Budget 2012 Post author By Philip Lane Post date December 6, 2011 The budget documents are here. Categories In Uncategorized 39 Comments on Budget 2012 ← NY Times on Irish Austerity → Guilder reintroduced 39 replies on “Budget 2012” I’ve an untrained eye when it comes to looking at these docs. This one: “Estimates of Receipts and Expenditure for the Year ending 31st December 2012” seems to indicate Income Tax take increasing from 13,835m to 15,090m in 2012 (note 1 page 7). Was there something introduced mid-2011 (and 2012 get a full year benefit) or where’s this increase coming from? The key passage in the speech … “The marginal rate of taxation on income is now 52 per cent for PAYE workers and 55 per cent for the self-employed. The OECD have concluded that Ireland has the most progressive tax system of the EU members of its organization and Revenue records show that the top 5 per cent of income earners pay 44 per cent of income tax. When the marginal rates of tax are very high jobs are lost. Indirect taxes have a less adverse impact on employment. That is why in this Budget, indirect taxes rather than taxes on income are being increased. That does not mean that the wealthy should not carry the principal burden of tax. The minimum effective tax restriction on high earners is designed to ensure this by imposing a minimum effective income tax rate of 30 per cent for those subject to the full restriction, in addition to 4 per cent in PRSI and up to 10 per cent in the USC.” from the Drams in the Aesthetic Dail … Cicero award, hands down, to Pearse Doherty of Sinn Fein. Meanwhile Minister Noonan is quietly relieved to be nice and quiet and a good boy out of the line of fire in the Junk_Zone http://www.presseurop.eu/en/content/cartoon/1254551-crosshairs What role has the Irish Fiscal Advisory Council in respect of Budget 2012. In the UK, the Office for Budgetary Responsibility issues a statement right after the UK Chancellor’s spring and autumn statements (right after = a few minutes after the chancellor sits down after his speech). The OBR statement confirms the credibility of the economic outlook and the effect of any proposals from the Govt on the national finances. Will IFAC be doing the same? http://www.fiscalcouncil.ie/about-the-irish-fiscal-advisory-council/ All in All, as “Q” once put it, ‘The Troika will be Thrilled’. Saves the FARC the bother. ” Mr Noonan plans to appoint a group to advise him on “Nama’s strategy and its capacity to deliver on that strategy through property disposal and the ongoing management of assets”.Wonder will he appoint Morgan Kelly???? Tax relief on mortgage interest increased if you bought at the peak of the bubble (2004-08). Tax relief on rent reduced. Would it not be simpler to tax IQ? @ JF Cheers, I got a genuine belly-laugh from that. Seriously though, I have to say I was a little surprised myself. I’ve one of those mortgages and I certainly don’t need the extra relief; things like this should be much better targeted. Now I’ve a little more money each month that won’t make any material difference to me, while someone, somewhere probably has a little less which might make a huge difference to them. The budget was not radical enough. I would have cut public service pensions and salaries by 25% over two years – top end by 33%, bottom by 15% and redistributed that saving between social programmes and a cut in the marginal rate of income tax. We have to tax child benefit as income as well. @Tullmcadoo U forgot a few … Don’t forget the third tax band for those earning over €80,000 p.a., the land tax to stimulate a land market for real agricultural purposes, the capital gains tax doubled on unproductive windfalls, the wealth tax, the 50% reduction on all professional fees incurred by the state, a 100% tax on anything remotely resembling a financial derivative, the elimination of all barriers to entry to all professions, a real productive investment bank for real economy entrepreneurs, the dismantling of NAMA, firing all directors on all state boards who have been politically appointed, and the Anglo_Irish HQ to be coated in polly-shawneen and topped off with a giant Carving of Ahern, McCreevy, Harney & McDowell as a gentle reminder to future serfs of the dangers of Ideological Hubris. Unfortunately, there will be insufficient left to resurrect the PDs. On this point at least, the left, the right, and the centre might agree. DOD, Yawn. The tax system penalises those in the middle of the income spectrum. A wealth tax would yield nothing cos wealth is mobile and much of the alleged wealth has gone to money heaven. @Philip Lane I have and a quick perusal of most of the budget measures at this stage. My only conclusion is that it is best not to be a single mother or have a disability. You might as well be asked to wear a yellow star. The property relief section is designed for NAMA, so that NAMA losses will be hidden under the cover of tax reliefs. Hidden at the expense of single mothers and people with disabilities. These are shameful choices that have been made. @All This comment is probably more pertinent to the ‘Reform of public expenditure’ thread. Where is the cost benefit analysis on the Capital Gains Tax freebie just announced in the budget for commercial / non owner occupied property purchases prior to 2013. A stroke, however aspirational, that is worthy of McCreevy. A back of a fag box calculation. I don’t understand politic, I don’t understand economy but for what comes in and out of my wallet. I am a working mother loving her job and getting family income supplement for 2 children, I rent the house we live in and I am not claiming rent allowance because I consider myself well off and can manage. Some people will put me in the “poor” category but I don’t put myself there. I juggle, manage, please my