"We are the only OECD state where some get back more than they pay in income tax"

[Firefly]

True, and if low income wages rise too high, business will become uncompetitive and leave also. So we need to keep wages competitive.

You should have stopped there!

 

[TheBigShort]

As the economy has recovered, and as the UNR has fallen towards 6%, the cyclical inactivity has declined, yes.

So in a multiple choice question, which of the following statements would you tend to agree with in relation to the Irish economy today?

a) there are more and more people returning to work
b) there are fewer and fewer people returning to work

 

[TheBigShort]

You can still be competitive with high wages. It's all relative to what your/our competition is charging for the same goods/services...

I never said you couldn't. I merely pointed out the contradiction in wanting a high skilled high income economy whilst simultaneously wanting to suppress the incomes of low income workers and then to expect low income workers to be able to afford to live in such economy and paying higher rates of tax for welfare benefits that they need to receive because their income is inadequate.

How many of those are lower paid and pay virtually no income tax?!!

I don't know. How many of those are lower paid and pay virtually no income tax?

 

[Protocol]

So in a multiple choice question, which of the following statements would you tend to agree with in relation to the Irish economy today?

a) there are more and more people returning to work
b) there are fewer and fewer people returning to work

Returning implies that they were previously in work.

So, yes (a) is correct.

But it is also true that in the midst of rising employment, and with many EU and non-EU people getting jobs, there remains a significant amount of non-employment in Ireland.

Our employment rate is rising, yes, but still remains well below the highest employment rates in the EU.

 

[Gordon Gekko]

It's funny, when I was chatting to the guy putting in our water meter he said the only areas where they encountered any hassle where those where "people were used to getting everything for nothing", his words not mine!

The salient point. It had nothing to do with affordability and everything to do with the fact that the underclass want a 1st World lifestyle, with the rest of us funding it.

With regard to income, "we" are not suppressing it for lower income earners; the market is. Jobs that can be done by anyone (e.g. taxi driver) used to be a licence to print money. Deregulation in terms of plates and immigration has meant that anyone with a car and a satnav can do the job and will do it for far less. Without education and upskilling, incomes will always fall. It's the wave that Trump rode, but these people are fundamentally goosed.

 

[Firefly]

I never said you couldn't. I merely pointed out the contradiction in wanting a high skilled high income economy whilst simultaneously wanting to suppress the incomes of low income workers and then to expect low income workers to be able to afford to live in such economy and paying higher rates of tax for welfare benefits that they need to receive because their income is inadequate.

Who said anything about suppressing incomes? Why is it not fair to pay the market rate for both higher and lower earners? Can you point to a fairer model?

I don't know. How many of those are lower paid and pay virtually no income tax?

According to the paper of record, one in three or some 920,700 people will be exempt from paying income tax in 2017.

http://www.irishtimes.com/business/...in-three-earners-pays-no-income-tax-1.2841652

For these people, the income tax rates are obviously not a burden and a deterrent to returning to work. I would guess that a bigger percentage than 33% are returning to work on a part-time basis and are probably paying little or no income tax.

 

[Firefly]

The salient point. It had nothing to do with affordability and everything to do with the fact that the underclass want a 1st World lifestyle, with the rest of us funding it.

There are those who would be happy to fund scroungers with Playstations would you believe!

 

[Tebbit]

It would be my view that everyone - whatever the income should pay tax , obviously if you earn less you pay less. We all use the roads, libraries, schools etc.. Therefore we should all pay something. I think its a bad idea to have people who pay nothing . unfortunately. I think there are people who want to pay for nothing yet feel entitled to everything. And also unfortunately they seem to get plenty of back up in their belief - no one ever says NO. Your not entitled to that.

 

[TheBigShort]

