The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[muppet]

Irish Times Breaking news

Government to raise taxes in emergency Budget move
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    * Exchequer returns show tax revenues under pressure | 03/03/2009

MARK HENNESSY, Political Correspondent and KILIAN DOYLE

Extra taxation is to be imposed in an emergency Budget from the Government by the end of March, following the publication of disastrous tax revenues.

Mr Cowen said the latest Exchequer figures, which show revenue for the first two months of 2009 at €5.7 billion, compared to €7.5 billion for the same period last year, left the country in a "very difficult situation".

The Cabinet today decided that it will action emergency by the end of this month to ensure that its €18 billion borrowing target will not be over-shot.

The February tax figures were "disappointing", the Taoiseach told Fine Gael leader, Enda Kenny during Leaders' Questions in the Dáil. It is "important for the country's credibility" that the Government stick to its borrowing targets for the year, he told Mr Kenny.

Questioned by Labour leader, Eamon Gilmore, Mr Cowen admitted that the actions needed by the end of the month would include extra taxes. "Whatever legislative arrangements are necessary can be made later," said Mr Cowen, adding that the Government will publish a three-year plan shortly.

"We will take whatever steps are necessary to ensure that the framework that we set for ourselves, which is for a 9.5 per cent Government deficit for 2009 would be adhered to," Mr Cowen said. "It's important in terms of the credibility of the country that we do that."

"We will in the coming weeks, before the end of this month, come forward with whatever measures are necessary to do so, either in terms of expenditure savings and/or tax raising".

In December, the Government laid out a five-year strategy to the European Commission to bring Irish finances back under control by 2013.

Mr Kenny said businesses and members of the public were suffering a "crisis of confidence" and called for immediate action. "The problem across country is that nobody can now plan for their future," he said.

Mr Kenny asked the Taoiseach to outline what decisions were taken by the Cabinet earlier today to address the rising Exchequer deficit. "It's time to face the reality ... that our public finances are under extreme pressure." He called for a new Budget that is "fair and comprehensive" to restore people's confidence to invest or spend.

[muppet]

You're not that keen on the auld property tax then Muppet?

The posters on P.ie are predicting a .75% to 1% property tax announced before the end of the month. That would mean a 3 bed semi in Dublin  worth around €300,000 will cost €3000 p/a.

They are talking about a new income tax rates of 25% and 48% with the higher band being lowered to the low €30K range.

Water charges and increased fuel excise all on the way. Enjoy March.

[armaghniac]

The posters on P.ie are predicting a .75% to 1% property tax announced before the end of the month. That would mean a 3 bed semi in Dublin  worth around €300,000 will cost €3000 p/a.

They are talking about a new income tax rates of 25% and 48% with the higher band being lowered to the low €30K range.

Water charges and increased fuel excise all on the way. Enjoy March.

Water OK, income tax as expected, although the lower band will have to cut in earlier too. I think they will be careful with the fuel until Gordon Brown sticks a few pence on his. Property tax pretty savage as proposed there and a % of value in a declining market is a hard one to administer. Better to just tax €2 per sq metre. Some of the usual suspects that have been around for years will have to be grasped, like taxing children's allowance

[Rossfan]

Of course all the rot started by letting house prices run totally amok ...but sure as long as the Builder cnuts were coining it(and no doubt paying the usual cut to the Builders Party ) all was well. Then to keep the pot boiling over Tax incentives were strewn like  confetti to keep the fools(i.e. us) buying overpriced houses. Of course we needed higher wages to pay for them.
There was no effort made to develop any kind of productive economy ..that was left to the transient multi nationals while farming became a EU social welfare thing  and of course we priced ourselves out of the tourism market.
in 1993 an average house(for ordinary people without pretensions) cost about twice an average annual gross middle income.
In 2006 it cost about 7 times the average middle income.
Now loads of people will be unable to undertake  discretionary spending as all their money will be going on oversized mortgages.
So we're basically looking at a stagnant economy unless we start producing something we can sell overseas to get money and jobs circulating again.

