The Finance Bill running to nearly 300 pages is out. There’s the odd sliver of good news – the 5 percent levy on the sheltered income from legacy property tax relief for those earning over €100,000, for instance. Otherwise, it’s a pretty grim affair, putting into effect a regressive budget.
But there are little stories that inform the broad narrative set down by the Government. Let’s run through four of them.
1. Special Assignee Relief Programme (SARP): this is the tax relief for foreign employees coming into Ireland. This is being sold as an incentive to bring in power-executives with power-projects that can get people back to work; however, this will apply to any employee earning over €75,000. Will this have any positive impact?
SARP is an extension of a programme that already exists (a limited programme was established in 2008 and was extended in 2010). Before launching this current relief, the Department of Finance could have evaluated the results of the programme to date. Did it have any jobs effect that would not have happened if the programme didn’t exist? How much did it cost? What effect did it have on the labour market?
But Governments don’t evaluate their programmes so we don’t know and we won’t know what the impact will be. Sometimes these tax incentives are just given out to make it look like the Government is doing something about something.
Still, you might be interested to know that the State will not only be subsidising foreign employees’ salary (30% between €75,000 and €500,000), the state will also allow the employee to write off the fees of sending their children to private schools – up to €5,000. So we subsidise private fee-paying schools and now we subsidise the actual fees. Hmm.
2. While the Bill closes some minor loopholes in the R&D regime, companies will be allowed to assign their 10 percent R&D tax credit to employees who can use it to reduce their PAYE tax liability. How this incentivises job creation is beyond me. But it sets up is a situation where key staff (executives, senior professionals, etc.) can now get a tax-subsidised bonus. Hmm.
3. Mortgage interest relief is being increased for people who bought a house for the first-time between 2004 and 2008. This will be given to all households regardless of their income – people who are high earners get the relief despite the fact they have no problems paying their mortgage. Meanwhile, those who are really struggling with their bills will not benefit at all if their income is below the tax threshold or are unemployed. Hmm.
So we have three programmes that distribute money to those on high incomes without any assessment of their impact, positive or negative. Just shovel out the dosh to those with dosh (and they call us progressives ‘spendthrifts’).
But take a look at this section in the Finance Bill that hasn’t got much attention.
4. Taxing Illness Benefit and Occupational Injury Benefit: currently, the first 36 days of illness and injury benefit you receive from the Department of Social Protection is exempt from taxation. Now that exemption is being removed. So when you get sick or injured on the job, suffering from a fall in income and increased costs arising from the illness or injury, you will now find the social welfare benefit you receive will be taxed.
Sometimes words just fail me.
Why does the left love to hate on multi-nationals?
Is it the well-paid, well-educated, non-unionized workforce who actually add real value as opposed to rent-seeking, that scares ye so much?
Do you realize just how screwed we'd be right now if it wasn't for the bouyancy in the multi-national sector?
That bouyancy has been nurtured and maintained by the application of targetted incentives.
But of course, you'd rather spend the money on social welfare and yet more under-employed public servants.
Posted by: tellsitlikeitis | February 16, 2012 at 03:03 PM
IN DIESEM Auftrieb wurde gehegt und gepflegt durch die Anwendung von gezielten Anreizen.
Posted by: abercrombie fitch madrid | May 25, 2012 at 10:00 AM