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Posts tagged ‘Taxation’

Ronan Lyons on Michael O’Leary’s suggestions to quit Ireland

Ronan Lyons has posted a new item, ‘Should we let Michael O’Leary run our income
tax system?’

This post examines Michael O’Leary’s suggestions in relation to Ireland’s
income tax system,
in particular making it simpler and ensuring everyone
contributes but not too much! It uses recently published Revenue Commissioners
figures for income in 2008 to estimate who would like the proposal and who would
hate it, Government included. It concludes with a few tweaks to the proposal,
including in relation to income earned through social welfare.

full article at source:http://www.ronanlyons.com/2011/08/23/should-we-let-michael-oleary-run-our-income-tax-system/

This is a declaration of unilateral financial dictatorship

This is fudge and hopefully the markets will give this comedy duo something to think about .In this small clip I also detect some bad news for Ireland our corporation tax is
heading into a pan “European tax” that will be set by the big boys it would seem,
I also see a new constitutional referendum for us in Ireland as  this Duo now
wants to remove any remaining notion we might have of sovereignty, wiped out of our constitution with the insistence of writing in this imposed commitment to “Balanced Finances” into our constitution. This is a declaration of unilateral financial dictatorship by these two countries over the rest of the so called European Union.

Income tax hikes put back on the table.

June 10 2011

HARD-PRESSED workers were hit on the double yesterday when income tax hikes were put back on the table — just as a new mortgage interest rate rise was signalled.

Finance Minister Michael Noonan warned he could not rule out any type of tax increase because of the “fraught” state of the public finances.

The hikes would be on top of a new property tax on each household due to be imposed in January.

The surprise development came as homeowners face the prospect of another mortgage interest rate hike in July — just three months after an April rate rise that added €45 to average monthly repayments.

The Coalition is obliged to come up with €1.5bn in tax hikes in Budget 2012 to be delivered in December.

The Government had promised there would be no increase in income tax rates or changes to bands or credits.

But Mr Noonan did not rule out any tax changes when he was pressed on the Government’s economic plans. He did not specifically mention income tax but he said he was “not going to rule out” any tax hike.

Under the EU-IMF bailout plan, a package of tax and spending cuts worth €3.6bn are to be made next year.

The current programme says €1.5bn will come from taxes with another €2.1bn from spending cuts. The Government may end up increasing the expenditure reductions once the spending review of all departments is completed.

But it is not clear if the proposed interim property tax, called the household service charge, will count as part of the general tax take.

The income will most likely go directly to the local authorities to pay for council services. As a result, the Government grant to councils would be reduced, thereby counting as a spending cut.

The Department of Finance said Mr Noonan was not misinterpreted when he said he could not rule out income tax hikes.

“The Government’s taxation decisions are made on Budget Day,” a spokesman said.

Mr Noonan said he was talking about the general issue of how to meet the fiscal targets and pay to run the country.

“The national finances are in a fraught situation. There’s a fiscal correction of €6bn under way in 2011 and so far we’re on target. We are slightly under profile on tax collection and we’re also under profile on expenditure. So as we go into June, facing the end of the first half year, we’re on target to achieve the fiscal correction of €6bn.

Correction

“Next year the commitment under the programme is a correction of €3.6bn, so over the two years there’s a correction of €10bn. In those circumstances I am not going to rule out any tax initiative or any tax increase or any tax reduction. I say this at a level of principle. I have nothing in mind,” he said.

During the 2011 general election campaign, Mr Noonan said his party did not want to increase taxes and would concentrate on spending cuts instead. “If we tax we lose more jobs. So we want to keep tax levels the same as they are and eliminate waste,” he said.

Fianna Fail public spending spokesman Michael McGrath said another central plank of Fine Gael‘s election promises was “abandoned” as Mr Noonan refused to rule out income tax increases.

Also yesterday, European Central Bank president Jean-Claude Trichet stressed the need for “strong vigilance” to curb inflation.

Mr Trichet stressed that no decision had been taken about action in July.

Virtually all market-watchers are now pencilling in a 0.25pc hike in July, which would see Ireland‘s 600,000 variable and tracker mortgage holders pay €15 extra a month on every €100,000 they owe.

– Fionnan Sheahan, Charlie Weston, and Laura Noonan in Frankfurt

Irish Independent

source:http://www.independent.ie/national-news/double-blow-as-income-tax-and-rate-hikes-loom-2671050.html

Comment:

Another promise broken!There you have it the ultimate betrayal from Fine Gael. Finance Minster Michael Noonan has given the clearest notice (as a politician can do) to the bewildered citizens of this once proud independent nation that we can expect another smack of the austerity hammer that will come thundering down on our heads .Gone are the pre election promises and Mr Austerity the sequel is back with a vengeance! The people of Ireland voted for change, we got none! The new government have now dropped all pretence of change and the old Fianna Fail policies have been embraced in full, indeed expanded with a new vigour and determination shown on the part of the new band of collaborators is plane for all to see. No wonder the IMF are pleased and Michael and his band of sell-outs can expect to reap rewards at some future date in Brussels .When will we see the people rise up and take back our country from these gombeen politicians who are so eager to grovel at the foot of the international  moneymen now running our country .

