Minimum wage should be taxed: IBEC

[antiestablishmentarian]

In yet another coup for their Public Relations department, IBEC Director-General Danny McCoy has come out and said that minimum wage workers need their wages to be taxed as
"The entire labour force has to make a contribution to this," Mr McCoy said.

"We cannot afford to leave the (tax) base as narrow as it has been hitherto.". This is yet another indication that the gombeen capitalist class of this country see the crisis as an opportunity to undermine pay and conditions to increase their profit margins.

http://www.independent.ie/national-news/tax-minimum-wage-workers-ibec-2365698.html

[Aspro]

When it comes to exploitative capitalist s.hitehawks, he's the real McCoy.

[Tony1975]

He's right though.
The tax base is too narrow. Only half the workers in this country are paying income tax. Everyone with a full time job should be contributing income tax.
People are always moaning about how the FF/PD coalition sank this country - and it did. However, if it is suggested that some of the mistakes made by that government are undone, then the same people are entirely against it.
Everyone is going to have to cough up in the next budget. Everyone.

[Captain Con O'Sullivan]

Only if there is a windfall tax on higher earners. And registered non-domiciled who are paid by companies based in Ireland. Bet they'd scream blue murder at any suggestion of that happening.

[C. Flower]

How many people on the minimum wage have any spare cash?

The money they do have all recirculates in the local economy and helps to keep other people employed. They pay the highest indirect taxation in the EU e.g. VAT and they get pretty poor services.

It's hard to see that taking money out of their pockets and putting it into the hands of the Department of Finance, known loons, is going to help much.

[Baron von Biffo]

IBEC and ISME seem to be in permanent competition for the Mad as a wet Hen Award. Economic activity is reduced as people save more or pay down debt but our halfwit business leaders want to reduce the income of those who have to spend every penny they have.

Is it any wonder we're so dependant on FDI when our local business geniuses have as a priority the beggaring of their customers?

[Andrew49]

He's right though.
The tax base is too narrow. Only half the workers in this country are paying income tax. Everyone with a full time job should be contributing income tax.
People are always moaning about how the FF/PD coalition sank this country - and it did. However, if it is suggested that some of the mistakes made by that government are undone, then the same people are entirely against it.
Everyone is going to have to cough up in the next budget. Everyone.

Not everyone:

Ireland has one of the lowest tax takes – as a percentage of gross domestic product (GDP) in the EU. In 2007 our tax take was 32.5 per cent of GDP, as compared with an EU average of 40.9 per cent. Only Latvia, Lithuania, Romania and Slovakia were lower than us. Denmark had a tax take of 49.5 per cent, Sweden 48.9, Belgium 46.1, France, Italy 43.3 and Germany 40.8. Even with the levies, our tax take now would be among the lowest in Europe. (Data from Eurostat.)

75 per cent of all public servants earn €50,000 or less. Since these income figures come from the Revenue Commissioners and apply to total earnings, they include all allowances and bonuses.

6 per cent of all earners, get 28 per cent of all income.

Those who earn less than €30,000, who comprise 46 per cent of all earners, get on average less than €15,000 a year and they take just 15 per cent of total income. So 6 per cent of all earners get almost twice the income share as 46 per cent of all earners. (All this basic data on income and tax is available from the Revenue Commissioners.

The 168,627 earners getting more than €100,000 per year got a total income in 2009, according to the Revenue Commissioners, of €32.3 billion. This works out at an average income of €189,770 per year. They are projected to pay a total of €8.7 billion in income tax, which is just 27 per cent of their income.

Assuming that these top earners (those earning over €100,000) pay the levies that were announced for 2010, they will pay a further 6 per cent of their income in tax. This will bring their total income tax and levy to 33 per cent of their income.

http://www.youtube.com/watch?v=_JRxWuUUq6g

[Captain Con O'Sullivan]

They are like some offshoot of Scientology. Their perfect situation is a monopoly for each of their members in relevant sectors, no wage costs at all (ie slavery) and zero taxes for business.

