from a financial point of view.

Many people have lost out financially - lost jobs, lost income, lost businesses, lost savings etc...while many other people have benefited financially - increased income, lower costs, increased savings etc. I see the disparity in my own family circle.

It will be interesting what will happen when we have to start paying back the borrowings, balancing the books or paying to stimulate the economy. For example, will it be fair to tax people in the hospitality industry who were on PUP for a year the same rates as people who enjoyed working-from-home and built up their savings?

The people that did well financially will be mad keen to splurge when things open up while the people that struggled will just want to make ends meet again. The divide will be felt for many years. What other impacts will it have I wonder?

Eric Cartman · 05-04-2021 11:08am

If anything it would be fairer that only the people on the PUP and employers taking TWSS had to pay it back , but ofcourse the burden will be shared with those of us who didnt take money from the state during this, ideally knowing Ireland where theres not a hope in hell of us cutting taxes , we roll it all in to cheap debt and just pay it back on the drip going forward

SnuggyBear · 05-04-2021 11:09am

Eric Cartman wrote: »

If anything it would be fairer that only the people on the PUP and employers taking TWSS had to pay it back

Really?

05-04-2021 11:12am

Clearly neither position is in any way tenable tbh

growleaves · 05-04-2021 11:14am

I think there's a misunderstanding on the part of the people who have supposedly benefited financially.

The deficits being run up now will make the whole country poorer and eat into the future income of everyone.

Some people have seen a very short term increase in savings, while at the same time savings rates have decreased yet again from an already very low base.

Now while that may not matter for people putting down deposits on a residence, paying back their mortgages may be more of a challenge than they expect since they could soon be facing depressed wages, increased taxes etc.

Also there will be more 'crises' in the future, as the precedent for sacrificing the economy in the name of safety has been set, and thus more instability leading to defaults.

growleaves · 05-04-2021 11:17am

Eric Cartman wrote: »

If anything it would be fairer that only the people on the PUP and employers taking TWSS had to pay it back , but ofcourse the burden will be shared with those of us who didnt take money from the state during this, ideally knowing Ireland where theres not a hope in hell of us cutting taxes , we roll it all in to cheap debt and just pay it back on the drip going forward

Only if that had been announced beforehand, so that everyone would know that the government were forcing a million people onto welfare and also expecting them to re-pay it out of pocket.

Ace2007 · 05-04-2021 11:20am

growleaves wrote: »

Only if that had been announced beforehand, so that everyone would know that the government were forcing a million people onto welfare and also expecting them to re-pay it out of pocket.

Well a decent chunk of employers have repaid the TWSS, as they weren't entitled to it, and revenue will be checking the rest that claimed it.

Antares35 · 05-04-2021 11:29am

Cluedo Monopoly wrote: »

For example, will it be fair to tax people in the hospitality industry who were on PUP for a year the same rates as people who enjoyed working-from-home and built up their savings?

The people that did well financially will be mad keen to splurge when things open up while the people that struggled will just want to make ends meet again. The divide will be felt for many years. What other impacts will it have I wonder?

People who enjoyed working from home? We haven't been on annual leave, we've still been working, many of us harder than ever and with babies to mind and children to homeschool at the same time.

My guess is that the usual suspects, the middle earners, will be paying this bill for the rest of our lives. I doubt they will take anyone's PUP history into account. Why should they? If you're working, you pay.

Wesser · 05-04-2021 11:34am

So youre proposing that the people who worked really hard for the pandemic including front line healthcare workers... myself included.... and put my health in dangers way......and paid income tax.... which was diverted to those who did not work... should now pay higher tax by way of punishment for working so hard during the pandemic? Are you having a laugh?

Padre_Pio · 05-04-2021 11:35am

The people who will pay will be the people who have always paid.
Middle income earners who have been struggling for years.

Honestly I'm considering leaving Ireland if there's some big tax recoup coming in the next 12 months.

Wesser wrote: »

So youre proposing that the people who worked really hard for the pandemic including front line healthcare workers... myself included.... and put my health in dangers way......and paid income tax.... which was diverted to those who did not work... should now pay higher tax by way of punishment for working so hard during the pandemic? Are you having a laugh?

It wouldn't surprise me in the least if that's what was proposed.

Eric Cartman · 05-04-2021 11:43am

Padre_Pio wrote: »

The people who will pay will be the people who have always paid.
Middle income earners who have been struggling for years.

Honestly I'm considering leaving Ireland if there's some big tax recoup coming in the next 12 months.

It wouldn't surprise me in the least if that's what was proposed.

This is it, but the issue is this has been a wake up call to the necessity of frontline workers , we were already losing medical staff before this due to high taxation and high cost of living , so im sadly predicting that the payback for this will be in a form of a new tax that doesn’t hit public sector workers. Itll be those who had to turn their kitchen into an office , who are about to have a mental breakdown , who have had their employer take this pandemic as an excuse for them to answer emails at 9pm and on saturdays etc.. who are forced to pay for this.

