If personal taxes are up to 51% what should Corporation Tax be?
- Thread starter Brendan Burgess
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If we had 0% corporation tax Capital gains and dividends would have to be taxed away over 50% to make up for the 11billion in corporation tax lost a good % gifting to other countries,
Germany rate is 30% at present,
If our corporation tax gets changed as suggested we should link it to the USA rate,
As I understand some of the proposed changes by the USA and others is
If the Irish rate is 15% and the USA rate is 20%
USA companies in Ireland will pay the Irish 15% and pay the USA another 5% for a total of 20%
USA rate
On the other hand, If Ireland charged 20 % the USA will get 0% seeing the Irish rate is the same as the USA,
seeing most corporation tax is paid by USA Companies in Ireland we might as well take the total corporation tax due in Ireland by linking it to the USA rate,
I am sure it is not as simple as stated above but there is no point in Ireland having a low rate and the USA charging extra to reach their rate
We would also need to keep a close eye on the UK rate so they do not undercut Ireland,
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Brendan Burgess
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If you tax them at 0%, then they could retain all their profits and no tax would be paid at all.
Why not tax Corporation Tax profits at the same rate as Income Tax and give a full credit for them?
Let's say 40%
So company makes €100m profit and pays €40m Corporation Tax.
I get a dividend of €600 from the company. I put €1,000 as gross income on my tax return and get a credit of €400.
If my marginal rate of tax is 40%, I pay no further tax.
If my marginal tax is 0%, I get a refund of €400.
And get rid of CGT on sale of company shares. As it would be a double tax of any retained profit.
Brendan
Sophrosyne
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If the CT rate rose to 40% as mentioned, we must think of the consequential effect on the cost of the product or service and the amount of the distribution to shareholders.
Even in the domestic market, Irish companies compete with foreign counterparts for the sale of goods and services and for investors.
Even in the domestic market, Irish companies compete with foreign counterparts for the sale of goods and services and for investors.
That was my initial position as well. The profits will be taxed when they are inevitably passed to an individual, so why bother with the complexity of corporation tax or equating corporate and personal incomes.
It doesn’t work well when it comes to international companies like Google/Facebook/Amazon though. They would generate profit in countries all over the world, then extract that from the local economies back to whatever country they came from (often the US). In 10/20/30 years there could be a global company in virtually every walk of life, extracting money from the economies of smaller countries. So I think countries should charge corporation tax in each country where a company makes a profit, it’s only fair.
A single rate that all countries agree on would seem like a good idea.
Brendan Burgess
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NoRegretsCoyote
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CGT dates from the time when it was difficult for the state to value your wealth in real time. A taxable event occurred when you sold your assets, and taxes are also more palatable when you have a chunk of cash to pay them.
CGT might still make sense for small businesses and land which can be hard to value. But it makes more sense now to tax property and financially assets annually via a recurrent wealth tax.
We've already started this with LPT. I would just have a higher LPT rate for landlords and do away with CGT for residential property entirely.
The anachronism that the CGT liability dies when the person dies would no longer be relevant if you just had a wealth tax too.
A company, for tax purposes, is like a person. When I earn money I pay income tax. If I pay you from my after tax income then you pay income tax. Think of Corporation Tax as the income tax the company pays.
There is all sorts of double taxation. VAT is double taxation since we pay it on goods and services we purchase from our after tax income. The same goes for other forms of duties, service charges and transaction taxes. Why should Corporation Tax be different?
Good idea; just tax the asset, the wealth, each year. Whomever owns it that year pays the tax.
The problem is FF/FG/LAB would see their support base disappear overnight, if the supported such a move,
Labour certainly would as they are the party of the idle rich
na FF/FG are better at taking a few extra quid each year off their rich supporters and still managing to hold on to them,Labour certainly would as they are the party of the idle rich
When the PD disappeared their former supporters went in all directions any that went back to FF/FG left their coats on in case they needed to move in a hurry,
Labour is not as good as you can see by their support base,
Back to the tread,
If personal taxes are up to 51% at present they were a lot higher in the past when Irish Corporation taxes were higher,
in the future, if we are foolish enough to raise Corporation taxes higher than the USA rate
Personal marginal tax rates will have to be away higher than they are at present, on above-average incomes,
My view is Corporation Tax should be at or below the USA/UK rate at all times,
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presidenttttt
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If companies paid 12.5% would that not be a start? Several major organisations pay far less, if anything. I am surprised Ireland is digging in over 15% movement, when they have loads of options to charge 15% and give xx% of it back. We are making ourselves international villains. I think that will have a cost, the companies we are playing up to don't do sentiment or optics, they do numbers, so why damage relations with other countries.
Ryanair is already spreading its eggs into different baskets, with Polish and Malta subsidiaries, at the same time as the irish tax model and regulation model comes under on going scrutiny.
I am not sure how CRH manage to end up paying so much tax, is that a mistake?
Companies like CRH should make more positive PR around contributing to society if they are not gaming the system like others.
Ryanair is already spreading its eggs into different baskets, with Polish and Malta subsidiaries, at the same time as the irish tax model and regulation model comes under on going scrutiny.
I am not sure how CRH manage to end up paying so much tax, is that a mistake?
Companies like CRH should make more positive PR around contributing to society if they are not gaming the system like others.