If punitive USC tax rates are cut in the coming October budget, could income tax revenues rise after a time?

patslatt

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If punitive USC tax rates are cut in the coming October budget, could income tax revenues rise after a time?

In a discussion on Newstalk this afternoon, politicians didn't mention the possibility that cutting punitive USC tax rates could lead to increases in tax revenues over time. Have Finance and Revenue done any serious statistical studies of the elasticity of income tax rates-the percentage tax revenues would change over time in response to a percentage cut in tax rates?

A big cut in USC could encourage many housewives to join the workforce, many emigrants to return home and small businesses to expand. For high income Irish emigrants abroad, Irish income tax rates must look punitive. For small businesses thinking about expansion in Dublin, there is a huge risk in taking on very high commercial rates and any income earned will be taxed at top rates on dividends paid out.

There is a case to be made for slashing USC on economic efficiency grounds alone, not because a cut would be popular.
 


EoinMag

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In a discussion on Newstalk this afternoon, politicians didn't mention the possibility that cutting punitive USC tax rates could lead to increases in tax revenues over time. Have Finance and Revenue done any serious statistical studies of the elasticity of income tax rates-the percentage tax revenues would change over time in response to a percentage cut in tax rates?

A big cut in USC could encourage many housewives to join the workforce, many emigrants to return home and small businesses to expand. For high income Irish emigrants abroad, Irish income tax rates must look punitive. For small businesses thinking about expansion in Dublin, there is a huge risk in taking on very high commercial rates and any income earned will be taxed at top rates on dividends paid out.

There is a case to be made for slashing USC on economic efficiency grounds alone, not because a cut would be popular.

Sounds like GOP style bull************************ to me.
 

former wesleyan

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The USC should be converted to a tax to create a health service.
 

Erudite Caveman

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The USC should be converted to a tax to create a health service.
Ballooning health expenditure coupled with the formation of the HSE didn't work. The primary problem with the health service is institutional inertia, I don't think the USC can address this.
 

patslatt

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The USC should be converted to a tax to create a health service.
Ireland spends about 12.5% of the economy on health care, compared to a parsimonious 9% in the UK. We need reform of the workers co-op (including doctors) that runs the health service, not throwing more money at it. Above all, a pay freeze is needed to enable the hiring of more workers for existing pay budgets in order to end the understaffing that makes A&E workplaces highly stressful. There would be less job turnover in properly staffed A&Es.
 

Erudite Caveman

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Are you paying substantial USC? Probably not, so let the other guy pay?
The good thing about the USC is that all the other guys pay. Prior to that we had half of all workers not paying any income tax. It is a pretty decent attempt at reconciling progressive taxation yet making all workers pay.
 

Spanner Island

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Ballooning health expenditure coupled with the formation of the HSE didn't work. The primary problem with the health service is institutional inertia, I don't think the USC can address this.
Money is not the answer for the Irish health system.

Anyone with a brain who can think must realise that by now.

During the 'boom' money was thrown at it left, right and centre and while some aspects improved greatly (cancer care)... for the most part there was bugger all bang for the extra bucks...

I remember McCreevy on the radio in the early 2000's giving out sh!t about how little was being delivered for the huge increases in funding that were going on at that time.

The fact is health services will hoover up as much money as is thrown at them... and the Irish health system is a dysfuncional monolith controlled by vested interests and cronies within it.

I don't even blame Ministers for Health anymore because we've had far too many of those with varying backgrounds (health and other) who have failed miserably to fix it... ergo the blame must be well and truly within the rotten health 'system'...

Having said that Varadkar was more abysmal than most with his apathy.

The fact that nobody was sacked when the HSE was formed and that we ended up with the same number of bodies duplicating all sorts of tasks (particularly in admin) speaks volumes about how feckin' useless 'establishment' Ireland is.
 

