Friday 5 February 2010
Any initial thoughts on the Finance Bill 2010?
Nat O'Connor: I'm still reading through the Finance Bill, but I want to put up this post to give readers a space to post any comments over the weekend about their own impressions so far of the Bill, any interesting coverage, any likely implications, etc.
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3 comments:
@Nat O'Connor
I see you posted on the ESRI on another thread. Apologies I missed that. I will copy your reply on to the other finance bill thread where the ESRI governance is discussed and reply there.
An interesting aspect of Irish tax policy is that we give tax incentives for both mortgages and pensions. So we simultaneously encourage people to save and take out loans.
I think the government should allow people to use their pension to pay off part of their mortgage. Paying off a mortgage is a 100% risk free investment and gives a decent return (about 5%?). This is better than most pension investments.
1) The Irish tax take as a % of the total economy is one of the lowest in the EU. We are scrambling about at the bottom with Romania.
2)Many low earners are making substantial direct contributions to the State by way of PRSI and the levies. Indeed by opting to work, they are also not a cost to the State. Low earners do not save - they spend locally.
3)The current deficit is made of a cyclical part and a structural part. The cyclical part will take care of itself, the real issue is the amount of the structural debt and how to tackle it.
4) The current attempts to control expenditure are class driven. For example, the Minister for Finance, Belvedere's former Head Boy, has made no effort to cut the huge subsidies to private schools, but has cut teaching assistants in National Schools.
5) Subsidies to property speculators, small & large, have not been touched. Interest relief & capital allowances continue onward & upwards, in cost anyway. The degree of tax expenditures still in place is astounding.
6) The total lack of focus in the Finance Bill continues a pattern of complete and total dependence on foreign multinationals for economic development. The Bill is mainly aimed at providing tax scams for those currently fleeing Bermuda, the Caymans, Switzerland etc. and providing a constant flow of fees for perhaps the Bill's real authors - the various International tax advisors in the main accountancy & legal practices.
7) The majority of the cuts implemented to date have led to very little net savings.
The Government has decided to treat the economy like a rubber duck dropped into the Liffey - At the total mercy of the surrounding elements.
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