Croke Park Agreement prevents €3 billion in budget cuts without tax increases?

patslatt

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The IMF would be here on the morning following a Labour victory

Well, if Labour are the largest party not only will the Croke Park cop-out not save €3 Billion, but, there is a chance it will be reversed.

Mark my words! Gilmore can't commit to anything, and if Labour receive a huge vote he will attribute it solely to not rocking the electoral boat with cuts. Consequently, having just delivered many new Labour seats he won't want to risk losing them!!

Added to which Jack O'Connor will probably have a desk in the corner of the Taoiseachs office!

C
The IMF would be here on the morning following a Labour victory because the bond market would be demanding Greek style interest rates.
 


Fed Up

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Government borrowing is tolerable. Say interest rates average 4% on both short and long term debt,with debt at 100% of GDP or 125% of GNP,then interest payments are 4% of GDP and 5% of GNP.
Interest rates are 6.5%+ and are only going to get worse.

I wouldn't mind if we were borrowing loads to invest in things like infrastructure like you know, actual broadband capable of delivering more than 1MB and actual buildings for schools instead of pre-fabs that we rent for 5 times the cost of an actual building (who owns these renta-cabin companies do you think?).

All we're doing is mortgaging the next two generations so we can throw loads of good money after bad, might as well put in a big stack and set it alight, at least it'd generate heat.
 

politicaldonations

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Pat or twat why dont you read Garret F in today's Irish Times? We are an undertaxed nation by about 4 billion. While I dont think the Government will be able to honour the agreement-only a mathematical moron like yourself would think we can avoid further tax increases sometime. Even after the income levy we still pay below EU avg-you know what an average is Pat??
. Im sure the usual rent a gang are here agreeing with you but you wont be able to get any balanced individual to agree with your nonsense. Oh by the way Pat-hope you enjoy the drop in income!!
Yeah say we get 4 billion by increasing taxes over next few years. Where is the other ten billion of structural adjustment gonna come from?
And when we reach average levels of EU taxation will be have all the public services the average European has? Will we f^%k. Few people mind paying average levels of taxation if we were getting same level and quality of services as Euro cousins. The disingenuious feckers here only want higher taxes to keep them pampered earning amongst the highest public sector salaries and pensions in the world.
 

patslatt

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The gamble of defaulting on bank subordinate bonds

I would prefer to spend my tax money on social welfare that goes back into local shops, than London bondholders whose income isn't keeping Margie and Ann at their checkout jobs. When we have gone past the bondholder insanity, then it's time to move onto discussions about revenue-raising mechanisms and their cyclical robustness.

When you have a gambler in the house, the first thing to do is get them to stop gambling. THEN you start thinking about helping them find work.
It is a gamble to default on subordinate bank bonds,because the bondholders probably include many of the financial institutions financing our colossal deficits.
 

making waves

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Another bash the public sector thread Pat - you really need to get a life.

Yeah say we get 4 billion by increasing taxes over next few years. Where is the other ten billion of structural adjustment gonna come from?
And when we reach average levels of EU taxation will be have all the public services the average European has? Will we f^%k. Few people mind paying average levels of taxation if we were getting same level and quality of services as Euro cousins. The disingenuious feckers here only want higher taxes to keep them pampered earning amongst the highest public sector salaries and pensions in the world.
time to make the rich b*stards who lined their pockets for two decades and then crashed the economy pay up then - wouldn't you say ?
 

wastedlife

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maybe a 12 to 18 month period of IMF reform would be the best thing all round.

it would appear that irish politicans do not have the stomach to make the necessary changes to the structure of the irish system.

leaving aside the why the country is broke for a minute the issue is how to fix it.

i suggest that the cause of the disease is irrelevant when its killing you..all that matters is the cure........
 

patslatt

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Honest Garret,the most unsuccesful Taoiseach bar Bertie

Pat or twat why dont you read Garret F in today's Irish Times? We are an undertaxed nation by about 4 billion. While I dont think the Government will be able to honour the agreement-only a mathematical moron like yourself would think we can avoid further tax increases sometime. Even after the income levy we still pay below EU avg-you know what an average is Pat??
. Im sure the usual rent a gang are here agreeing with you but you wont be able to get any balanced individual to agree with your nonsense. Oh by the way Pat-hope you enjoy the drop in income!!
I wouldn't value advice from Garret despite his quality of honesty,rare among politicians. That's because he presided over a disastrous coalition with Labour in which his failure to prevent Labour from blocking all attempts at austerity prolonged the 1980s depression and mass emigration. Now Garret claims taxes are relatively low,failing to recognise that inferior government services in health care,public transport,social housing and subsidised day care aren't worth paying for. Higher taxes should only be considered if the public sector is radically reformed and its recruitment system opened up to business talents in order to permit efficient delivery of services.
 

JCR

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Another bash the public sector thread Pat - you really need to get a life.


time to make the rich b*stards who lined their pockets for two decades and then crashed the economy pay up then - wouldn't you say ?
Who are the rich b*stards you want revenge on? Just wondering. Any idea on how to borrow one third of total expenditure at interest rates five times the rate of growth every year? Or will we just get the rich b*stards to fork out yeah?
 

patslatt

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Interest rates

Interest rates are 6.5%+ and are only going to get worse.

