Our Corporation Tax Rate is not safe?

Assorted international currency notes.
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According to EUBusiness our Corporate Tax rate is not as safe as our government is claiming. Steffen Seibert the current head of the German governmental press- and information-agency has stated:

The German government will not be making proposals” regarding potential reforms to be put in place for the up to 90-billion-euro (123-billion-dollar) package

“But it is clear that corporation tax should be one point among others when one considers how to increase the ‘receipts’ part of the budget,”.

The German Daily Bild also launched an attack on our low tax rate in an editotial,

“First the country steals jobs and tax revenue from other countries with its extremely low taxes, and now the other countries have to pay up for the second time to prevent its banks from collapse,”

So the Government need to be telling us the truth on this one!

If we raise it, we could be jeopardising our recovery, as it could cause a flight of companies. While the average in the eurozone is 25.7%, we could raise it slightly and not damage it too much, but how much is that? Half a percentage point, a full percentage point? Interesting days ahead on this.

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Why not to Vote Fianna Fail or Greens next January

Brian Cowen's signature.
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One paragraph from yesterdays Observer’s Editorial should be memorised and remembered for a long time.

Much of that story is familiar from other countries caught out by the credit crunch. But Ireland’s unique misfortune is to have, in Brian Cowen’s Fianna Fáil government, leaders who shipwrecked the economy and then capsized the lifeboats. The initial crisis response in 2008 was designed in such a way as effectively to absorb the doomed banking sector into the state, with no safeguards for taxpayers. While fitting as a kind of poetic commentary on what had happened in the boom years, as policy it was insane. Every cent of tax revenue disappeared down a black hole of debt; a ballooning budget deficit demanded brutal austerity measures – public sector cuts, tax rises – which drained any remaining cash out of the economy and prolonged recession.

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Recession Diary: 27th May 2009

So it happened. Something I didn’t think would happen. Or maybe something I wouldnt let myself think would happen. All the warnings were there, but I didn’t think it would happen.

I got handed my notice.

Thats right. I am now unemployed.

I never thought I would be upset about loosing my job. But everytime I think about it, my eyes well up.

Yes, I know I am not alone in loosing my job, but its a gutting esperience when it happens.

Whats to blame for me loosing my job?  The Government.

Why? Cause they have raised VAT (Something my employer absorbed and didn’t raise prices) and they have raised income tax. This means people are spending less.

The retail sector in this country is in a downward spiral. Shops, especially independents are tight for cash, with bills not being paid etc.

The Government need to see what its doing wrong as at the moment all it is doing is shutting down small business. We need to get Ireland back to work!

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The Bludget doesnt effect me that much

As I apporached today I was fearful that they would do something that would directly effect me (Im selfish I know). But as someone on minimum wage I thought they might do something to the tax limits, but they didn’t.

What did you make of the Bludget?

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A levy on meat? Feck off!!!

Sausage shelves in tesco after recall 7/12/08Image by stephen.spillane via FlickrAccording to an article in todays Sunday Business Post the Department of Agriculture is considering “an extra levy that will be charged on all Irish meat products purchased by consumers”

Are they serious?

The recent pork recall cost consumers money and has made Irish Pork a damaged brand and now they want us to pay an extra tax on it? You must be kidding me!

The reason for the levy is to create a “contingency fund in the event of future food scares and recalls”. The consumers already bear the burden of this considering that our tax revenues pay for the compensation packages.

If they bring this in it will be another own-goal by the Government and will be another reason to shop in the north. It will also make Irish meat uncompetitive in its home market! Something which will see the sale of foreign meats increase.

This is absolutely crazy and I hope the mandarins in the Department of Agriculture get a clue and don’t introduce yet another levy when it also looks like we will see an increase in the second home levy and the introduction of water charges means that we will be over taxed!

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VAT increase – The Costs

There is a post on Iain Dale’s Blog about 15 reasons why a VAT cut won’t help so how many of them also apply to the VAT increase that will occur hear on the 1st of December.

1. Deflationary for the next 12 months

Inflation Gaurenteed to be at leats 1.1%

2. Reduces business liquidity possibly by over £1bn

Yup, the same affect not sure about the value

3. Little or no help to SME’s in the B2B sector

No change there

4. Helps lower income individuals/families proportionately less than higher ones

Hits lower income groups more.

5. Gives businesses / retailers abilities to mark up price changes eg 70p chocolate bar is now 68.52p

Forces retailers to absorb the cost increasing, lowering there margins and reducing scope for growth

6. Reduces the price of cigarettes probably first time in 20+ years

Cigs go up again (no harm IMO)

7. Reduces alcohol prices – possibly encouragement to binge drinking

More increases…

8. Involves re-priceing by virtually all retailers at their busiest time of the year (supermarkets & garages can cope easily – others less so eg restaurants)

More costs, less expansion

9. Reduces restaurant/ hairdressers etc tip income Lower paid impact again

Reduces liklihood of tips due to higher costs

10. Requires HMC&E to recalculate Flat rate VAT scheme rates & notify SME’s – initial confusion

Yup, exepet it will be Revenue doing all this…

11. Reversal to recover lost income requires possibly an increase of 33.3% in VAT rate

okay so this one wont effect

12. Reversal of rate increase will slow recovery

It could slow any possible recopvery due to increased costs

13. Optional increase in Income Tax personal allowance could have given 75% benefit immediately ie December/ January wheras VAT benefit spread over 12 months

dosent effect

14. Doesn’t reduce food prices – idea why not negative VAT rate!

Increase food prices

15. Doesn’t significantly help housing market – critical

Definately dosent help housing market.

So two of the fifteen wont happen with the planned increase, but the increase will hurt in the long term.

A reduction in the top rate of tax helps those on low income – wtf???????

Sam over at Pull Out The Pin in his PD Conference reaction post claims the following

The tax cuts are terrific, as I am a supply-sider and am firmly convinced that reductions in the upper rate benefit people on lower incomes profoundly

Now I must say that is news to me. I left a comment on his blog saying

How can a lower upper rate benefit those on low incomes. I speak from a family in the lower band that the tax cuts introduced in the last budget on the upper tax band did nothing to help us. I just dont get it, it only helps the rich, those paying the top rate. The Labour proposal will help us, but the PD proposals will not

So here’s my scenario. I’m on the lower tax band, earning €30,000 a year, and the PD’s go ahead and reduce the top rate of tax to 38% and increase the tax band to €50,000. How does it help me?

It dosent on the other hand, here’s another scenario a I’m a single person €60,000 a year, current €34,000 of this is taxed and at 21% and the remainder (€26,000) is taxed at 41%. So if the PD’s go ahead and reduce the top rate of tax to 38% and increase the Standard Rate Cut Off Point €50,000, I’m singing and dancing in the street.

So how does it help people on low incomes Sam?

All tax information taken from the Citizens Information Website

Government Announces New Plan for Care of the Elderly

Via RTÉ

Its about time they did this but I have huge reservations to this part of the Plan

The plan provides for the State to recoup some of the cost of care from older people after their death, when their home is sold.

What if it is left to a member of the family, I know they have to pay inheritance tax etc, but how can they put another tax on it, I suppose it will be another Stealth Tax, they’ll tax ya despit you being dead!

I like this part of the plan though

The distinction between a public and private nursing home bed is to end.

But basically will pay more if you can!