Would you favour tax of nearly two thirds on pay of highest incomes?

patslatt

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The Labour Party would do so Labour plans pay freeze and tax for those on €100,000 - The Irish Times - Thu, Oct 28, 2010

Often when politicians talk about taxing the rich,they are softening up public opinion for increasing taxes on the middle classes. That's because there are not enough high incomes at the top of the income pyramid to generate more than a small proportion of the massive annual taxes of up to half the economy (maybe trending towards 60%+ now in Ireland) taken by voracious welfare states.

So you should clutch your wallet if you are a middle income earner listening to Labour's Eamon Gilmore proposing to tax incomes of over €100,000 at 62% including tax,levies and PRSI.

Finance Minister Brian Lenihan,whose frenzy of tax increases contributed to the depression in consumer spending,thinks this is a tax increase too far,believing that the tax take from Gilmore's proposal would drive people from Ireland. Certainly the foreign executives and managers who work for multinationals would not want to come here to start new businesses and it would be hard to retain those already here. In Microsoft for example,maybe a fifth of the Irish workforce is expats and they would no doubt prefer to work with Microsoft subsidiaries in low tax countries. As for Irish high earners,big business people have a choice of calling in tax lawyers to think up shelters that would defeat even a nightmarishly complex tax system or they could simply choose not to expand their businesses-a disaster for job creation.
 


consultant

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Some of us in earlier recessions were taxed at similar levels on salaries (adjusted) below the minimum that is now being proposed. Some emigrated - there were much greater opportunities to do so then - the majority stayed and paid.

I would support the suggestion and I do not believe that it would entrepreneurs would be discouraged.
 

Rocket Man

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In normal circumstances I would say that tax rates over 60 percent are too much.
However clearly we are not in normal times and it makes sense that those best able to cope should pay the most. Its a simple but sensible concept.
For me this is far perferable to many of the savage cuts that are being offered.
 

patslatt

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How did the economy perform then?

Some of us in earlier recessions were taxed at similar levels on salaries (adjusted) below the minimum that is now being proposed. Some emigrated - there were much greater opportunities to do so then - the majority stayed and paid.

I would support the suggestion and I do not believe that it would entrepreneurs would be discouraged.
Returning every year from abroad in the 1980s,I found that very many Irish people complained without prompting about high income tax. People in manual jobs who depended on overtime almost felt that the tax system was mocking their overtime work.

Such punitive taxes reduce economic growth in the long run and result in no net gain to the treasury.
 

hmmm

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Why don't Labour just shoot anyone with a bit of ambition? It would be less hassle.

The world has become a very mobile and very connected place for people with skills that are in demand. Anyone with ambition will leave rather than pay these sorts of rates.
 

abccormac

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So you should clutch your wallet if you are a middle income earner listening to Labour's Eamon Gilmore proposing to tax incomes of over €100,000 at 62% including tax,levies and PRSI.
How is €100,000 a year "middle income"? It's more per day than those on minimum wage earn in a week.
 

ARCUS

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The Labour Party would do so Labour plans pay freeze and tax for those on €100,000 - The Irish Times - Thu, Oct 28, 2010

Often when politicians talk about taxing the rich,they are softening up public opinion for increasing taxes on the middle classes. That's because there are not enough high incomes at the top of the income pyramid to generate more than a small proportion of the massive annual taxes of up to half the economy (maybe trending towards 60%+ now in Ireland) taken by voracious welfare states.

So you should clutch your wallet if you are a middle income earner listening to Labour's Eamon Gilmore proposing to tax incomes of over €100,000 at 62% including tax,levies and PRSI.

Finance Minister Brian Lenihan,whose frenzy of tax increases contributed to the depression in consumer spending,thinks this is a tax increase too far,believing that the tax take from Gilmore's proposal would drive people from Ireland. Certainly the foreign executives and managers who work for multinationals would not want to come here to start new businesses and it would be hard to retain those already here. In Microsoft for example,maybe a fifth of the Irish workforce is expats and they would no doubt prefer to work with Microsoft subsidiaries in low tax countries. As for Irish high earners,big business people have a choice of calling in tax lawyers to think up shelters that would defeat even a nightmarishly complex tax system or they could simply choose not to expand their businesses-a disaster for job creation.

