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Yes there is a pot of gold! - worth €121 billion


Pax

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There are many alternatives to the cuts, and yes, there is a goldmine out there. See Tom O'Connor below

Opinion: Wealthy Irish have

Figures show 33,000 Irish millionaires still own assets worth
"
Figures show 33,000 Irish millionaires still own assets worth €121 billion - Yes there is a pot of gold!

Date: Tue, 2010-10-26 12:27


Confirmation that a large amount of wealth remains concentrated in the hands of a tiny number of Irish people has come from an analysis of figures by Tom O’Connor, Lecturer in Economics in Cork Institute of Technology. O’Connor has analysed the figures contained in the Bank of Ireland’s ‘Wealth of the Nation’ report which stated that there were 33,000 millionaires in Ireland in 2006. The total ‘net worth’ of these individuals (i.e. excluding the value of their principal residences and allowing for any borrowings) in 2006 was €156.21 billion.


This figure of €156.21 billion is further broken down by O’Connor’s analysis to show that they held €112.4 billion in property, €23.4 billion in equities, €4.7 billion in bonds and €15.5 billion in cash.


By using official figures to estimate what has happened in the intervening years in each of these categories of wealth, O’Connor comes to the conclusion that the current ‘net worth’ of these 33,000 individuals is as follows:-

  • Property (value down by 33% as per ESRI estimates) – now worth €77.4 billion
  • Equities (value down by 6% as per FT100 indices) – now worth €22 billion
  • Bonds (value up approx 10% due to the indebtedness of European governments) – now worth €5.14 billion
  • Cash (using a conservative estimate of a return of 1.5% AER) – now worth €16.5 billion
Thus, the figures show that these 33,000 millionaires still own wealth of €121 billion.

Yet Brian Lenihan’s policy, as he and his colleagues prepare to savage what remains of our social services and to attack even further the living standards of the poorest in our society and of ordinary workers, is based on his analysis of last October that “There is no pot of gold that can be raided from the wealthy that can solve our difficulties”.

It’s clear from these figures however that not alone does the ‘pot of gold’ exist but €16.5 billion of it exists in cold hard cash. This gives the lie to the argument often put forward when a wealth tax is suggested that the wealthy’s assets are ‘not liquid’ and that they wouldn’t be in a position to liquefy them to pay a wealth tax.

Not alone that but as O’Connor points out in the course of his analysis these 33,000 millionaires were the principal beneficiaries of approx €20 billion in tax reliefs since 2005. And an analysis from Dr Michael Collins, a Trinity based Economist and member of the Commission on taxation, has shown that 110 of these tax reliefs still exist, resulting in €11 billion per annum being lost to the exchequer, principally for the benefit of the most wealthy.

It’s clear that we are not ‘all in this together’ no matter how many times such nonsense is spewed by politicians. The wealthy are still wealthy. Meanwhile the discussion continues about how much should be cut from the education and health budgets, how the social welfare budget can be slashed, how people on minimum wage can be ‘brought into the tax net’…..

And the wealthy sit on their wealth. How long are we content to let that happen?
and then, there's the practical giveaway of our natural resources.

Dublin Opinion » Blog Archive » GAS VALUED AT
 

Sync

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And the wealthy sit on their wealth. How long are we content to let that happen?
Snigger. I wonder why he thinks any rational person will keep their money in a state which decides to seize legally held assets? Which is clearly what he's suggesting.Utterly ridiculous. You'd cause an immediate run on the banks because only a lunatic would keep their money there.

If you want to remove tax incentives for people to stay here then fine. Just don't bitch when they move their assets abroad.
 

Pax

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If you want to remove tax incentives for people to stay here then fine. Just don't bitch when they move their assets abroad.
Tax incentives? Surely you mean inequitous massive subisidies from the rest of us?
The by-and-large, scum that rises to the top of an economy like ours, will find it hard to go anywhere with a more regressive taxation system. This is frequently over-states by defenders of the bankers class such as yourself.

As O'Connor writes in the article linked above,

On the basis of the above figures, even if this group paid just a 1% wealth tax, the Irish government could take in €1.2bn in 2011 and every year thereafter. Taxes as high as these already exist in France, Norway and Switzerland and are set to be introduced in several other EU countries in the near future.
Even a modest 5% tax would prevent the cuts to education, health, social welfare budget, minimum wage etc.