U2 and “Tax Havens”

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Dublin, Ireland. a protest outside the Department of Finance, nothing unusual there, only this time it was to do with Ireland’s most successful band. This protest saw members of the Debt and Development Coalition Ireland (DDCI) gathering Bono may campaign for a better deal for the world’s poor, but his band are taking advantage of the same tax avoidance schemes that rob impoverished countries of billions. outside the Merrion Street offices to voice their concern over U2’s tax avoidance. The coalition contains charitable organisations such as Trocaire and Oxfam (the world’s largest charity organisation) and they had clearly swallowed enough of Bono’s double standards. Nessa Ni Chasaide of Debt and Development Coalition Ireland said, “Bono may campaign for a better deal for the world’s poor, but his band are taking advantage of the same tax avoidance schemes that rob impoverished countries of billions.”

For more follow link to source: http://www.makebonopaytax.com/

 

Tax avoidance and tax havens like the IFSC are helping individuals and companies to avoid taxation through loopholes in the law or even employ illegal tax evasion methods :

Governments need tax revenues for investments in public goods and services like infrastructure, education, health care and a social safety net. These investments are of great important for national welfare, a good enabling environment for the private sector and for economic development in general. It is important that all individuals and firms, who are benefiting from these public services, contribute to this by paying a fair share in taxes. 

Some companies nonetheless use aggressive methods to avoid taxation through loopholes in the law or even employ illegal tax evasion. The scope of worldwide tax evasion is enormous. In the book “Capitalism’s Achilles Heel”, Richard Baker, one of the most renowned American experts on the field of tax evasion and money laundering, calculates that every year US$ 200 billion of corporate revenues depart from developing countries without proper taxes being paid.
 
It has been estimated that more than half of all world trade is going through tax havens to avoid taxation. Tax havens play an important role in the worldwide problem of tax avoidance and evasion. They undermine development in other countries, including developing countries, in four ways:

  • Secret bank accounts and offshore trusts in tax havens provide wealthy elites and companies with the means to escape their tax obligations. The big international banks and accountancy firms lend a hand by providing trust and tax planning services in tax havens;
  • Multinationals’ ability to substantially lower their tax burden by routing capital flows through mailbox companies in tax havens provides them with unfair competitive advantages vis-à-vis their – often smaller – competitors in developing countries;
  • Banking secrecy and offshore trusts offered by financial institutions in tax havens make it possible to launder the proceeds of political corruption, illicit arms deals, and other crimes;
  • Tax havens have contributed to the rising incidence of financial crisis that can destroy livelihoods in poor countries. Tax havens have contributed to the rising incidence of financial crisis that can destroy livelihoods in poor countries.

Tax avoidance is a worldwide problem that needs to be addressed. Both governments and multinationals should take action to counter this problem. There is also an important task for civil society organisations to stimulate public discussion around tax avoidance and tax havens.

Source   http://www.taxjustice.nl/?nid=63000

New Budget 2011 on the way ???

 

Sent in to me this morning

source:http://www.irishleftreview.org/2011/01/26/emergency-budget/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+irishleftreview%2Ffeed+%28Irish+Left+Review%29

Whatever about the disputes over facilitating the passage of the Finance Bill, what people want to know is what parties are going to do about it when they get into office. And this is where progressives can stop feuding with each other and get the debate back to where it belongs – showing how Budget 2011 will do such harm to economic recovery and fiscal stability. And, more importantly, what can be done to remove that harm and show how a progressive platform will bring immediate benefit to the economy and living standards.

Here’s one way of doing that:  a precondition for entering government should be the enactment of an emergency budget within 60 days based on three concrete pledges.

  • Repeal the Universal Social Charge
  • Immediately release funds for public investment
  • Reverse the cuts in social welfare income and the minimum wage

Let’s go through these three pledges.

Pledge 1: Repeal the Universal Social Charge

The Universal Social Charge (USC) should be repealed and the previous tax regime – the Income Levy and Health Contribution Levy – should be reinstated. This has no budgetary implications as it would be, per Government estimates, fiscally neutral. But the benefit to households and the economy would be considerable:

 

As seen, low-income earners could benefit by up to €10 per week while higher income groups would lose out. This would help economic growth – low-income earners spend their additional income; high-income earners tend to save.