[orangeman]

Of course all the rot started by letting house prices run totally amok ...but sure as long as the Builder cnuts were coining it(and no doubt paying the usual cut to the Builders Party ) all was well. Then to keep the pot boiling over Tax incentives were strewn like  confetti to keep the fools(i.e. us) buying overpriced houses. Of course we needed higher wages to pay for them.
There was no effort made to develop any kind of productive economy ..that was left to the transient multi nationals while farming became a EU social welfare thing  and of course we priced ourselves out of the tourism market.
in 1993 an average house(for ordinary people without pretensions) cost about twice an average annual gross middle income.
In 2006 it cost about 7 times the average middle income.
Now loads of people will be unable to undertake  discretionary spending as all their money will be going on oversized mortgages.
So we're basically looking at a stagnant economy unless we start producing something we can sell overseas to get money and jobs circulating again.

Not going to be easy to do.

[muppet]

The real problem is that most of this catastrophe in the national finances has been predicted a long time ago. The Government only woke up to it today. How does that happen? How can they be that incompetent?

Is it that they are incapable of seeing beyond the advice of Public Servants who have a slight vested interest in public expenditure?

None of the measures mentioned in the posts above mention cut backs in spending.

Where is the scrapping of the Government jet for example?

[Lecale2]

The dogs in the streets knew an emergency budget would be required but Lenihan & Cowan remained in denial.

I have written to Mr Cowan along the following lines:

Dear Teashoch

I am not a crank so please consider my suggestions carefully.

The Government and TDs need to should leadership in times of crisis. Whistling and pretending the bogey man isn't there won't work. Face up to the scale of the problem. Tell the public honestly how bad it is. Then explain how you are going to put things right over the next couple of year.

You first have to forget about winning the next election. You are fecked and have no chance. Do what's right for the good of the Nation for once and forget about the political consequences. There'll alway be a chance to get back in when that tit Kenny fecks things up again.

When you're in a hole you have to stop digging. You and your colleague should stop first. Here's my proposals:

1. Cut in Ministers and TDs salaries of 33%. All allowances frozen. Put the proposals on the table and dare the opposition to oppose them.

2. We need a huge increase in the numbers paying income tax. Reduce the lower limit to bring thousands more into the tax loop. Keep the Unions happy by introducting a new high rate of 65% for the top 1% of tax payers. It won't raise much because most of them will piss off abroad but it will play well with the working man.

3. Freeze all public sector recruitment.

4. Freeze public sector pay and welfare payments.

5. Tax all luxuries that you can't buy in the north, for examples second homes.

6. Increase motor tax on luxury models.

7. Increase fuel duty so that it's on a par with the north.

8. Cut the tax on a pint of porter. This will please the working man and get him on your side. 25c a pint will probably be enough.

9. End the smoking ban in pubs. In a time of crisis the plain people of Ireland want to be able to have a smoke the the local to discuss the issues.

10. Impose spending Cuts on all Departments and agencies of 10%. Force the civil servants to earn their keep by coming up with proposals that maintain services at a lower cost.

That's my advice Mr Cowan. Consider it carefully.

Lecale2

[Rossfan]

But we have to start being productive again and forget about fcukin property and other useless(GNP wise) nonsense like "Financial Services" a.k.a havens for dodgy foreign money.
The Government needs to recover some of  the tax money that's being lost in Section 23 type things . Could be done by either giving  all the allowances at 20% Tax relief or else halve the amount allowable and/or spread it out over double the time.
The money saved could be used to assist productive companies with low tax rates and/or no Employers PRSI or the like.
But it's hard to see any original ideas coming from Biffo/Lenihan/Coughlan(FFS)/Harney/Dick Roche/Cullen or the rest so we may suffer on.

[Rossfan]

The dogs in the streets knew an emergency budget would be required but Lenihan & Cowan remained in denial.