People should remember the many alternatives to the custs, the next time they read, hear, or watch the mainstream media lie and fail to bring alternatives into the debate.
 

rockofcashel

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Theres billions off the coastline in gas and most likely oil as well, but we'll see little enough of that either.. kind of reminds me of how we exported food during the Famine
 

Odyessus

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Tax incentives? Surely you mean inequitous massive subisidies from the rest of us?
Refraining from taking even more money from people is not a subsidy. A subsidy is when the government takes money from some people and gives it to others, e.g. from the rich to the poor.
 
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Pax

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<link to an ad for a typical neoliberal book>
A typical comment from someone posting with an ad to a typical book stemming from the ideology that is failing and given nice review snippets by none other than, Jim Power, Moore McDowell, Dr Constantin Gurdgiev, etc

All the economists we should in no way be listening to. Ye're a brass knecked, if grisly crew, I'll give ye that.
 

Panopticon

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Even a modest 5% tax would prevent the cuts to education, health, social welfare budget, minimum wage etc.
"modest"? One euro in every 20 of what someone owns to be taken by the government? It just means that nobody will store any wealth in our economy! Have you studied the history of wealth taxes?
 

Pax

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Refraining from taking even more money from people is not a subsidy.
A subsidy is when the government takes money from some people and gives it to others, i.e. from the rich to the poor.
Not really. Most economists considered it a subsidy. Which is why at EU level it is a regulated and restricted policy.

Of course your view helps if you believe the wealthy are deserving of their wealth in the first place. I don't. I'm generally of the view that "property is theft." and profit of the backs of wage-slavery is abhorent.

Most political economists accept that in capitalist economies the differences in ownership of productive property that accumulate within a single generation due to unequal sacrifices are minuscule compared to the differences in wealth that develop due to inheritance, luck, unfair advantage, and profit-making.

All evidence about the origins of differential wealth at the end of the twentieth century support the opinion Edward Bellamy voiced (in 1888) in his famous book Looking Backward:

"You may set it down as a rule that the rich, the possessors of great wealth, had no moral right to it as based upon desert, for either their fortunes belonged to the class of inherited wealth, or else, when accumulated in a lifetime, necessarily represented chiefly the product of others, more or less forcibly or fraudulently obtained. "

Of course, here we add in redistribution upwards to the tune of giving 33,000 millionaires approx €20 billion in tax reliefs since 2005.

And an analysis from Dr Michael Collins, a Trinity based Economist and member of the Commission on taxation, has shown that 110 of these tax reliefs still exist, resulting in €11 billion per annum being lost to the exchequer, principally for the benefit of the most wealthy.

Yet we still have to listen to self-interested mouth pieces for the bankers class tell us we need to cut public services, tax those on average incomes, decrease the minimum wage, take 60,000 euros of each and every one of us by increasing the pension age, 50 cent on medical prescriptions, etc.
 

clontarfblue

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You can't just take someone else money. It is theft, and any government that performs such actions is robbing from the people. We are not Zimbabwe.

This money has been earned, invested (whatever way its irrelevant), and it is rightfully theirs.
 

Edo

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Theres billions off the coastline in gas and most likely oil as well, but we'll see little enough of that either.. kind of reminds me of how we exported food during the Famine
Meh - they have been saying that since 1976 - given the "terrible" terms we have for exploration and exploitation - isnt it a bit suspect that there hasn't been a stampede of oil and gas companies into exploiting these "billions" in the succeeding 40 years - and given the amount of dry wells that have been hit by the few companies have gone to the expense of searching there - do you seriously believe in this fairytale?

Of course - its the Templars and Masons, elites, Bilderbergers and that big Alien dud from Omicron 8 that have secretly laid underwater pipelines from these massive fields to suck away the resources to their secret HQ of Atlantis on the mid atlantic ridge where they are storing and selling it off - while we were all busy watching a bunch of anarchists protesting over a dummy pipeline in Mayo bog...........................

Fecks sake - there are no massive reserves......nada...........none - just another example of the Irish "Stroke" fairytale that emerges every time we find ourselves in the sh^t where we need to believe that there is an easy painfree and consequence free answer to our problems and that dem foreigners and elites are responsible for denyin us our godgiven right to a free-lunch.

I dont doubt that there are hydrocarbon reserves of some quantities out on the contintental shelf - but the price of oil and gas would really have to hit 200+ dollars a barrel to make them viable given the difficulty and expense in exploiting them.

Jesus ROC - thought you have more sense than fall for that nonsense
 

Pax

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To add to the wealth tax and hydrocarbon resources, I should add the below (source imf data).

The argument is used in the context of an expansionary investment programme, however, it highlights the redundancy (and self-interested class nature) of the austerity/cuts policy agenda.