This platform could be developed. For instance, the Health Contribution Levy, while maintaining its former thresholds, could be integrated into the Income Levy which has a more progressive base (e.g. rents and dividends are exempt from the Health Levy). Therefore, abolishing USC could actually be a revenue raising measure.

In addition, further progressive tax measures could be introduced alongside repealing the USC. The Community Platform, TASC, ICTU and other civil society organisations – all have put forward practical and easily implemented proposals in the areas of tax expenditures and extension of levies to capital income. The total impact of this would be to increase tax revenue further while providing a small stimulus to low-average income households in the form of removing deflationary tax increases.

Pledge 2: Immediately Release Funds for Public Investment

The second pledge would be to immediately release €2 billion for investment- to come from a combination of the Pension Fund and Exchequer cash balances (we still have nearly €30 billion in liquid assets). This would be done in tandem with re-opening negotiations with the IMF/EU to ring-fence our cash and assets for investment/fiscal consolidation purposes.

To ensure it gets on-stream as quickly as possible, this investment would be largely pumped into ‘shovel-ready’ projects at central and local government (a good start would be refurbish every school to best standard in time for autumn classes).

However, we can go beyond ‘bricks and mortars’ – as UNITE has shown: modern information systems, preventative health initiatives, one-on-one tutoring to raise literacy and numeracy skills (both in schools and in the community), loan guarantee schemes for SMEs, etc.

The economy would not get a full year benefit from this increased investment. But let’s assume 50 percent of the total multiplier gets into the economy by year’s end (it will continue to benefit the economy for an additional 5 and a half years):

  • 10,000 jobs created directly with an additional 3,000 to 4,000 spin-off jobs
  • Reduction in unemployment and related costs
  • An additional €350 million in tax revenue
  • A GDP boost of 0.75 percent

A big impetus – which would take some time to get off the ground – would be an announcement that a public enterprise company will be established to build a Next Generation Broadband network to reach every household and business by 2015. While publicly-directed and owned, private investment can be leveraged in. This would be a clear signal of intent: that we are going to invest our way to economic recovery and fiscal stability.

Pledge 3: Reverse the Cuts in Social Welfare Income and the Minimum Wage

A pledge to reverse the cuts in social welfare income and the minimum wage should also be non-negotiable. This measure would boost demand and GDP, increase business turnover, protect retail employment and raise tax revenue (e.g. VAT, etc.). Therefore, it would end up costing the Exchequer far less than the headline cost of repealing the social welfare cuts (€397 million) while reversing the minimum wage will actually boost Exchequer revenue.

There are other measures – minimal in cost but capable of lifting inequitable burdens on those on low incomes while increasing demand:

  • Repealing the GMS co-payments – not likely to cost much after administrative savings are taken into account
  • Protect all minimum wages – namely, no cut in pay rates and working conditions under Joint Labour Committees
  • Increase Family Income Supplement by the amount as in Budget 2010 – €6 per child per week: this will enhance living standards of thousands of low and average income families with children.

Any increase on the public expenditure side would be more than compensated by tax measure introduced on high income groups (under Pledge 1), tax revenue from investment activity (under Pledge 2), and the benefit of higher demand that increasing people’s living standards would produce (under Pledge 3). Its win-win-win.

* * *

This simple three-point programme does not address all the economic and social issues which progressive parties will have to address in their election manifestos, never mind when they are in government.

However, it would give a short, sharp signal to the electorate about progressive values and priorities. It will show people how people will be better off after 60 days of a progressive government. It will give everyone a clear picture of the medium-term direction of the new government.

And it will give something for progressives to agree over, instead of attacking each other. Such feuding only brings the prospect that more of the same failed economic thinking will dominate in the next government.

And who wants that?

 Comment:

I  do not necessarily share the opinions of the various articles posted here I am merely showing alternative opinions

Budget 2011

By Charlie Weston

Wednesday December 08 2010

FAMILIES with children will be almost €3,000 worse off from the savage Budget changes announced yesterday.

The changes in income tax alone will suck almost €1,250 out of the pockets of a household on the average family income of €55,000.

On top of this, the family will be down heavily from cuts in child benefit. If the family has three children who still get child benefit, the hit will come to €480 a year from the reductions in this benefit.

Those families that are providing for their future by investing in a pension will end up having to shell out an additional €300, assuming they want to keep putting 6pc of their salary into a pension.

This is because those paying into a pension will now have to pay PRSI (pay related social insurance) and the new universal social charge (a combination of the old income and health levies) on the money going into their pension.

Households will also be hit by higher petrol and diesel prices, in a move that will cost the average driver around €72 a year.

The tax on savings is to rise by 2pc to 27pc.

If the family has another child who is in college, the cost will rise by another €500 in college fees to €2,000 a year for the first child.