3. Freeze all public sector recruitment.

4. Freeze public sector pay and welfare payments.

Both already done plus levies on wages.

[armaghniac]

So we're basically looking at a stagnant economy unless we start producing something we can sell overseas to get money and jobs circulating again.

While we have messed up big ourselves, the rest of world is currently also in poo, so trading our way out is not possible for a while. Now the whole world will not remain depressed for too long, unless nothing has been learned since the 1930s, so when it begins to lift we will get some stimulus from outside. Redirecting tax reliefs from property to something productive would be the kind of thing needed to prepare to take advantage of this uplift when it comes.  

[muppet]

I agree with the area of tax relief having to be looked at. Some reliefs are probably necessary to stimulate growth but we all know of waste in this area. Mortgage relief on 2nd, 3rd properties should be looked at but also section 23 and Hotel reliefs etc.

Scrapping car tax and putting it on fuel instead has a carbon benefit as well as getting rid of the need to administer car tax (which in fairness has improved in recent year).

We have a Dept of Health and a HSE which appear to do the same thing. Scap one of them.

Bye bye Government Jet and abusing the Aer Corps by using their aircraft for ministerial trips. Aer Arann, Ryanair & Aer Lingus from now on. The ministerial car needs to be looked at, certainly needed for a few but not for all.

Income is down 25%. Spending will have to fall by about the same. They can't keep going to the ever reducing amount of PAYE workers still in employment to raise even more money. That is the economy's equivalent of a spiral dive.

[armaghniac]

Scrapping car tax and putting it on fuel instead has a carbon benefit

Iit also makes people in Ballybinaby very wealthy. This is a complete non-runner.

Income is down 25%. Spending will have to fall by about the same.

Spending cannot fall by 25% at time when more people are claiming dole etc. The economy has only fallen by 6% or so, yet tax has fallen 4 times as much, indicating that people (as a whole) are paying less tax because the tax structure is poor.

[muppet]

Scrapping car tax and putting it on fuel instead has a carbon benefit

Iit also makes people in Ballybinaby very wealthy. This is a complete non-runner.

What are you on about? You need to think country rather than your local fuel smuggler.

Income is down 25%. Spending will have to fall by about the same.

Spending cannot fall by 25% at time when more people are claiming dole etc. The economy has only fallen by 6% or so, yet tax has fallen 4 times as much, indicating that people (as a whole) are paying less tax because the tax structure is poor.
[/quote][/quote]

Income tax has fallen less than 6% does that mean it shouldn't be touched?

The Japanese economy contracted by 12% in the last Q. The US economy contracted by 6% in the last Q. Do we wait to see what it will be for us this year and if we get it wrong we say the tax structure is poor? Come to think of it are you in the Government?

Public spending is too high for our economy. It has been obvious for years but with the false economy that was Stamp Duty raising extra taxes and the Government buying votes nothing was done about it. Now you blame the tax stucture instead of dealing with it.

[armaghniac]

What are you on about? You need to think country rather than your local fuel smuggler.

Quite simply if fuel is made more expensive than in the North there will be huge change in volume sold, largely negating the revenue advantage gained.

Public spending is too high for our economy

Public spending is not particularly high in Ireland relative to other developed economies. In some areas it is high, in others it is not. Now the economy was inflated and will decrease in size and so should the public sector, but the public proportion of the economy always tends to rise in recessions.

[muppet]

What are you on about? You need to think country rather than your local fuel smuggler.

Quite simply if fuel is made more expensive than in the North there will be huge change in volume sold, largely negating the revenue advantage gained.

And what about closing every car tax office?

Public spending is too high for our economy

Public spending is not particularly high in Ireland relative to other developed economies. In some areas it is high, in others it is not. Now the economy was inflated and will decrease in size and so should the public sector, but the public proportion of the economy always tends to rise in recessions.

[/quote]

That is exactly what I was saying.