Which would make them entirely useless to the country which means they could be shot and used for fertiliser.

Its about time IBEC were asked some questions about their membership and how many are registered for tax in Ireland. How many of their member companies actually contribute any corporation tax at all because of accountancy arrangements.

And finally they should be asked why they consider themselves wise enough to call for anything considering they appear to know nothing about the devastation up and down the country caused by the Irish version of thatcherism.

[Fing Fers]

Aint it amazing how all these geniusus have suddenly crept out of the wood work over the last few months?

[Captain Con O'Sullivan]

Not everyone:

Ireland has one of the lowest tax takes – as a percentage of gross domestic product (GDP) in the EU. In 2007 our tax take was 32.5 per cent of GDP, as compared with an EU average of 40.9 per cent. Only Latvia, Lithuania, Romania and Slovakia were lower than us. Denmark had a tax take of 49.5 per cent, Sweden 48.9, Belgium 46.1, France, Italy 43.3 and Germany 40.8. Even with the levies, our tax take now would be among the lowest in Europe. (Data from Eurostat.)

75 per cent of all public servants earn €50,000 or less. Since these income figures come from the Revenue Commissioners and apply to total earnings, they include all allowances and bonuses.

6 per cent of all earners, get 28 per cent of all income.

Those who earn less than €30,000, who comprise 46 per cent of all earners, get on average less than €15,000 a year and they take just 15 per cent of total income. So 6 per cent of all earners get almost twice the income share as 46 per cent of all earners. (All this basic data on income and tax is available from the Revenue Commissioners.

The 168,627 earners getting more than €100,000 per year got a total income in 2009, according to the Revenue Commissioners, of €32.3 billion. This works out at an average income of €189,770 per year. They are projected to pay a total of €8.7 billion in income tax, which is just 27 per cent of their income.
Assuming that these top earners (those earning over €100,000) pay the levies that were announced for 2010, they will pay a further 6 per cent of their income in tax. This will bring their total income tax and levy to 33 per cent of their income.

http://www.youtube.com/watch?v=_JRxWuUUq6g

Definitely worth highlighting.

[Griska]

While €1bn will be taken from the capital programme, the lobby group said 70pc of the remaining €2bn should come from slashing expenditure.

And therefore, don't mess with our taxes. Just the people on minimum wage.

[Andrew49]

IBEC Director-General Danny McCoy says: The entire labour force has to make a contribution to this. We cannot afford to leave the (tax) base as narrow as it has been hitherto.

He neatly sidesteps the fact that 168,627 people in this country have a salary of €519.91 per day and the tax take on that is in the order of 33%.

And it was in June 2009 he said:
A flexible labour force and agile policy have been key elements in our recent economic successes. In the same way they are now both essential ingredients if the economy is to emerge from the current crisis.

Flexible! Agile! Are they codewords for 'light touch regulation' ?

[Kid Ryder]

IBEC say tax the minimum wage. More than a bit rich considering that all corporate consumption is VAT-free, and profit gets hit only at a rate of 12.5%. Motes and beams, motes and beams...

[Andrew49]

IBEC say tax the minimum wage. More than a bit rich considering that all corporate consumption is VAT-free, and profit gets hit only at a rate of 12.5%. Motes and beams, motes and beams...

It's all arse-gravy from IBEC.

From TASC: Facts, fiction and flights of fancy (http://www.progressive-economy.ie/2010/07/minimum-wage-facts-fiction-and-flights.html)
The minimum wage rate is €8.65 per hour and it has been frozen since 2007. The introduction of the two per cent income levy in the 2009 supplementary budget resulted in an effective cut to the minimum wage reducing it to €8.48, because if your income is greater than the minimum threshold of €15,028 per year or €289 per week, you pay the levy on the full amount of your income.