kids and myself regularly, don’t own much but pay my bills and I am proud and happy. The budget 2012 doesn’t affect me much… yet, but what is affecting me is what is happening. Democracy.. Leave the people speak isn’t it? Didn’t Ireland fought for that democracy not so long ago? The people are angry, they bang drums, shout, revolts in the background of RTE news and that is totally ignored during the program. The people are angry, the ministers speak about this budget without mentioning and showing openly what is happening out there. They show lone parent complaining about price of shoes and clothing, showing us that lady, unemployed with one child can’t afford the pair of High heels tiger print stilettos. What does this message giving us? What about the students? I am sure they want to revolt.. What about disabled Young people, family of disabled? Elderly? I am sure they want to revolt… what about home owners? Small business owners? Nurses, teachers, guards, civil servant? I am sure they want to revolt. This budget is only the Beginning of what is coming. We can get used to this, no problem, we are all great at adjusting, surviving but what will it be the next budget and the one after that and the one after that? What will be left for our children? Big multi national enterprises employing them for a small wage for them to be allowed to pay land and houses which originally belong to them? We need to protect what we have left. The Celtic Tiger gave us presents, we didn’t even know him and couldn’t believe our luck but now he wants everything back with interests. Would we have refused the presents if we had known? Most of us would have not because we are greedy, egocentric and in search of power. This is what we are but we can stop that, we can help each others and protect each others. We have to do it for our pride but also and more importantly for our children pride. Our dignity is not in the job we are doing or the size of our house, car, ability to survive, our dignity is in our actions and we need to act because nothing is fair at the moment and because other fought for our right to fight and express ourselves. V for Veronique @JR, Back of the fag box: Cost of CGT freebie – probably close to zero because significant capital gains are unlikely over the period. Benefits of CGT freebie – it’s a small sweetener thrown in alongside stamp duty reductions in an attempt to get transactions moving again, and can’t be assessed in isolation from that. It’s desperately important to the country’s pretensions to financial stability to get property transactions moving so that NAMA can make progress on offloading the domestic part of its portfolio. NOONAN EXPLAINS WHY HE RESCUED NAMA http://www.irishtimes.com/newspaper/breaking/2011/1206/breaking69.html CompletE with memorable quotes like “you have to suck on it. The Yanks have shitloads of money to buy our property but I had to make sure they pay no tax…they are all Republicans? Lots of patriotic tax exiles who are prepared to give up their Irish citizenship to avoid paying 200,000 And so on And Forgive me …I forgot about”skinning the cat” Most important @Niall Dunne I think the mortgage interest relief changes should be read along with the new property tax. If and when it changes to a valuation based tax, people with larger mortgages will, in general, be paying more in property tax. @ Kevin Walsh That’s probably the case, but I do feel it’s a rather blunt mechanism. When I get my next mortgage statement and work out roughly how much this will save me over the course of a year, I’ll be donating that amount to SVDP. Fantastic budget for farmers – including both main capital tax categories. Niall Dunne Says: December 6th, 2011 at 7:32 pm Exactly. +1 Note the allocation to credit unions of €500m (250m 2011 and 250m 2012) – termed an advance. Noonan’s flippant Seanad throw away remark that about 500m to 1bn was needed but it was small beer in comparison to the banks. No mention whatsoever of the elephant in the room – mortgage arrears and measures to tackle these – CIB – MABS funding remains the same as last year – makes you wonder who is going to fund Keane’s 100 advisors. http://billhobbsie.blogspot.com/2011/12/we-need-national-debt-advice-service.html @Tull Just keeping you honest, as Ayn would put it! @Minister Brian Hayes As spotted on Vincent Browne tonite … http://www.plsteiner.com/blog/solving-hunger/ Hear you have been watching videos of Sarkozy! @Ceterisparibus NOONAN EXPLAINS WHY HE RESCUED NAMA Still obsessed with property or the value of property or better still the lack of value of property. We are still living in the era of John B Keane’s book The Field. Bemoaning the fact that people are saving and not spending instead of accepting it as a normal reaction to a declining economy and even worse a declining government that cannot be relied upon to provide the basic support that people relied on, such as pensions, jobs, education and health care. In normal circumstances in countries that do not backstop bankrupt businesses and their bond holders the government provides the jobs required to jump start the economy by funding major public works projects. Projects that are useful and not canals and walkways to nowhere. Obviously the government listens to the US policy makers who urge people to incur more debt as a solution to over indebtedness. As to the patriotic Irish evading taxes, patriotism is the first refuge of scoundrels. Adopt US tax rules, chase them down abroad, extradite them to Ireland and incarcerate them on the Blasket Islands until they cough up their taxes due. In Ireland patriotism like civilised behaviour is but a thin veneer. I could add legality is for people who do not have liquid assets. I do not see anything in the heavy weight German papers. Not even a thank