HOUSEHOLDERS have now reached a point where they cannot bear more tax hikes in the Budget, experts warn.
A family with one income of €55,000 and two children is paying an extra €3,400 a year in taxes and levies since 2008.
A sixth austerity Budget next month will be too much for large numbers of people to cope with, the Irish Tax Institute said.
But next month’s Budget is expected to see the introduction of a property tax that is expected to cost a family with a €350,000 home €875 in tax in a full year. The charge is likely to be set at a rate of 0.25pc on the value of the home.
President of the tax body
Martin Phelan said more taxes would mean people will spend less, some will work less, while there will be a growth in the black economy.
“A small base of people are contributing vast amounts of revenue for the Government. It is getting to a dangerous level with fewer people paying more and more taxes with less income,” Mr Phelan said.
And an additional €2.25bn is expected in expenditure cuts. But the tax body said there should be an even greater emphasis on spending cuts, as it would be too damaging to the economy to tax income earners even more.
There is a limit to how much more can be imposed, the tax
body said. Changes to income tax, the introduction of the universal social charge, the removal of tax reliefs and child benefit cuts have meant those still in a job are paying vastly more tax since the economic downturn hit in 2008.
There are now 1.8 million income taxpayers, down 300,000 from 2007, the tax institute said.
Plans to introduce water charges and a property tax will mean there will have been 10 new taxes imposed on households in the last four years.
These include the income levy and the health levy, which became the universal social charge.
Also included are carbon taxes, the second-homes tax, the household charge, the domicile levy on high earners, the pensions levy on private sector retirement funds and the insurance levy.
Austerity has been an economic failure and a social catastrophe.
Domestic demand has collapsed. Five businesses closed down each day in 2011 – and this year’s figures are likely to be worse. 300,000 are unemployed, and many more are underemployed. Over 1.8 million people are left with less than €100 at the end of each month after paying essential bills. One in ten of us is living in food poverty. One million of our fellow citizens are living in deprivation as measured by the CSO – including over 335,000 children.
And these figures would probably be even starker were it not for emigration: in just one year – between April 2011 and April 2012 – a total of 46,500 Irish people left the country.
Behind each of these figures lie individual stories – and increasingly, those stories are of despair.
Communities throughout Ireland see the economic and social consequences of current economic policy every day. They see that austerity does not work – and they know that continuing the same policy will not produce different results.
LOCAL AUTHORITIES will in time be given powers to set their own property tax rates in order to generate funds to support provision of services in their areas, Minister for the Environment Phil Hogan has said.
The development, announced by the Minister at the publication of a programme of local government reform, would give county councillors power to set the tax at a level that meets financial needs. This was the case under the domestic rates system that was abolished in 1977.
“Property tax will become more and more the source of income for local authority services to be funded,” said Mr Hogan. “If they are raising the money locally for service provision, they will have a say in how they spend it. Each local authority can have a different level of property tax in due course. The timing of that is a matter for Government.”
The tax, expected to be levied at an initial rate of 0.25 per cent of the property value, is to be announced in the December 6th budget and is likely to come into force in the middle of next year. The details of the levy, which is to be collected by the Revenue Commissioners, are yet to be approved by Cabinet.
Mr Hogan was speaking at the publication of Putting People First, a programme of local government reform which he said represented the most radical changes to local political structures since the 19th century.
The abolition of 80 town councils, a reduction in the number of local authorities to 31, and a proposal to reduce the number of elected councillors by 42 per cent to a maximum of 950, are among the measures set out in the plan.
It indicates that the role of elected councils should be extended to cover matters such as local economic development and the support of businesses. But it also states that the power of councillors to overturn the decisions of planning officials should be removed. Many of the changes outlined in the plan are to be in place for the 2014 local elections.
LEADING ECONOMISTS were told at the weekend about a study that details a separate tax for saturated fat, added sugar and salt, and concludes that a levy on all three could generate €188 million a year for the exchequer.
Authors Maria Murray of Trinity College Dublin and Micheál Collins of the Nevin Economic Research Institute told the gathering including economists attached to government departments that the direct effect on consumers would be quite small. But it could lead suppliers to reduce fat and added sugar and salt in products.
The cash generated could be used for health promotion campaigns. The economists’ warning to Government was: “There will be no effect other than revenue unless you spend the revenue on generating change.”
The tax on saturated fat would cost consumers an average of 93 cent a week, while added sugar would add €1.10 a week to weekly shopping costs. And the levy for added salt would be a humble 15 cent a week.
A tax on saturated fat alone could generate €79.91 million, while taxing added sugar could be worth up to €95.1 million with a salt tax yielding €13.08 million. For individual consumers it would mean a 5 cent increase on a pack of butter, 3 cent on a half kilo of cheddar cheese, 3 cent on a chocolate bar and 5 cent on a two-litre bottle of cola.
Such a tax would follow the example already set by New York state, which introduced a levy on saturated fat, Ms Murray told the Dublin Economics Workshop conference in Galway. Denmark last year imposed a tax on products with more than 2.3 per cent saturated fat. Hungary has introduced a salt levy, she said.
Ibec’s Food and Drink Industry Ireland group last week spoke out against a fat tax when it met the Oireachtas health committee. The group said it was a simplistic solution that would have little impact on diet.