This will be used to further widen the lifetime earnings and pensions gap that gives public sector workers such security and privilege, and give a break to those PUP lower earners from having to pay this back.

is this username available · 05-04-2021 11:52am

We are all going to pay for this. My guess is that there will be a ‘temporary’ Universal Health Charge similar to USC introduced.

To suggest taxing those who worked or did not work throughout the last two years is silly -it would be unconstitutional. No argument on that. The only lever they would have is threshold level.

If things get really bad then they could go after savings and pensions but that is a lesser possibility in my mind

No such thing as free money.

Padre_Pio · 05-04-2021 12:20pm

This COVID divide was flagged before.

The industries most affected by lockdown (retail, hospitality, tourism) are also the ones with the lowest earnings.

So people with little enough money have been earning even less money the past year, while those who can work from home have been saving like mad.

Dr. Bre · 05-04-2021 12:21pm

I’m alright Jack

lawred2 · 05-04-2021 12:25pm

Wesser wrote: »

So youre proposing that the people who worked really hard for the pandemic including front line healthcare workers... myself included.... and put my health in dangers way......and paid income tax.... which was diverted to those who did not work... should now pay higher tax by way of punishment for working so hard during the pandemic? Are you having a laugh?

I agree but who else is going to pay?

The Multinationals?

Akrasia · 05-04-2021 12:29pm

is this username available wrote: »

No such thing as free money.

There actually is, the ECB has been offering (essentially) free money to governments for the past year to help tide economies over the pandemic
This money will be written off over time

Money is a financial instrument amongst many other financial instruments

The flow of money is what matters, not the actual number of ‘money’ in the global economy

As long as there is low inflation or even deflation, central banks can, and should increase the money supply

Turtwig · 05-04-2021 12:31pm

The people struggling the most pre covid will the ones most adversely impacted. Ironically some of these were probably working all during covid as well.

After that the biggest impact will probably fall on the hospitality and services sectors. Though it's hard to predict. Impact is a subjective thing as well. Someone just starting a career or business will likely be impacted much worse than someone well established.

lawred2 · 05-04-2021 12:33pm

is this username available wrote: »

We are all going to pay for this. My guess is that there will be a ‘temporary’ Universal Health Charge similar to USC introduced.

To suggest taxing those who worked or did not work throughout the last two years is silly -it would be unconstitutional. No argument on that. The only lever they would have is threshold level.

If things get really bad then they could go after savings and pensions but that is a lesser possibility in my mind

No such thing as free money.

there is if you have a reserve currency and a central bank willing to print whatever it takes

05-04-2021 12:44pm

Oh but wait, I thought "the young" were going to pay for it?

At least, thats all I've been hearing, for the last 12 months.

05-04-2021 12:50pm

Padre_Pio wrote: »

This COVID divide was flagged before.

The industries most affected by lockdown (retail, hospitality, tourism) are also the ones with the lowest earnings.

So people with little enough money have been earning even less money the past year, while those who can work from home have been saving like mad.

And that will be largely offset by the fact that a high proportion of those working from home will be on higher wages than those working in, say, hospitality and therefore will foot most of the bill when the COVID levy is introduced (on top of the USC). My total deductions are close to 50% of my salary, and likely now to go up. So, yes, I have been WFH, have saved, and am in good shape, but I am also likely to be part of a cohort that ends up footing most of the bill for this

(The disincentive for me to work hard, when deductions are 50% is a debate for the tax forum)

05-04-2021 1:08pm

People in general supported lockdowns so we can’t really complain about the mess ahead.

Yes there will be increased taxes and spending cuts.
Yes, the housing crisis will be worse as we shut construction when no other countries did.
Yes, the hospitals will be a bigger mess.
Yes, mental health will be much worse.
Yes, more people will be dying as a result of lockdown. ( Cancer screenings etc)
Yes, lots of children will have issues after so much missed school etc

Anyways, this is what people supported because they wanted to feel safer.

I’m happy knowing that I didn’t support this.

Antares35 · 05-04-2021 1:16pm

Padre_Pio wrote: »

This COVID divide was flagged before.

The industries most affected by lockdown (retail, hospitality, tourism) are also the ones with the lowest earnings.

So people with little enough money have been earning even less money the past year, while those who can work from home have been saving like mad.

Saving like mad to put a roof over our childrens' heads. We weren't jetting off abroad to have our boobs reconstructed

Ace2007 · 05-04-2021 1:38pm

The funny thing is that if Covid was over tomorrow and people could go anywhere on holidays - majority would be getting on a plane to someone nice - they wouldn't care less about the hospitality sector in Ireland being destroyed over the last year.

