Budget2013.org: Making the Right Choices

The Sinn Féin alternative – my first post contains personal notes and initial responses from my participation in the South East Radio discussion today [see below the break here]. More updates, information and analysis to follow there.

South East Radio discussion notes, from Sinn Fein Loch Garman chairman, on the 2013 budget:

* effect on Average household:

– minus €790/year. Equivalent to:

= health insurance for 2 children;

= 6 weeks of food shopping;

[ref: Pope, C. 5th/December 2012, Irish Times, p.2, “Good old days of giveaway budgets a distant memory”]

* PRSI:

– covers more, but offers less.

– E.g. Reducing Job Seekers’ Allowance from 12-9 months, costs average of €2,000 to unemployed first year;

* Property Tax:

– in other words – “house/home tax”, not based on ability to pay;

– makes no distinction between reclaiming Socially Added Value on “raw” site value (e.g. Public infrastructure, services), separate from socially-beneficial owner improvements (buildings etc.);

– should be e.g. aggregate Wealth Tax over €1million, which would be based on ability to pay;

– SF Wealth Tax would exclude productive assets (e.g. working farmland, business assets), allow 20% exemption on house value over €1million, make allowance for liabilities (mortgages);

– addition of higher band rate by government, will only save average household only €1 a week in property tax! (About 1/2 litre of petrol…) [ref: Pope, C. 5th/December 2012];

– Irish Credit Unions estimate considerable number of households have €100 disposable income after paying essentials each month as it is;

* Tax Compliance:

– excluding Household Charges: hiring 125 extra people for Revenue Commissioners, @cost of €6million, would net about €100million extra (& ease economic pressure on legitimate traders…);

– public service hiring embargo/cuts means state “saves” €6million – at potential cost of €100million… (How many household charges is that equivalent to…?)

* Child Allowance reduction /€10:

– “but additional support for low income”… However: what is priority? Enabling people to get back to work, and be self-sustaining – or using them as national debt-servicing machines? Won’t this increase the likelihood of more people, under more pressure, flooding further into the social welfare system, as their supports get removed elsewhere?

– in terms of supporting those on low income: What about removing minimum-wage earners from income tax? Again: is the priority to squeeze as much out of as many people, or to get people back to work, back to spending, back to a productive economy?

* Prescription charges:

– an increase of a euro adds up quickly when you are on a half-dozen tablets – more likelier the older one gets, for example;

– why not target prescription drugs, the use of generics, and state bargaining power as a way to save a lot of money – without pinching those who need medicine the most?

* Commercial Property:

– a way to stimulate and incentivise high street and main street business – without drawing on the exchequer – would be to follow through on the promise to tackle our Medieval Upwards Only Rent Review regime; an international embarassment, and parasitic drain on the real economy;

* Small & Medium Enterprise support:

– The effective tax rate for many multinational corporations operating out of Ireland, is between 2-6% – in direct contrast to the actual 12.5% most Irish SMEs pay

– level the playing field: let 12.5% be 12.5% for everyone;

– Enron played a similar game in the US – using an engineered “royalty payment” and subsidiary company pyramid, to game the tax system;

* “Ireland has a very progressive tax system”:

– now back up that horse there for a moment, Mr. Noonan; Our own Dept. of Finance says that the average effective tax rate for:

– €100K is 20%;

– €150K is 24%;

– €1million is 26%;

This is not “highly progressive”…

* a response to the now perennial distraction of local charges in the 6-counties:

– it is one of the very few fiscal powers actually available there; The true contradiction is that SF has been fighting for repatriation of more fiscal powers to the North as a result, while successive governments in the 26 have been scrambling to bargain them away (and cheaply!);

– it is one charge – and one charge only;

– it is far more efficiently and equitably implemented there, than the ever-increasing legion of extra charges, levies, and hodge-podge of silent taxes being forced through in this state (in the 6 counties, you’re school doesn’t ask for voluntary levies, you don’t have to fundraise for the local health centre, the council empties your septic tank, etc. etc.)

* “the economy is improving”:

– it shed jobs in the third quarter, again;

– the figures and calculations this is based on, are just as realistic as the figures and calculations that predicted much the same thing for… How long now? (remember the “green shoots”? “turning a corner”?)

One thumb up for:

– not raising petrol & diesel excise;

Two thumbs up (provisionally) for:

– rebate on hauliers’ diesel (a Sinn Fein idea from our jobs document last month);

– Energy efficiency, retrofitting, & upgrading via incentivised investment (a Sinn Fein idea from our jobs document – you’re welcome!)

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