Families that have a trade union member lose a tax credit worth €70 a year. Those families who use public transport to get their children to school will see a rise of €50 a year in this cost.

Although there were no changes to the two tax rates of 20pc and 41pc, there are other extensive changes to income tax.

The tax changes see the tax credits being cut, which effectively means people will pay more tax. For every €1 cut in the tax credits an extra €1 in tax has to be paid.

At the moment, a PAYE (pay as you earn) employee gets €1,830 as an employee tax credit. This has gone down by 10pc to €1,650. This effectively means a tax rise of €180.

There is the same reduction in the personal tax credit of €1,830.

The changes in the tax credits alone will cost all PAYE taxpayers €360.

On top of this there has been a change in the tax bands — this is the amount of money you can earn before you move from paying tax at the 20pc tax rate to the 41pc tax rate.

A single earner will now start paying tax at 41pc when they earn more than €32,800.

Up to now a single or widowed person could earn up to €36,400 before paying tax at the higher rate.

For a married couple with one income, the higher tax rate will kick in on income above €41,800. It is €45,400 up to the end of this year.

 

Couples

For married couples with two incomes, the level of income where the top tax rate applies falls from €72,800 to €65,600.

The combined changes in the tax credits and the tax bands will mean an estimated additional 300,000 people will be brought into the tax net.

The charge for a private bed in a public hospital will go up by 21pc, a measure which is likely to result in an increase in the cost of private health insurance.

Already this year 34,000 people have cancelled their private health insurance cover.

A rise of 21pc in the cost of a private bed in a public hospital will push up the cost of private healthcare premiums by between 5pc and 10pc. This is on top of any planned private healthcare rise next year. A family with two children will likely see their private healthcare rise by around €240 a year due to the higher costs to the likes of VHI for paying for beds in public hospitals.

Retired people with a private pension have been hit. At the moment, if a they earn less than €20,000 for a single person and €40,000 for a married couple, they pay no tax on their pension. But from next year tax along with the universal social contribution will be paid on income over €18,000 for the single pensioner and €36,000 for the couple.

“After many years of increases in the tax bands and credits, the momentum is now firmly in the opposite direction,” KPMG tax partner Eoghan Quigley told the Irish Independent.

“Taxpayers are now faced with further income tax rises in the following Budgets.”

– Charlie Weston

Irish Independent

Comment

“FAMILIES with children will be almost €3,000 worse off from the savage Budget changes announced yesterday.”

This is not quite the end figure as we still have to see the stealth taxes to be announced in the finance Bill but for starters we are going to see a Home tax and  water charges which will bring us up to a total of 4,000 per household at least!

Ronan lyons Budget 2011

By

Ronan lyons

Almost a year ago, the Minister for Finance stated that the Budget he was introducing before Dail Eireann, with its €4bn in savings, was going to be the toughest on the road to Ireland’s recovery. It was, even then, a bold statement and one I doubted at the time.

In recent weeks, interest – at home and on the international bond markets – in Budget 2011 has increased. (For example, on this site, four phrases to do with Ireland’s upcoming Budget have driven 20% of all traffic in the last month.) And it is clear that if last year’s Budget does prove to be the toughest, it will be by a hair’s breadth, as savings of a further €4bn or more are sought in December.

How will this €4bn in savings be achieved? Should the balance be in tax increases or in spending cuts? The TASC proposals, for example, suggest that Ireland can – without deflationary impact, to the scepticism of some commenters on irisheconomy.ie – raise an extra €2.7bn in taxes next year, while only cutting spending by €300m.

In my next post, I’ll be focusing on expenditure. But that is only one half of the equation and today the focus is on taxation and the government’s receipts. I’ll look at measures that can be implemented for the coming year but also with an eye on the Government’s commitment to reduce the deficit to 3% of GDP by 2014 (I actually work off 2015, as I just don’t think 2014 is feasible).

This year, Ireland’s government will take in about €50bn in receipts. The bulk of this, about €44bn, will be in the form of direct or indirect taxes, or “social solidarity” such as health levies or PRSI. By 2015, if the deficit really is to be reduced, revenues will have to rise to between €55bn and €57bn, depending on how growth and spending evolve. This means that we need to increase our total tax take by about 10%-15% in five years. Do-able? I think so, if done right. Here are two ideas that should drive the government’s taxation strategy.

1. Make income tax simple and normal

I have made this point on numerous occasions: Ireland’s income tax system is abnormal. It has evolved over the 2000s to a system based on the wealthy paying a disproportionate share. (Try selling that idea down the pub!) In the last year for which public information is available, 2006, Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total.

full article here at source

http://www.ronanlyons.com/2010/10/19/how-can-ireland-tax-and-grow-thoughts-for-budget-2011/

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