you. http://diepresse.com/home/wirtschaft/international/714965/Irland-spart-wieder_38-Milliarden-allein-im-Jahr-2012?from=gl.home_wirtschaft The head line is a good one. Ireland saved again (Spart wieder). This is what the BBC has translated for Europe. Well done, simple and factual. http://www.bbc.co.uk/news/world-europe-16045457 In Les Echos the French equivalent of FT the only mention of Ireland is “Ireland is not ready to change the treaties by referendum.” @ All As i previously suggested – “Lisbon Treaty may be altered without need for referendum”. http://www.irishtimes.com/newspaper/frontpage/2011/1207/1224308686987.html Still think it would need Supreme Court sign off, and they may be hesitant if there is any ambiguity about it whatsoever. This was a god awful budget. Family (2+3) on social welfare will lose more than a family (2+3) on 150000 handicapped kids do not really need all that help, sure cut their allowance and make them work. Lazy, freeloaders! And as for single mothers! Sure the whole thing was their fault, what with them buying all that overpriced property on their credit cards! It is only right that their kids should be made to work from the age of seven. I have a chimney needs cleaning! It staggers me that a government could make these decisions and still think they are being fair. Sorry about that. rant over @veronique +1 @Shaun Byrne You do know that the people we borrow money from to keep all our public services running think all of those thoughts and worse? What exactly gives us the right to be indignant about having to cut back on money that is borrowed from other countries? The people in those countries worked hard and saved and loan us that money even though our social welfare rates and public servant salaries are far higher than theirs. The reaction to this budget tells you everything about the entitlement mentality that has developed in Ireland over the last 20 years. This is not our money to haggle over! We’re taking it from other countries. Imagine if I lend your family 10k even though your family income is only 70k. And the last time I lent you any money you splurged it on dodgy property. And you already have debts of 200k which you struggle to pay back. And the minute I give you the 10k all I hear are the aunts and uncles and sons and daughters bitching and moaning about who deserves the biggest slice of the pie and whining when I gently remind them that these loans can’t last forever and I’d like a say in how this is spent. And losing their minds when I remind them that my own family have to get by on far less. @Johnny Foreigner And the minute I give you the 10k all I hear are the aunts and uncles and sons and daughters bitching and moaning about who deserves the biggest slice of the pie and whining when I gently remind them that these loans can’t last forever and I’d like a say in how this is spent. And the minute I give you the 10k all I hear……is the sound of a till receipt in a European bank bond house withour as much a ****ing thank you. Johnny, you need to brush up on where this money is going. As deepthroat said..FOLLOW THE MONEY. Veronique +1 This Budget is About Political Choices Based on the Priorities of Class As we are forced to look at the budget over two days, a particular unnecessary cruelty, it’s worth emphasising, as those in the ULA and Sinn Fein have done, that this is a budget based on political choices. It is depressing to watch seasoned politicans like Pat Rabbitte claim pathetically that if they didn’t make the choices that they made that the EU/IMF would punish us severly. Last night on RTE’s Frontline Rabbitte claimed that if Ireland did not do what France and Germany wanted that they would forced to it anyway, citing the treatment of George Papandreou, the former PASOK Greek prime minister as evidence. Mary Lou McDonald then made the point that Sinn Fein met the Troika and ‘set out their stall’ which included a wealth tax and the closing of various tax loopholes, as well as a dedicated fiscal stimulus based on state led investment in infrastructure, education and health. She claimed that the Troika said that it doesn’t matter how you do it, as long as the numbers, in terms of deficit reduction, remains the same. The finer details of Sinn Fein’s proposal can be argued out, but its far far saner than the route being taken by the present government. It’s costed, it’s reasonable and it would work. So the political choices being made by Fine Gael/Labour are based on two simple questions: Will it allow us to cover all bank losses by placing the full responsibility for the debt on public finances? In doing so will it still be possible to protect corporate profits and the income of higher earners? http://www.irishleftreview.org/2011/12/06/budget-political-choices-based-priorities-class/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+irishleftreview%2Ffeed+%28Irish+Left+Review%29 @The Cabinet A certain ‘pause’ is welcome! Full stop would be better. Reversal of previous attack on vulnerable disability segment would be best. @Bond Eoin Bond A few around here are past masters in the art of ‘constructive ambiguity’ – and the supreme court could in for a few busy years ahead. Thus far, it retains its stature … This transcends Ireland – Democracy demands a European Wide Referendum – all citizens of all EU states – and on substantive issues related to the future of European Integration and Governance … Item #1 on the agenda is The Future Supremacy of the European Commission over Franco-German Gaullism. @Joanne O’Riordan on Joanne O’Riordan Dear Enda … ‘A cut to my entitlements is a cut to my life’ Thursday, December 08, 2011 http://www.irishexaminer.com/world/kfqlgbojmhmh/rss2/ Pearse Doherty Live at The Oireachtas The Cicero Prize reloaded … well worth the effort … Comments are closed.