Who will form the next government? - The results

[odyssey06]

No broadening the tax base is not merely about the total amount of revenue. It is the difference between a diverse and concentrated asset portfolio.
No economist would say a country had a broad tax base if they were raising huge sums from a single source of tax eg over reliance on corporation tax.

No economist would say we were broadening our tax base by increasing corporation tax rate.

 

[WolfeTone]

A broad tax base would be more stable. We're overly reliant on corporation tax.

I agree, do you have any suggestions where to tax?
Personally, I think the USC is a punitive charge that has stymied economic activity. Removing this for low and middle income earners will be offset by taxes on increased consumption, profits and employment. It will have an enormous impact in provincial towns and villages that are struggling to feel any sense of recovery. The high street will get a much needed boost also.

 

[WolfeTone]

No broadening the tax base is not merely about the total amount of revenue. It is the difference between a diverse and concentrated asset portfolio

I agree, it is not merely about the total revenue. It is about the total revenue generated from a diverse and concentrated asset portfolio.
But adding additional sources of revenue could inadvertently reduce total revenues overall.
No economist would agree that adding additional sources of revenue that subsequently reduced overall revenue streams equated to broadening the tax base.

 

[odyssey06]

I agree, it is not merely about the total revenue. It is about the total revenue generated from a diverse and concentrated asset portfolio.
But adding additional sources of revenue could inadvertently reduce total revenues overall.
No economist would agree that adding additional sources of revenue that subsequently reduced overall revenue streams equated to broadening the tax base.

It has nothing to do with overall revenue going up or down.
It is a different measurement entirely.
Increasing tax revenue is not an increase a broadening of the tax base.
Its the difference between height and weight.

 

[WolfeTone]

It has nothing to do with overall revenue going up or down.

Not exclusively, no. The definition is much broader than that - an equitable and sustainable tax system is at the center of it also.

So for what purpose is the concept of 'broadening the tax base' ?

 

[losttheplot]

Less tax from more people would be more stable then more tax from less people. Property tax was one way of broadening the tax base. During the Bertie years more and more were taken out of the tax net. Stamp duty and Corporation tax got us through. Once they dried up, the party ended.

Imagine a single income household on 80k versus a 4 income house hold with 4 x 20k. In the single income house, one job loss could ruin them. The 4 income house could survive, with less money though.

 

[Purple]

I understand the point, but in my view 'broadening' and 'deepening' is simply splitting hairs.
Limiting the definition of broadening the tax base to;
is incomplete.

For what purpose would a government want to broaden the tax base?
Obviously to raise additional revenues, correct? Those additional revenues can serve to provide additional services, or can be used to reduce tax rates on other sources to provide a more equitable tax system.

Additional sources of tax revenue can also be punitive. They can inadvertently have the opposite effect to raising revenue and instead reduce revenue streams - for what purpose is broadening the tax base through increasing the different sources then?

There is little to be gained from broadening the tax base if the knock on consequences on the total value of revenue streams are not considered.

No, broadening the tax base is broadening the tax base. You may not like it but that's what it is. Charging the same people/sources more tax is not broadening.
How to broaden the tax base;
Property Tax on all properties, especially the family home.
Water charges; this is also a great environmental tax.
Get everyone into the income tax net. Everyone should pay some tax.
Get pensioners to pay the full rate of PRSI; they didn't make enough contributions to pay for their pension during their working life so why stop when they are retired?
Make childrens allowance taxable and maybe increase it by 10%. That way rich people aren't getting big social welfare payments from poor people.
Make sure large corporations pay 12.5% corporation tax.

We need to stop taxing work so much.

 

[WolfeTone]

Less tax from more people would be more stable then more tax from less people

Absolutely, but if you consider that everyone pays tax (a homeless person on the street pays VAT on the purchase of a coffee and sandwich) then more tax from the same amount of people is in effect the reality.

But for what purpose? Primarily to devise a fair and just taxation system. That is wholly subjective of course and sets the political discourse.

