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February 12, 2008



Michael, I'm not sure I buy into this. Budgeting for labour on a job one allows 12% on top of wages for PRSI, yes I ignore the cut off, and 8% for holiday pay. So let's say 20% in round terms on top of what you pay the guys and girls. You are suggesting we should bring up that sum to 32%. So for every hundred euro I allot in gross pay I shovel the goverment thirty two. Cost of paying you a ton is 132 to me. (ignoring any pension contibution for the time being and assuming I am a raving Murphy like swine who thinks you should buy your own pension.) Also ignoring the cost of insuring you for employers liability - about 1.5 to 2% of payroll.

I think this means I do not want to take on another worker. Which is why France has a higher uneployemnet rate. Sweden has about the same as us because their workforce seems to be bettter educated. Also Swedish people believe their government works. We don't, as a troll across opinion in any group anywhere in this land will result in a stream of abuse for a government of any kind.
Also it is not transparent, tax should be seen, so we, as voters, can see what we are paying and see results. It tees me off that most people have no idea the amount we pay in tax once we have got the money home and then pay out for a pint, a tin of paint, or a pair of the kids shoes, unless of course they stay under the size 5 of the VAT excemption. VAT hits the badly paid the most.

We need to spend the money on the things you describe but why not a straight forward raising of corporation tax by a point or two


Thanks Kevan for your comment. I won't get dogmatic on this issue. If we need to raise monies for services and living standard improvements, it's not terribly relevant what that source is as long as it's progressive and efficient. We could as easily increase the corporate tax rate. But as I warned in a prvious post - - this could damage our ability to maintain foreign investment which unfortunately we are addicted to (and with the best will in the world we won't be able to resolve for some time).

I posed the Employers PRSI increase because (a) its so low relative to other EU countries, and (b) it wouldn't affect foregin investment which is capital intensive. I do not doubt that it could cause problems in certain labour-intensive sectors but it could be phased in over a considerable period while addressing the underlying productivity problems in those sectors (and hoping the upward pressure on wages owing to high living costs abates somewhat). We could even explore differential Employers PRSI for small businesses (which already exists) or possible different sectors.

In any event, you cite Sweden. The latest figure I have for Sweden (2005) is that employers' payroll tax is 32% - not counting holiday pay and other payroll liabilities.

And yes VAT is a problem tax but, again, on my post re: condoms, I suggested there are pragmatic problems with reducing our high VAT rates.

All told, there are no easy answers and I'm not trying to suggest there is one. We need more economic and social investment, we need more social protection, we need more redistribution. That means we need more money. All ideas are welcomed.

Anyone for a property tax?

Fergus O'Rourke

I missed the bit where you explained how government-provided child care would be cheaper.

I am for a property tax.


Fergus, I am assuming that, like the practice on the continent, were childcare facilities offered as part of public service programme, that user fees would be subsidised. It is not surprising that childcare here is one of the most expensive in the EU - it relies to a large extent on private sector players (or community groups that need to at least break even). You could argue that that would be more expensive - but not at the point of use.

As for property tax - you must be a brave and relatively lonely soul. I take it you're not going to stand for office anytime soon on that platform. However, we must go where progressive politics leads - and I'll try to get to a post on that subject soon (hint: I kinda, sorta agree with you but . . . ssshhhhh).

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