I agree Pat - tax rates are on the increase, but unfortunatley there is nothing than can be done. Already no matter what tax reliefs are available anyone earning over €125k must pay 30% tax plus minimum 4% levies and PRSI - probably a total in excess of 40%. looks like this threshold will be brought down and the rate could increase to 50%, in the next Lenihan budget. Unsure of how much additional tax revenue it will generate, but that's the way it is going. And also those earning less than €20k will come into the tax net with at least a tax rate including levies of 10%. The good old days of a low tax economy are well and truly gone, but the money has to come from somewhere....................
 

consultant

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Why don't Labour just shoot anyone with a bit of ambition? It would be less hassle.

The world has become a very mobile and very connected place for people with skills that are in demand. Anyone with ambition will leave rather than pay these sorts of rates.
Care to list the skills and locations that are in demand right now?

Oh yes, and pay attractive salaries and conditions?
 

Cael

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Such punitive taxes reduce economic growth in the long run and result in no net gain to the treasury.
How would taxing landlords, dentists, doctors, solicitors, etc, reduce economic growth?
 

hammer

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We need to simplify the system :)

22% standard rate first €30,000
45% top rate income over €30,000
Get rid of PRSI / income levy - "Bank solidarity tax/pension" 10%
Self employed pay the 10% and get welfare if not working. We are all in this together

All tax credits at standard rate 22% - pensions etc.......

Sorted :)
 

olamp

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Why don't Labour just shoot anyone with a bit of ambition? It would be less hassle.

The world has become a very mobile and very connected place for people with skills that are in demand. Anyone with ambition will leave rather than pay these sorts of rates.
+1 Why would anybody bother breaking their barney working every hour god sends to hand over most of their money to an incompetent corrupt government who will just pitch it down the black hole of the bank bail outs -I would prefer to go on the dole and make THEM pay!
 

patslatt

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Excessive taxation has negative economic effects

How would taxing landlords, dentists, doctors, solicitors, etc, reduce economic growth?
Landlords and property companies make attractive rental property available that attracts people to live here and commercial and industrial property for businesses to invest here. As a communist,you must appreciate the role of property in the Marxist concept of the inputs land/labour/capital.

Solicitors play a vital role in business as sophisticated international and domestic legal services are important for many large companies in their decision on where to locate and invest. Good health services are often a requirement as part of the quality of life for corporate employees.

Excessive taxation of these goods or service will reduce their supply, with negative economic effects. Admittedly,the supply of legal and health services are probably inelastic ie less flexible,in the short run.
 

Cassandra Syndrome

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How would taxing landlords, dentists, doctors, solicitors, etc, reduce economic growth?
I would agree that the professional classes, private and public that are not involved in real wealth creation should be taxed more. Small time entrepreneurs, inventors and innovators should be tax exempt as artists are, because they are in the creative sector.

If they become successful with their venture a sliding scaled incremental income tax should apply, but still at lower rates than the professional classes.

It is small time creative people and entrepreneurs that can bring us out of this mess free of the state.
 

Super8

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Self employed will simply lower their salaries and then expense the rest.
 

LeDroit

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How would taxing landlords, dentists, doctors, solicitors, etc, reduce economic growth?
Don't forget that these people are in cash businesses. So, as in the 1980s, you will see massive illegal evasion and legal avoidance. Ultimately, as in the 80s, you will see reduced tax receipts not increased.

In addition, people with high disposable income spend it in other businesses driving activity across the economy. From boutiques to hair dressers, travel agents to car showrooms, if you suck disposable income out of an economy you see reduced economic activity which reduces wealth distribution, employment and taxes.

All in all what is being proposed is a return to the mistake of the high tax 80s. It has been conclusively proven that if you penalise an activity with taxes you get less of the activity and thus, less tax revenue. Let's not make that same stupid mistake again folks.

Allow me to introduce you all to Mr. Laffer.

http://en.m.wikipedia.org/wiki/Laffer_curve?wasRedirected=true
 

Cassandra Syndrome

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In general, I would have 3 simple taxes. One on the last stage of production consumption expenditure eg retailer (removing VAT), one on all types of income in a year(large tax free allowance, flat rate after that on certain sectors, high on the biggest incomes in the non real wealth creating sectors) and one on output, based on Net Profit alone.
 

patslatt

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I would agree that the professional classes, private and public that are not involved in real wealth creation should be taxed more. Small time entrepreneurs, inventors and innovators should be tax exempt as artists are, because they are in the creative sector.

If they become successful with their venture a sliding scaled incremental income tax should apply, but still at lower rates than the professional classes.

It is small time creative people and entrepreneurs that can bring us out of this mess free of the state.
The dividing line between inventive entrepreneurs and ordinary businesses is often fuzzy.How many would have considered the first supermarkets revolutionary? Or the first call centres?
 


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