Outside of political discourse and what should be taxed or not, or what is the appropriate level of taxation, the tax base is sum of all the revenue sources on the available gross value of economic activity in the economy.
If additional sources of revenue (new taxes) are implemented and the consequences of those are to return a bigger slice of revenue in monetary terms for the State but from a smaller pie (economy retracts) the tax base has narrowed - the ability of the State to raise additional revenues has diminished.
If additional sources of revenue return a bigger slice of revenue from a larger pie (economy expanding) the tax base has broadened - the ability of the State to raise additional revenues has increased.

Devising new sources of revenue from the economy is broadening the tax base in common parlance, but if the consequences of implementing those taxes are not considered then such an interpretation is incomplete.

 

[josh8267]

Get pensioners to pay the full rate of PRSI; they didn't make enough contributions to pay for their pension during their working life so why stop when they are retired?

You need to do quite a lot of reading up on who pays what when it comes to prsi,all of the prsi collected under class s including all collected under earned income landlords and so fort covers only 23% of the money paid out to cover s class pensions you and your employer pay the other 77%,

 

[Leper]

Get pensioners to pay the full rate of PRSI; they didn't make enough contributions to pay for their pension during their working life so why stop when they are retired?

1. Again, Purple at his brilliant worst. Now the pensioners are the conscience of Ireland Ltd. Most of us pensioners worked through recession after recession; recessions became normal to us. So much so that the last recession in our eyes was a doddle.

If you've worked continuously from your teens until you're 65 you've earned your pension. I'd love to see any political party try to put that one (Purple's suggestion) over on us. Nobody's gettin' a silver spoon from me.

2. The new government isn't nearly formed yet. I think it will be some time with Mary Lou McDonald and her Sinn Féin involved. But, this can all be over-ridden fast if Fianna Fáil and Fine Gael decide to form a Grand Coalition and bring on board some others. It will be seen as a descendant of Lanigan's Ball, but they not communicating is sending out a message that they are not even interested. Therefore, this is a cop-out from FF and FG. But, you never know, they probably still think they're the cavalry.

My take on all this (albeit at an early stage) all our politicians are confused and don't know what way to turn. For once, they've all got to think and avoid losing more ground.

For the record:- I did not vote SF,Green, FF,FG, LAB. I did vote for everybody else on the ticket.

 

[blured]

I think we can put the idea of any political party broadening the tax base in the current climate to bed. The list posted by Purple would be a great start, but its just not going to be implemented by any party as it would be wildly unpopular.

How much scope do we have from the EU to reduce VAT rates. I think as a first step we should look to reduce VAT (as a regressive tax) and offset this by removing the Income Tax/PAYE/Earned Income tax credits

 

[Purple]

You need to do quite a lot of reading up on who pays what when it comes to prsi,all of the prsi collected under class s including all collected under earned income landlords and so fort covers only 23% of the money paid out to cover s class pensions you and your employer pay the other 77%,

The average person pays about €30 a week in PRSI. That contributes towards pensions, disability and many other forms of welfare. Therefore the contribution towards the state pension is maybe €10 a week. Including employers PRSI that could be €30 a week. To fund a €13,000 a year pension you'd need to be contributing about €255 a week for 40 years. source. I'll say it again; the average person comes nowhere near funding their own State pension. You would have to earn an average of €320,000 for 40 years to pay enough PRSI to contribute an average of €255 a week in total PRSI payments and given that only a small proportion of that goes towards the State pension you still wouldn't be funding it.

 

[Purple]

Most of us pensioners worked through recession after recession; recessions became normal to us. So much so that the last recession in our eyes was a doddle.

More than any other group in Ireland you're the guys that caused the last recession and suffered least as a result.

If you've worked continuously from your teens until you're 65 you've earned your pension.

No you didn't; see my last post.

Nobody's gettin' a silver spoon from me.

