What madness is it that proposes increasing VAT to 23%?

M

MrFunkyBoogaloo

Why increase VAT at all?

Would it not be largely more beneficial, if you're going to take more tax from people's income, to reduce the VAT rate, thereby allowing increased/maintained spending in the local economy.

Is the government actually trying to kill the economy completely? [rhetorical]
 


M

MrFunkyBoogaloo

VAT across the border is at 17.5% - Will people choose to spend millions there instead - resulting in job losses and decreased tax takes in the Republic?
 

LeDroit

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We need more spending to reinvigorate the economy. So let's increase the tax on spending. Jesus, they just won't learn. It's like they refuse.
 

patslatt

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Deflation tax

Why increase VAT at all?

Would it not be largely more beneficial, if you're going to take more tax from people's income, to reduce the VAT rate, thereby allowing increased/maintained spending in the local economy.

Is the government actually trying to kill the economy completely? [rhetorical]
What set off the destructive Japanese deflation was a 1% increase in the sales tax in the early 1990s. Public sector Taxers never learn restraint,viewing the average employee as sheep to be sheared.
 

Pauli

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Low taxes in Ireland has always been a myth so this shouldn't reall surprise anyone. "The lowest corporation tax in Europe" is also a piece of Goebbelsesque propaganda. It never was but the lie was repeated often enough for a lot of people to believe it.
 

Odyessus

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realist

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The EU vision/plan for 2020 estimates there will be 15 million+ unemployed in Europe by 2020. "They" have decided that taxation should therefore veer away from employment related taxes such as income tax and concentrate on unavoidable taxes such as VAT, property taxes etc.

What this basically means is that the 4 year plan for any EU state you look at will concentrate on taxes payable whether we have work or not. This means we will pay:

Property tax
Water tax
Increased VAT on sales and services
Increased motor related taxes
Carbon tax
Travel tax

and anything else that can be taxed whether one is in employment or not.

Quite clever when you think about it.
 

poltourist

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Mar 1, 2004
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Cut Prices

Decrease VAT from 22% to 10% so reducing total prices by 10% (if my calculations are correct). Then increase income taxes across the board so as to increase government revenues.

This would be really beneficial for Irish tourism (surely one of our "natural" industries). Picture the advertising: 100% of the Craic for 10% less - Visit now!
 

Jack Pott

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The minister is playing a dangerous game presuming the euro will fall against sterling and with vat increases also rising in the UK as to make cross border shopping unattractive.
But this VAT increase along with significant wage cuts and tax increases will significantly reduce consumer spending there appears to be no logic to it all. IS there anyone on this forum that understands the rationale or is it simply a case of us being so broke he feels we have no other option?
 

greengoose2

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The minister is playing a dangerous game presuming the euro will fall against sterling and with vat increases also rising in the UK as to make cross border shopping unattractive.
But this VAT increase along with significant wage cuts and tax increases will significantly reduce consumer spending there appears to be no logic to it all. IS there anyone on this forum that understands the rationale or is it simply a case of us being so broke he feels we have no other option?
Oh, I'm sure there are a few FF hacks who believe that. They will be along later to try to explain.
 

RahenyFG

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The VAT is too high here. The North's VAT is going up anyway in 2011 so it won't be a big difference. What is needed is low VAT days to encourage people to spend big on such days. Having a low VAT day close to christmas would encourage shoppers and certainly make plenty of money for the economy.
 

Tea Party Patriot

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Why increase VAT at all?

Would it not be largely more beneficial, if you're going to take more tax from people's income, to reduce the VAT rate, thereby allowing increased/maintained spending in the local economy.

Is the government actually trying to kill the economy completely? [rhetorical]
To answere your rhetorical question, yes they are trying to kill the economy. Increased VAT means increased prices for goods and services, with people having less money to spend this will equate to even tighter spending decisions.
 

athlonedub

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The tax theory (In particular an OECD paper from 2008 - will post link later) deals with the impact of tax increases on growth and ranks the taxes by reference to the impact they have. In the hierarchy, raising property taxes has the least impact on growth, followed by consumption taxes (VAT), income taxes and finally corporation tax. (Hence the reason in part why all Dail parties passed a motion this week supporting the 12.5% growth rate.

So in terms of taking money out of people's pockets versus making items more expensive, the theory plumps for the latter having a less negative impact on growth.

There was actually an argument for doing this on 1/1/2011 since the rate in NI and GB will be going up to 20% on that date. Hence - even with an increase - the VAT rate would actually be narrowing even if we added 1%.

I don't buy this issue anyway about VAT being the sole reason why people go north. The issue is more more related to changes in exchange rates imho followed by the margins which seem to be lower up north.

So the tax theory would certainly point to a change in VAT before taking more tax off people, but having a market in another currency just up the road does have an impact.
 

oggy

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We are doing well with a rate of 23% I remember it went to 35% and VAT at point of entry on imports was introduced back in the 1980's. FFS will people start getting real, the name of the game is hard hitting deflation. Its laughable reading message boards and all the experts totally unaware of whats going on and an economics illiterate like me is ahead of them. We are also doing well with the unemployment rate at less than 14% considering the inflation binge the country went on. If internet sites had been available in the 80's to spread the same misery they are doing now the country would have been in a state of revolution
 

clonycavanman

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...If internet sites had been available in the 80's to spread the same misery they are doing now the country would have been in a state of revolution
The counter-argument has been made too; the internet is so cathartic people don't go to the streets to practise politics.

Why is VAT increasing? When the state has to pay it's debts, the welfare recipients are increasing, and 'the rich' are leaving.
Would the answer be; it is an easily collected tax, that is almost unavoidable, and 'we need the money'.
 

PatsyOriel

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May 16, 2009
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The Minister is obviously unwell and not fully recovered from his treatment hence he is making the vat increase mistake again??

I assume that his Dept Officials are ''well'' and should know better not to make this error again.
Sure whats the loss of 700million when they lost us billions??
 


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