Notes On The Front: Do We Invest Our Way to Recovery or Cut Our Way Into Receivership? The Recession Diaries - October 8th


.....
For the Eurozone countries which we have data for (I have excluded Finland as it is an outlier – with cash/assets worth 88 percent of GDP, mostly in social security funds), Ireland is the league leader, well above all other countries. What are these cash and assets? Primarily two:

  • NTMA cash balances: this is the ‘cash-on-hand’ accumulated through pre-borrowing – borrowing over and above what is needed by the state for current funding purposes. This is kept as a buffer in the eventuality that there are temporary problems in accessing the international market. It can be referred to as ‘rainy-day account’. At the end of June 2010 cash balances made up €20 billion.
  • National Pension Reserve Fund: this is the value of assets (equities, securities, cash, etc.) contained in the fund. A significant portion of this fund – approximately €7 billion – is tied up in bank shares. At the end of June 2010 the discretionary fund (that is, excluding bank capitalisation) stood at €17 billion
These are considerable resources.


This is not an argument for ‘raiding the piggy bank’. A progressive investment strategy must adhere to the fundamental principle: resources should be made available for those investments that we would have to make in any event, regardless of the recession, to boost future productivity. In many instances, therefore, we wouldn’t be diminishing our cash and assets at all, merely re-directing it.


...


So we have the money. We have the need. We have the people to do the work. What’s the hold-up?
 

GJG

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A typical comment from someone posting with an ad to a typical book stemming from the ideology that is failing and given nice review snippets by none other than, Jim Power, Moore McDowell, Dr Constantin Gurdgiev, etc

All the economists we should in no way be listening to. Ye're a brass knecked, if grisly crew, I'll give ye that.
Normally reviewers read the book before offering a review, but you if you can manage to draw conclusions without facts, more power to you.

I think that we need to radically increase tax revenue, but the figures suggested here are just plain mad, and anyone who thinks otherwise has a poor grasp of the facts. Even if we could afford the current level of spending (and we can't) that would still be no excuse for the incompetent and wasteful way our public services are run.
 

Pax

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I dont doubt that there are hydrocarbon reserves of some quantities out on the contintental shelf - but the price of oil and gas would really have to hit 200+ dollars a barrel to make them viable given the difficulty and expense in exploiting them.



€420 billion to be exact. That figure is based on the estimate, issued by the Department of Communications, Energy & Natural Resources (DCENR) in 2006. I'd say there's enough there to make some profit, don't you think?
The Someday Independent is good on this below if you want to check it out.

Dublin Opinion » Blog Archive » GAS VALUED AT

Just a quick post to highlight the Shell to Sea factsheet, that there is €420 billion worth of natural gas of the coast of Ireland - all of which has been given for free to Royal Dutch Shell, Statoil, Exxon Mobil.
Ministers Ray Burke and Bertie Ahern changed Irish law in 1987 & 1992 so that multinational oil companies:
• own 100% of the oil and gas they find under Irish waters;

• pay no royalties on it;

• can write off 100% of their costs against tax, even costs incurred in other countries;

• have profits taxed at 25%, compared to an international average of 68% for oil-producing countries;

• can export the oil or gas outside Ireland;

• can sell to Bord Gais at full market rates.
Green Party minister Eamon Ryan has continued to issue licences to multinationals on these terms.
Now, call me old-fashioned, but I would have thought that the current situation would constitute a game-changer as regards that deal.

Anyway, have a read of the Shell to Sea leaflet, and have a think about it the next time someone tells you that the IMF is our only option.

This is just a short extract, the entire piece is linked below.
*The figures in detail
€420 billion is a lot of money. However, the true value of Ireland’s gas and oil is probably much higher. Our figure is based on the estimate, issued by the Department of Communications, Energy & Natural Resources (DCENR) in 2006, that the amount of gas and oil in the Rockall and Porcupine basins, off Ireland’s west coast, is 10 BBOE (billion barrels of oil equivalent). Based on the average price of a barrel of oil for 2009 of $60, this works out at $600 billion, or €420 billion. This does not take account of further oil and gas reserves off Ireland’s south coast. The total volume of oil and gas which rightfully belongs to Ireland could be significantly higher. The DCENR has also published much higher estimates at various times. Also, as the global price of oil and gas rises in the coming years, the value of these Irish natural resources will rise further.

++++++++++++++

A better deal is possible
Several countries have recently changed their laws to reclaim a greater share of gas and oil wealth
Even supporters of the Corrib Gas project rarely try to defend the outrageously generous terms of Ireland’s gas exploration laws in public. Instead they rely on the myth that the deal, once done, cannot now be changed. Nothing could be further from the truth.