People moan about the economy and businesses being lost - but the same people are likely to buy stuff online because it's cheaper than their local shop for instance, or it's handier.

Antares35 · 05-04-2021 1:38pm

Ace2007 wrote: »

The funny thing is that if Covid was over tomorrow and people could go anywhere on holidays - majority would be getting on a plane to someone nice - they wouldn't care less about the hospitality sector in Ireland being destroyed over the last year.

People moan about the economy and businesses being lost - but the same people are likely to buy stuff online because it's cheaper than their local shop for instance, or it's handier.

Good point.

growleaves · 05-04-2021 1:49pm

Ace2007 wrote: »

The funny thing is that if Covid was over tomorrow and people could go anywhere on holidays - majority would be getting on a plane to someone nice - they wouldn't care less about the hospitality sector in Ireland being destroyed over the last year.

The hospitality industry isn't reliant on native protectionism though. Presumably if things were thrown open they would get the same proportion of foreign and native custom as before and so would our EU neighbours and other friendly countries like US.

Barring the hospitality sector from trading is the real issue.

If they needed Irish customers then a patriotic publicity campaign could be organised.

Mr. Karate · 05-04-2021 1:50pm

Wesser wrote: »

So youre proposing that the people who worked really hard for the pandemic including front line healthcare workers... myself included.... and put my health in dangers way......and paid income tax.... which was diverted to those who did not work... should now pay higher tax by way of punishment for working so hard during the pandemic? Are you having a laugh?

These Lockdowns are costing us Billions a day. This has to be paid for at some point. And no doubt the Govt have already insulated themselves from paying for this [Otherwise they would have lost their love for lockdowns last year] The sad reality is that children not even born yet will be on the hook for this as well.

lawred2 · 05-04-2021 1:57pm

Mr. Karate wrote: »

These Lockdowns are costing us Billions a day. This has to be paid for at some point. And no doubt the Govt have already insulated themselves from paying for this [Otherwise they would have lost their love for lockdowns last year] The sad reality is that children not even born yet will be on the hook for this as well.

what?

Klonker · 05-04-2021 1:57pm

Any chance of another raid of our pension funds? I'll actually have something to be raided this time :pac:

05-04-2021 2:07pm

Padre_Pio wrote: »

Honestly I'm considering leaving Ireland if there's some big tax recoup coming in the next 12 months..

If you can afford to leave the country, it'd be a great time to move abroad for a few years. We've been living here for a little over two years now, and we are thinking about moving on.

Klonker wrote: »

Any chance of another raid of our pension funds? I'll actually have something to be raided this time :pac:

It'll be saving, second homes, and bedroom taxes this time round. People seem to think that the country is going to spring back into a boom, once NPHET decides that the country can be re-opened fully. That isn't going to happen, and consequences of the pandemic are going to become clear on an individual, local and national level. Can't wait to see how the banks get on when people start defaulting on loans. Could you have another banking collapse, and another bailout from the tax payer?

Ace2007 · 05-04-2021 2:12pm

tara2k wrote: »

If you can afford to leave the country, it'd be a great time to move abroad for a few years. We've been living here for a little over two years now, and we are thinking about moving on.

It'll be saving, second homes, and bedroom taxes this time round. People seem to think that the country is going to spring back into a boom, once NPHET decides that the country can be re-opened fully. That isn't going to happen, and consequences of the pandemic are going to become clear on an individual, local and national level. Can't wait to see how the bank get on when people start defaulting on loans. Could you have another banking collapse, and another bailout from the tax payer?

Just as well the Central bank have been strict about what banks can lend, if some on here or in opposition had their ways, it could be just like 2008 all over again - people way in over their heads with debt.

I look forward to hearing SF's alternative budget going forward to get out of this mess - they are all for throwing money at people - but very rarely do they show how they will pay for me. I suspect if there was an election called in the morning, SF would strategically decide their runners, so that they would not be the sole/largest party in power, as they will under no circumstances want to deal with having to pay for all this in the years to come.

05-04-2021 2:32pm

Ace2007 wrote: »

Just as well the Central bank have been strict about what banks can lend, if some on here or in opposition had their ways, it could be just like 2008 all over again - people way in over their heads with debt.

That decision might end up saving the country. I'm not sure where you'll end up if you end up with another banking collapse.

Ace2007 wrote: »

I look forward to hearing SF's alternative budget going forward to get out of this mess - they are all for throwing money at people - but very rarely do they show how they will pay for me. I suspect if there was an election called in the morning, SF would strategically decide their runners, so that they would not be the sole/largest party in power, as they will under no circumstances want to deal with having to pay for all this in the years to come.

I deal with them, and all of the major political parties, as part of my job. I'd stay if they did went into government. It'd be comedy gold, like Trump of meth.

The Great Covid Divide

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