No, you're getting it from those now in the workforce. I may be lucky enough to get the same. If so I'll say "thank you" to the young people who are funding the pension I didn't earn.

 

[WolfeTone]

Charging the same people/sources more tax is not broadening.

Get everyone into the income tax net. Everyone should pay some tax.

This is simply charging the same people/sources more tax.

Get pensioners to pay the full rate of PRSI

This is charging the same people/sources more tax

Make childrens allowance taxable and maybe increase it by 10%

This is charging the same people/sources more tax.

This is the political discourse surrounding the concept of broadening the tax base. In it is insufficient.
All people are taxpayers. That some pay PAYE, others pay self-assessment, others pay tax on dividends, everyone pays VAT, some pay tax on rental income, others pay property tax, some pay high rates of USC, others pay low rates of USC, some pay motor tax, etc...etc...
It is all adjusting, tinkering, interfering, with the economic activity of an economy in order to extract as much revenue to pay for public services without negatively affecting, in the round, the value of that economic activity.
Simply defining the tax base as the number of available sources of revenue is inadequate and insufficient.

 

[Purple]

This is simply charging the same people/sources more tax.



This is charging the same people/sources more tax



This is charging the same people/sources more tax.

Are you serious?
Do you really not understand what broadening the tax base means?
I find this hard to believe. Are you being deliberately obtuse?

This is the political discourse surrounding the concept of broadening the tax base. In it is insufficient.
All people are taxpayers. That some pay PAYE, others pay self-assessment, others pay tax on dividends, everyone pays VAT, some pay tax on rental income, others pay property tax, some pay high rates of USC, others pay low rates of USC, some pay motor tax, etc...etc...
It is all adjusting, tinkering, interfering, with the economic activity of an economy in order to extract as much revenue to pay for public services without negatively affecting, in the round, the value of that economic activity.
Simply defining the tax base as the number of available sources of revenue is inadequate and insufficient.

Nothing negatively affects the value of economic activity more than taxing work. If you have a choice to work harder and/or longer but more than 50% of what you earn will be taken from you in payroll taxes that is a disincentive to work. If there is a tax on your property that is not a disincentive to work.

How would you define the tax base then? Is there dome formula that you can share?

 

[WolfeTone]

How would you define the tax base then?

The tax base is the total value of assets and income that can be taxed in an economy.

Additional sources of revenue imposed that reduce that value, narrows the tax base.
Additional sources of revenue imposed that increase that value, broadens the base.

The different categories in which tax is collected - income tax, Corporation tax, VAT, Motor tax, VRT, property tax etc and the rates that are applicable at various points of income or applied to different asset classes, goods and services is the circus which drives the political discourse.

 

[Leo]

Are you serious?
Do you really not understand what broadening the tax base means?

This is someone who believes broadening and deepening are effectively the same thing!!

but in my view 'broadening' and 'deepening' is simply splitting hairs.

 

[Sophrosyne]

Are we jumping the gun?

Is a grand coalition possible?

 

[Purple]

The tax base is the total value of assets and income that can be taxed in an economy.

No, that's the potential tax base.
The tax base is the proportion of that potential base which is actually taxed.
If you only tax part of it, or tax part of it far more heavily than most other parts, then you have a narrow tax base.

Additional sources of revenue imposed that reduce that value, narrows the tax base.
Additional sources of revenue imposed that increase that value, broadens the base.

That's incorrect.

 

[Leper]

Are we jumping the gun?

Is a grand coalition possible?

]



A Grand Coalition is possible. Mr Varadkar is playing hard-to-get while Mr Martin will hop into the political bed of anybody who'll allow him to be Taoiseach.

I believe Mary Lou was caught on the hop and never believed she was in line head up the next government. I'm also wondering if she wants to head up the next government. When you are the top, there is only one way you can go.

I ain't sure that Mr Varadkar and Mr Martin will be leading Fine Gael and Fianna Fáil into the near future either. A Grand Coalition would be easier on FG supporters if Mr Varadkar was sacked.