It would be just fantastic to have a high-skilled high-income economy with everyone contributing to the payment of running the state through a fair and equitable taxation system. But let me deal with some realities.
First of all, a high-skilled worker. The very definition of high-skilled means to me, to have obtained a level of skill or qualification that is in general hard-earned and requires the application of a minimum standard of intellect to achieve it, for example, an electronics engineer specialising in microchip design and test engineering. The level of skill to be acquired is out of reach for most. In turn, this high-skilled worker should expect a premium in their income over others for providing the skills to an employer. If the level of skill was easily obtained, then lots of us would do it, and in turn the income would fall and it would no longer be classed as a high-skilled job.
One of the benefits of being a high-skilled worker, of earning a higher wage, is that lots of things that you would like are more affordable to you than other people. Such as nicer homes, cars, holidays, clothes, entertainment, childcare, restaurants etc.
For instance, a high-income earner may think to themselves that there is no need to use public transport. They can afford the city centre parking. They may think, no need to pack a lunch, I’ll buy a sandwhich at the deli or eat at a restaurant.
The only problem with this is if all workers educate themselves to a high level of skill then there will be a lot of private vehicles starting to clog up the roads (not very productive or environmentally friendly). Alternatively, the HSW decide they will use public transport, but who will drive the bus? Or operate the train?
Similarly, if everyone is upskilling then who will make the sandwhich at the deli bar or serve the lunch at the restaurant? Even if the HSW decide to pack their own lunches, short of farming their own produce, they will need somebody to serve them at the local convenience store.
Between the bus driver, the train driver, the deli worker, the shop keeper, the waiter and more in-between, the HSW is dependent on having low-skilled workers in the economy. That’s is how he measures the value of skills, through his higher income and what its purchasing power.
So if you agree, that we still need low-skilled workers (until the robots take all our jobs, high-skilled ones too) then you must agree that they should earn an income. A competitive income, but an income that enables investment to profit and employment to earn.
But if the income of the low-paid worker is too low, they wont work for it and perhaps emigrate. If the income of the HSW is too low, they wont work for it either, or alternatively they too might emigrate for better conditions.
But if the low-pay worker income is too high, it acts as a deterrent to investment and unemployment rises. So the rate needs to be competitive. In this country it is €9.25ph or about €19,000 pa. At €19,000 pa, the worker may need to pay his way. Unfortunately, for many, €19,000 is insufficient to meet the day to day costs and demands of living in this country. For some, it is fine, but those with families, rent and mortgage etc it is insufficient. So to get around that, I would suggest employers pay their employees an adequate income. This is a no-no on this site. It will make the country uncompetitive. But without it, the worker and his family could end up homeless. Homelessness can have really detrimental consequences for mental health and the worker and his family could end up in care at a not insignificant cost to the taxpayer. So better that the worker receives a higher income. But if employers are not prepared to pay higher incomes then how will the worker and his family survive? So rather than have him homeless and hungry and the potential care costs associated with that, this country has a series of programs to prevent that called Social Protection. The purpose of Social Protection is to protect individuals and families and in turn, society in general against the harms caused by homelessness and hunger. For instance, how do you think the tourist industry would fare if visitors witnessed thousands of homeless families wandering the streets. It would collapse that industry further perpetuating unemployment and homelessness. So, instead, the low paid worker gets a rent supplement, or Family Income Supplement or some other provision.
But the problem, it appears here, is that this worker doesn’t pay tax. He shouldn’t receive anything for nothing. So then impose taxes upon him. This will reduce his net pay further pushing him closer to poverty, to the point that it is no longer worth it to work (ditto for the HSW who thinks taxes are already too high here and wont work here) or he may need to rely further on Social Protection.
The arguments being made is that the Social Protections are too generous and encourage people not to work. This has been debated ad nauseum and proven to be false in the main. As can be seen from reducing unemployment figures, if work is available, people will avail of it. For sure, there is a lazy l element in society that wont work and want everything for free, but it has to be asked, if you are an employer, would you employ them? They are a tiny portion of the people who genuinely need a support to keep the roof over their heads, food on the table, shirt on the back etc.
It is not a perfect system, I doubt if it will ever be. But asking that low income workers pay increase tax in order to supplement welfare provisions that they need to receive is self-defeating.

 

[Firefly]

@TheBigShort, how do you decide what's a fair wage?

 

[TheBigShort]

@TheBigShort, how do you decide what's a fair wage?

That is subjective and dependent on a multitude of variables, such as age, experience, qualifications, past performance, projected earnings of the work provided etc

 

[Firefly]

That is subjective and dependent on a multitude of variables, such as age, experience, qualifications, past performance, projected earnings of the work provided etc

Why should someone's age be a factor in determining a fair wage?

 

[TheBigShort]

Why should someone's age be a factor in determining a fair wage?

Correction, it should read age and experience, or simply experience.

 

[TheBigShort]

Ireland’s child benefit regime, offered at a rate of €135 a month per child, combined with its favourable method of taxing families, means that some families actually pay a negative rate of tax on their income – or in other words they receive more from the State than they pay back in taxes.

Of course the article misses the elephant in the room and instead targets minimum wage workers with children to rear. That is, why do high income earners get child benefit? Surely a cut off point in this regard would yield substantial savings for taxpayers and reducing the liability further. Perhaps we could top the charts with the OECD as the least burdened by income tax?

 

[Purple]

So if you agree, that we still need low-skilled workers (until the robots take all our jobs, high-skilled ones too) then you must agree that they should earn an income. A competitive income, but an income that enables investment to profit and employment to earn.

If the supply of low skilled people in the economy decreases faster than the number of low skilled jobs in the economy the value of their labour will increase. Supply and demand. The market. You need not worry; it will sort itself out.

The arguments being made is that the Social Protections are too generous and encourage people not to work. This has been debated ad nauseum and proven to be false in the main.

In your opinion.

For sure, there is a lazy l element in society that wont work and want everything for free, but it has to be asked, if you are an employer, would you employ them?

No. Does that mean money should be taken from their neighbours and given to them to live on?

They are a tiny portion of the people who genuinely need a support to keep the roof over their heads, food on the table, shirt on the back etc.

I agree.

 

[Purple]

You are avoiding the point. More and more people are returning to work, in spite of the apparent unfairness of the taxation system. This is the reality.
You still like to propagate the view that fewer and fewer people are returning to work. This is myth.

I do not.

How can you argue this on the one hand, then argue that we need to keep wages low to remain competitive?