Congalltee

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The USC model should be extended to taxes on corporations and then abolish a lot of indirect taxes and substantially reduce VAT. However, our politicians would rule that out with scare tactics of multinationals leaving (which would be a nonsense if the tax is pitched at an appropriate level)
 

hollandia

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Ireland spends about 12.5% of the economy on health care, compared to a parsimonious 9% in the UK. We need reform of the workers co-op (including doctors) that runs the health service, not throwing more money at it. Above all, a pay freeze is needed to enable the hiring of more workers for existing pay budgets in order to end the understaffing that makes A&E workplaces highly stressful. There would be less job turnover in properly staffed A&Es.
Small problem with that is that nurse for example get paid better, for lower hours, with better opportunities for progression and further education, in the UK (amongst other places). Pay freeze is great if you have people prepared to work for what you're offering. According to nursing representatives, we don't.
 

statsman

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Am I alone in finding it extraordinary that this is the only OP addressing the biggest economy-related news story of the day?
 

wexfordman

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Sounds like GOP style bull************************ to me.

yeah, cos arbitary unbalanced unfair tax rates make so much sense and are so fair!

Nothing wrong with taking nearly 70% of someones work and effort and completely diregarding that individuals ability to support themselves because you make an idiotic asusmption that they are well off so you need to take a slice of their perceived cake and give it to others who are more "needy"
 

hollandia

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Flat rate tax for everyone. No exemptions or allowances. Simples.
 

SeanieFitz

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Am I alone in finding it extraordinary that this is the only OP addressing the biggest economy-related news story of the day?
I have been wondering about that for some time, peoples apathy on tax/salary related matters and I am of the opinion that working class people are worn out, shattered from the past 8/9 years of wage reduction/stagnation, levies, tax increases, increased living costs etc. People are exhausted by it all.
The world economy is totally imbalanced in favour of a few and something will happen to rectify that imbalance, that something may or may not be messy.
The on goings in San Francisco/Oaklands is a microcosm of what is happening across the developed world, middle/poorer class being squeezed out however they are starting to fight back. Interesting times ahead
 

Spanner Island

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Flat rate tax for everyone. No exemptions or allowances. Simples.
Nah...

Income and VAT only with no loopholes or any other sort of bullsh!t that allows individuals to avoid them.

Mulitple levels of each with a maximum rate of 50% on income (because imo no government anywhere should ever think it has a right to take more than 50% of anyone's money regardless of how much they make).

There should also be robust, stiff and unavoidable penalties for those found cheating and/or evading.


Multiple levels of VAT based on how necessary the item or service is for living in today's world should also apply.

Luxury items such as Ferraris or designer bags and handbags etc. could have VAT rates of 100% afaic'ed.

People with more money than sense should be ripped off imo.

And then multiple levels between 0% and 100% based on how necessary an item or service is.


ALL other taxes including corporate tax should be scrapped.

Tax should be simple and it should be levied on individuals... because at the end of the day all 'wealth/money' etc. is owned by individuals who buy and sell with it.
 

statsman

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I have been wondering about that for some time, peoples apathy on tax/salary related matters and I am of the opinion that working class people are worn out, shattered from the past 8/9 years of wage reduction/stagnation, levies, tax increases, increased living costs etc. People are exhausted by it all.
The world economy is totally imbalanced in favour of a few and something will happen to rectify that imbalance, that something may or may not be messy.
The on goings in San Francisco/Oaklands is a microcosm of what is happening across the developed world, middle/poorer class being squeezed out however they are starting to fight back. Interesting times ahead
Nevertheless, I'd have expected our SF brethren to be all over this like a candlewick bedspread, given that the bold Pearse dragged it into the light.
 

Paddyc

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Nah...

Income and VAT only with no loopholes or any other sort of bullsh!t that allows individuals to avoid them.

Mulitple levels of each with a maximum rate of 50% on income (because imo no government anywhere should ever think it has a right to take more than 50% of anyone's money regardless of how much they make).

There should also be robust, stiff and unavoidable penalties for those found cheating and/or evading.


Multiple levels of VAT based on how necessary the item or service is for living in today's world should also apply.

Luxury items such as Ferraris or designer bags and handbags etc. could have VAT rates of 100% afaic'ed.

People with more money than sense should be ripped off imo.

And then multiple levels between 0% and 100% based on how necessary an item or service is.


ALL other taxes including corporate tax should be scrapped.

Tax should be simple and it should be levied on individuals... because at the end of the day all 'wealth/money' etc. is owned by individuals who buy and sell with it.
How do you draft a tax code that allows you to set VAT at 100% on a Ferrari but only 20% on a Fiat? They're both cars. Do you do it by price, number of doors? sheer gorgeousness (in which case anyone who buys a Ssangyong gets a VAT refund)?

Similarly with handbags: how do you define "designer"?
 


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