The existing deal already allows Ireland to halt work on the Corrib Gas field. The licensing terms state: “The Minister may … require that specified exploration, exploitation, production or processing activities should cease … in any case where the Minister is satisfied that it is desirable to do so in order to reduce the risk of injury to the person … or damage to property or the environment.”

In fact, there is a worldwide trend of governments reclaiming ownership of privatised gas and oil reserves. In 2006 in Russia, the state-owned Gazprom took back control from Shell of the largest integrated oil and gas field in the world, Sakhalin-2, after Shell was accused of breaking environmental laws.

Bolivia nationalised its entire gas industry in 2006. At first, the reactions from the corporations and international markets in both cases were furious, with dire warnings given about how the countries would suffer from lost investment. But these warnings came to nothing: in the end the oil giants simply went along with these changes when they realised there were still enormous profits to be made.

There are many examples of successful nationalised oil and gas industries. Norway is one of the best examples of state-controlled extraction of gas and oil. Ironically, a significant chunk of the Corrib Gas profits will benefit the Norwegian people through Statoil, as it is majority-owned by the Norwegian government and has a 36% stake in Corrib.

Venezuela has begun nationalising the industry within the past two years. Most Venezuelans lived in degrading poverty throughout the 20th century, while enormous revenues from oil and gas went to foreign companies and a tiny Venezuelan elite. The government has redirected oil wealth into public spending, bringing health, education and dignity to the poor.

Even if Ireland’s gas and oil fields were not nationalised, hundreds of billions of euro could be raised if Ireland took a similar share in its own gas to that which applies in other countries.
Shell to Sea - All the Facts.
 

GJG

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You can't just take someone else money. It is theft, and any government that performs such actions is robbing from the people. We are not Zimbabwe.

This money has been earned, invested (whatever way its irrelevant), and it is rightfully theirs.
It is simply bad economics to base all taxation on income (or income proxies like VAT).

Nobody disputes that taxes on cigarettes discourages smoking. Why is it hard to accept that the same is true for other taxes? Ireland, uniquely almost in the world, focusses its taxes on earnings and not on property. There are no almost true property taxes, speculation taxes or windfall taxes, so that all revenue must be generated from taxes on economic activity.

That would predict that people are motivated to invest in speculation, particularly property speculation - sound familiar?
 

Pax

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Theres billions off the coastline in gas and most likely oil as well, but we'll see little enough of that either.. kind of reminds me of how we exported food during the Famine
In the sense that "famine" was caused by free-market policies imposed upon us, (and the Indians in their fake "famines") and used to benefit the economic development of England. The difference being, that most countries, (such as Russia and Nigeria), get a better deal from their natural resources. The only comparison to our giveaway is probably the likes of Iraq.
 

Edo

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Fair enough Pax - but why has this not been exploited yet?

If there is this much - and given the fact that oil and gas are being exploited in the Artic and far harsher places.............and given the wonderful giveaway terms - why arent all the big oil companies lining up to pump it out before we change the terms?

Sorry - dont buy it for an instant -

There may well be 420 billion worth of hydrocarbons there - but if the technology isn't there to take advantage of it - or if it is spread over a vast area in such small quantities to be non-commerically viable - it might aswell not be there at all.

Put it this way - it is estimated that there is £7,900,000,000,000,000,000,000,000 worth of gold in the Sun

gold in the Sun? - Hot solar atmosphere - Sun|trek

problem is working it out how to get it out of the Sun in the first place

Time to put this "RainyDay" possible hydrocarbon windfall aside and worry about "nationalising" this resource until something significant starts coming ashore - on previous experience I wont be holding my breath
 

wombat

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Time to put this "RainyDay" possible hydrocarbon windfall aside and worry about "nationalising" this resource until something significant starts coming ashore - on previous experience I wont be holding my breath
I emigrated to Canada in 75 with the aim of getting into the oil business as we knew the next big development would be off the West Coast of Ireland. The only oil that will be brought ashore by the time I retire will be the WD40 in the tool kits:lol:
 

Congalltee

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Rather than raiding these pots of gold does it not make more sense to restore the public finances so that current expenditure is equal to or less than current receipts from recurring stable sources. That means
- tax all income as income, whether the source is earnings, 'expenses', social welfare, cspitsl gains or inheritance.
- tax property through flat rate taxes rather than value of homes to ensure equity between Dublin and rest of country.
 
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