I argue that we need competitive wages in order to remain competitive.

It's a minor report because it's easy to pick through the holes in it and identity it's inherent bias.
For it to dominate, it needs to be impartial, factual and convincing. It is none of those.

Nonsense.

True, and if low income wages rise too high, business will become uncompetitive and leave also. So we need to keep wages competitive. But those that earn low incomes need to be able to live - roof over their heads, food on table, shirt on back, all that stuff.
So either we build an economy where there is a fairer redistribution of wealth (not going to happen anytime soon), or the State steps in to subsidise high income earners by taxing average income earners too much in order to support low income earners feed, clothe and house themselves.

If we had an economy with a fairer distribution of wealth we would have lower income taxes and lower rates of welfare, like in places like Sweden. High marginal tax rates discourage wealth creating activity in the economy. We try to make up for this with unjustly high wages in the State sector and by stealing corporation tax from other countries. What we need is a domestic economy which is competitive in an international market. Wage inflation caused by a construction boom and massive public sector wage increases killed the last real boom, turning it into a bubble.

We now have higher levels of welfare, a massive national debt, a looming crisis in how we will find the money to pay state pensions and a return to demands for an unsustainable public sector wage bill. Do we really want to do that again?

 

[TheBigShort]

No. Does that mean money should be taken from their neighbours and given to them to live on?

No, but what alternative would you propose? Bearing in mind, I use the term 'lazy' very sparingly. A lot of people who choose not to enter the workforce, labeled as 'lazy' will often be from deprived backgrounds. Suffered abuse as children, lack any formal education or training, and effectively institutionalised into a cycle of poverty, drug addictions, alcohol abuse etc.

So, you don't want any of your tax dollars paying for their lifestyles (are you jealous?). And you won't give them a job.
So let them starve? Execute them? What would you propose to do with them?

 

[Purple]

Ireland’s child benefit regime, offered at a rate of €135 a month per child, combined with its favourable method of taxing families, means that some families actually pay a negative rate of tax on their income – or in other words they receive more from the State than they pay back in taxes.

Of course the article misses the elephant in the room and instead targets minimum wage workers with children to rear. That is, why do high income earners get child benefit? Surely a cut off point in this regard would yield substantial savings for taxpayers and reducing the liability further. Perhaps we could top the charts with the OECD as the least burdened by income tax?

We top the chart as the country with the most progressive income tax system where high earners pay more and medium earners pay less than just about anyone else. We should look to move to the Swedish model where low and medium income earners pay their fair share and there are far more indirect taxes such as water charges.
The real elephant in the room is the terrible value for money we get from our public sector. I don't believe that's because the individuals working in it are less competent than their European counterparts, I think it has more to do with structural inefficiencies and general bad practices. If we wasted less money we would be able to deliver better services for the same money or deliver the same services for less money.

 

[TheBigShort]

places like Sweden.

It's always nice to randomly pick a European country that suits your agenda, but speaking of Sweden, they also have the most generous maternity leave for parents. They also have a cap on childcare costs. The max is about €250 a month regardless of how many kids. My childcare is €790 a month for two kids.
The Swedish model is funded by taxation levels that would make you weep.

 

[Purple]

No, but what alternative would you propose? Bearing in mind, I use the term 'lazy' very sparingly. A lot of people who choose not to enter the workforce, labeled as 'lazy' will often be from deprived backgrounds. Suffered abuse as children, lack any formal education or training, and effectively institutionalised into a cycle of poverty, drug addictions, alcohol abuse etc.

So, you don't want any of your tax dollars paying for their lifestyles (are you jealous?). And you won't give them a job.
So let them starve? Execute them? What would you propose to do with them?

If you don't think that money should be taken from their neighbours and given to them to live on then what do you propose?
As I suggested in my last post the standard of services provided by the State is not good enough and not good value for money. Better education, better intervention and better support should help most of those people become productive and active members of society. Do you think it's okay that we just push them to one side to let them live out their days like some sort of a neglected pet? I just don't think that's good enough, not for them and not for society as a whole.
I've had personal experience of the supports the State offers for young people with addiction and mental health issues and it is utterly deplorable. The Gardai do fantastic work in that area but the State provision of medical care , i.e. where the State interfaces with the medical industry ('cause that's what it is, an industry) is nowhere close to fit for purpose. It's not down to a lack of money. It is down to a lack of competence and just not caring. Therefore the people you want to fund to stay at home scratching their backsides, but are really the people with major mental health and addiction issues, are left to perpetuate the cycle of neglect and abuse and under achievement and low self esteem.
See that's why I hate socialism; it blames high earners for the ills of others when the real root cause has nothing to do with them. It's based on petty jealousy and resentment, not on a genuine concern for the poor and forgotten. Welfare is a necessary treatment for a symptom of a problem but it is never the solution because nobody ever felt good about themselves by living off others. In the long term it's like treating depression with drugs; unless you deal with the root cause of that depression you are just creating an addict who can just about function but is even less likely to truly recover. I want better for my neighbours and fellow citizens and I just don't accept the same old tired socialist mantra.