I wouldn't mind if we were borrowing loads to invest in things like infrastructure like you know, actual broadband capable of delivering more than 1MB and actual buildings for schools instead of pre-fabs that we rent for 5 times the cost of an actual building (who owns these renta-cabin companies do you think?).

All we're doing is mortgaging the next two generations so we can throw loads of good money after bad, might as well put in a big stack and set it alight, at least it'd generate heat.
Interest rates are above 6% on 10 year bonds but are a lot lower on short term bonds.
 

Kevin Doyle

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Who are the rich b*stards you want revenge on? Just wondering. Any idea on how to borrow one third of total expenditure at interest rates five times the rate of growth every year? Or will we just get the rich b*stards to fork out yeah?
The 80,000 plus workers in the State who earned between them over 16billion and only paid an efective tax rate of 27%
 

making waves

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Who are the rich b*stards you want revenge on? Just wondering. Any idea on how to borrow one third of total expenditure at interest rates five times the rate of growth every year? Or will we just get the rich b*stards to fork out yeah?
The top 1% of the population (i.e. the 40,000 millionaires and billionaires) currently have wealth and assets worth over €300billion. A 1% wealth tax on all wealth over €1million would generate the €3billion Lenihan wants to cut. A wealth tax of 5% would cover the entire deficit.
 

JCR

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The 80,000 plus workers in the State who earned between them over 16billion and only paid an efective tax rate of 27%
Why not take the entire 16 billion off them altogether and we would only have to borrow 4 billion this year and go back to borrowing 20 billion? Why not eh? Those rich b*stards.
 

Kevin Doyle

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Why not take the entire 16 billion off them altogether and we would only have to borrow 4 billion this year and go back to borrowing 20 billion? Why not eh? Those rich b*stards.
No just the 7 billion lost on earnings through incentives that allows them escape the marginal rate of tax that many earning over 36K are forced to pay.
 

JCR

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The top 1% of the population (i.e. the 40,000 millionaires and billionaires) currently have wealth and assets worth over €300billion. A 1% wealth tax on all wealth over €1million would generate the €3billion Lenihan wants to cut. A wealth tax of 5% would cover the entire deficit.
The 300 billion figure is the entire countrys wealth not the 1%. I think you have to work more on your figures in general before you come up with something to get those 1% of rich b*stards.
 

JCR

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No just the 7 billion lost on earnings through incentives that allows them escape the marginal rate of tax that many earning over 36K are forced to pay.
So how does 7billion help with a year on year deficit of 20 billion?
 

Kevin Doyle

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The 300 billion figure is the entire countrys wealth not the 1%. I think you have to work more on your figures in general before you come up with something to get those 1% of rich b*stards.
300 billion doesn't even cover deposits never mind the entire countries wealth.

People in glasshouses etc etc.
 

patslatt

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Tax incentives backfire

The 80,000 plus workers in the State who earned between them over 16billion and only paid an efective tax rate of 27%
That 27% if true probably reflects capital gains and tax incentives. Many tax incentives on property backfired by attracting investment into property that has dropped in value or encouraging too much debt,even while promoting social goals such as regeneration of city centres and social housing. Do you want to downgrade those social goals?

As for capital gains tax,at 25% in Ireland it is higher than Britain's 20% and the US's 18%,so it is internationally uncompetitive. Capital gains tax applies to phony gains on inflation,so if you sell property that has doubled in line with price inflation from say €100,000 to 200,000, you still have to pay €25,000 in tax even though you have not made a profit after adjusting for inflation.
 

Kevin Doyle

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So how does 7billion help with a year on year deficit of 20 billion?
That 7 billion is annual. Thats just recouping lost revenue of taxes owed at current marginal rates, slashing the deficit by a very unhelpful third, never mind actually increasing marginal rates in line with EU norms for everyone. Do that then start cutting.
 

Kevin Doyle

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That 27% if true probably reflects capital gains and tax incentives..
In other words, you havent got a clue.

Many tax incentives on property backfired by attracting investment into property that has dropped in value or encouraging too much debt,even while promoting social goals such as regeneration of city centres and social housing. Do you want to downgrade those social goals?.
According to Lenny, those incentives are gone.

Social Housing? Current private investment is at a stand still.


As for capital gains tax,at 25% in Ireland it is higher than Britain's 20% and the US's 18%,so it is internationally uncompetitive. Capital gains tax applies to phony gains on inflation,so if you sell property that has doubled in line with price inflation from say €100,000 to 200,000, you still have to pay €25,000 in tax even though you have not made a profit after adjusting for inflation.
This is meaningless.
 

JCR

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That 7 billion is annual. Thats just recouping lost revenue of taxes owed at current marginal rates, slashing the deficit by a very unhelpful third, never mind actually increasing marginal rates in line with EU norms for everyone. Do that then start cutting.
So there 16 billion earned every year by 80,000? How long even if that was true do you think these people would have their wealth in places the government could tax it at nearly 50%? Not long is the answer. Of course it would be nice if very rich people handed over all their money so that we could have silly things like the Croke Park agreement but it just won't happen so plans that are more realistic are required, not wishful thinking. And anyway veen if you could do what you propose a 13 billion deficit at current interest rates and no growth is just another form of disaster.

You can;t try and fool the public sector and everyone else that there is some vast wealth that can be tapped before they have to accept the fact that the country cannot borrow 13 billion a year no more than it can borrow 20 billion. Its not going to happen.
 


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