However, Ms Murray said Minister for Health Dr James Reilly had signalled his interest in introducing such a tax in December’s budget, since 61 per cent of Irish adults are overweight or obese and 20 per cent of children likewise. Some 2,000 premature deaths occur annually, costing the State €4 billion a year. Figures from 2003 show in-patient hospital costs for obesity-related illnesses were €30 million.
It would not be a complicated tax, Mr Collins assured a Department of the Taoiseach representative who expressed concern about the burden applying the levy would impose on business: “Either you have saturated fat or you don’t. If you do it is taxed at one level or another level.”
Workers and Unemployed Action Group (South Tipperary) at its Annual General Meeting has unanimously decided to withdraw from the United Left Alliance. WUAG will continue to campaign against government austerity, cuts in public services , against the household charge/property tax and for fair taxation including a wealth tax and higher taxes on the incomes of the super-rich.
Wallace seems to be the catalyst that’s splitting the ULA apart. What dim wits they were to take him on board in the first place.
Will the ULA now just fall apart and everyone go their separate ways.
Another dream bites the dust.
THE tax take for the nine months ended September was €26.1bn, €385m ahead of expectations, new Exchequer Return figures show.
The exchequer deficit was just over €11bn, compared with €20.6bn last year, due mainly to the settlement of the IBRC promissory note payment.
And the Government has warned that pressure points remain, particularly in the departments of health and social protection.
“Although challenging targets still remain for the last quarter, I am confident that the overall tax revenue target for 2012 can be achieved,” Reform Minister Brendan Howlin said.
He added that departmental expenditure remains less than 1pc above expectations “with pressures on health and social protection areas.”
The figures also show that the Government is set to meet budget targets set out by the EU/IMF/ECB troika.
He added that the return by the National Treasury Management Agency, which manages the country’s debt, to the bond markets this year was proof that action being taken by the Government to fix Ireland’s finances is being recognised by investors.
All told, Mr. Cowen received €310,469 in 2011 before tax. He did not make any voluntary contribution to the State. The documents indicate.
Special Needs Assistant
Every time the government says ‘we need to pay the unsecured bondholders; A’ Special Needs Assistant dies inside.
New Movie channel
Three hundred thousand homes to face blank TVs as switchover to the digital system looms.
Solution- bring back Terry Wogans blankety blank.
Leo Varadkar estimates this will bring in €15m per annum to local business.
Funding not yet allocated, no route yet decided. How can, Mr. Varadkar, know how much money will be generated from a project that is still in its infancy and may well not even happen?
Mr. Varadkar is currently considering grants for kite flying.
The Fianna Fail Think In
Top of the agenda was the search for brains – this proved to be a fruitless exercise.
The Leader Mr. Martin said his party would oppose the proposed Government property tax. Now Micheál rattle the old brain cells if you can find them and youwill recall your lot proposed this very same tax two years ago.
Perhaps just maybe we are seeing the death throes of this shambolic lot.
Use whatever means necessary to get the money says Hogan as he stands four square with councils over student grants
Those who have not paid their household charges should not receive student grants.
They are asking people, and they are putting in place plans to get in the remaining monies that are owed to them. That’s what any businesses would do” Says Hogan.
Earlier Education Minister Ruairí Quinn added his support to the councils.
If this was, a business charges the banks would be, broke, end of story, and the people would not be paying for government and banker’s mistakes.
The legality of what the councils are doing is questionable and may not stand up if questioned before the courts.
USI president John Logue said: “The action taken by Clare County Council must be condemned in the strongest terms. This is an unprecedented move. Never have I heard of a grant being refused until proof of payment is offered for a completely unrelated tax owed by another person.
“Students are being punished for the decisions of their parents and their education is being put at risk.”
Pamela Rochford, a spokesperson for the Clare branch of the Campaign against Household and Water Taxes, accused the council of using scare tactics with the move.
MIDDLE-INCOME families who have been hit hardest by austerity and stealth taxes cannot take another “hammering” in the Budget, senior Fine Gael Minister Leo Varadkar has said in what will be seen as a blunt warning to Labour that the ‘coping classes’ have had enough hardship.
The Transport Minister has warned that a property tax is just about the limit of extra taxation that ordinary working people can take in the December Budget and that raising extra revenue from middle-class voters — such as taxing child benefit — was not sustainable.
He also indicated strongly that the new property tax would have to include some measures which would stop the charge becoming essentially an urban tax.
Minister of State for Finance Brian Hayes said yesterday lots of elderly people told him they were “well off” because they did not have mortgages. “I think we need to realize that the one group of people in this country who have come through this crash and still have their incomes intact are pensioners,” he said.
“But it seems to me that the Irish political system will never countenance cutbacks on the elderly. My view is that all this needs to be on the table,” he said.
Mr. Hayes said pensioners were people with “common sense and judgment” who would understand the need to look at the State’s contribution to them. This would not be done in “some kind of hair-shirt way” but rather in a “sensible” manner.
What the minister appears to be saying is old people are on the pigs back as they have no mortgages. We must tax them severely for this crime. Why should they have a right to a happy retirement when the rest of the country is suffering? They have no right to a jolly old age. Look at me even I am suffering due to the public scrutiny of travel expenses. This you realize has a severe impact on my take-home pay.
One wonders, whether the legions of grey matter will take to the streets.