Ireland has one of the lowest levels of employers’ social protection contribution in the OECD. The Irish rate (10.8 per cent) is significantly lower than the OECD average (15.2 per cent) and the euro area average (27 per cent), which reduces the total cost of employing workers in Ireland. The hospitality sector is the largest employer of low wage workers and labour costs in Ireland in this sector are the third lowest in the EU 15. Only Greece and Portugal had lower costs per employee than Ireland.

If the minimum wage is causing serious problems for businesses, surely it would be highlighted in any analysis of competition?

In July this year the National Competitiveness Council published its annual report on competitiveness for 2010, and it demonstrates that the minimum wage is not a factor impacting on business’s capacity to survive the current challenging trading environment. They found that Ireland’s cost competitiveness has improved considerably for a range of key business inputs such as energy, property and a number of business services. However, the areas where key inputs in Ireland remain relatively expensive include broadband, waste disposal and legal fees. There is no mention of the minimum wage being prohibitive for business ... and in fact the report found that
“Irish salary levels are broadly in line with the euro area average across the benchmarked occupations”

- - - - - -

So why is Danny Boy squirting out his bile against low-waged workers? Is he trying to scapegoat the working poor and the poor for the difficulties in the State's finances .... bizarre really considering the amount of finance the State has thrown at TOXIC PRIVATE BANKS - with no hope of any return.

[Tony1975]

IBEC say tax the minimum wage. More than a bit rich considering that all corporate consumption is VAT-free,

That's not true. Only a small percentage of companies are VAT exempt.


and profit gets hit only at a rate of 12.5%.

Which is one of the few reasons many foreign companies are here at all, and not paying tax on their profits, and creating employment, some place else. It's certainly not our excellent infrastructure and our cheap workforce keeping them here.

[Seán Ryan]

This is all very easy to fix.

Raise the minimum wage and tax it so that the raise disappears. And declare IBEC an unlawful organisation. Their interests are not geared towards the betterment of the country and their every syllable should not be quoted as if they were anything other than a shower of self aggrandising, ignorance promoting b@stards.

My two cents...

[Kid Ryder]

That's not true. Only a small percentage of companies are VAT exempt.

Most if not all are if the consumption relates to ordinary business activities, and if already paid, can be claimed back. You and I pay VAT on the lunch we need in order to function at work, and no chance of that being reimbursed in our pay packets. Corporate personhood - it's a gas!


Which is one of the few reasons many foreign companies are here at all, and not paying tax on their profits, and creating employment, some place else. It's certainly not our excellent infrastructure and our cheap workforce keeping them here.

I see FDI as an Oireland Inc. ruling class cargo cult. It's better for them than being made by circumstances to have to design and stick to demanding but realistic long-range economic planning and development. Having the Lenihans, Cowens, Haugheys, Brutons and so on of our glorious small open economy actually think while ruling is just far too much of a burden on the poor lambs. It's simpler by far and less electorally risky for Oireland Inc. to build advance factory units like John Frum devotees build airstrips in the hope that the cargo comes. Beats having to devise policies that can grow jobs out of the non-alienable economy that already existed before this FDI jobs mania was forced upon us by corporate domination of the wider European economy allied to the tonic incompetence/ignorance of those who rule over us. If Denmark's and Norway's governing classes can do this this then why can't ours?

A further point to note Tony is that whatever Microsoft gets, Aer Arann, the Quinn Group, Tesco Ireland and Supermacs have been getting too. It's 12.5% all round. It's good to be able to see IBEC hiding behing the American Chamber of Commerce in Ireland. It appears that you can't.

[Slim Buddha]

I see one of the hallmarks of a mature democracy as one where the employers federation comes up with sensible suggestions as to how we get ourselves out of an extremely difficult and complex economic situation.

This suggestion is insulting, does nothing for the solution of a problem in the here and now and demonstrates that the Irish employers federation are as thick as pigshit.

Sorry but it has to be said. Morons every one of them who stood over this!

[Tony1975]

Most if not all are if the consumption relates to ordinary business activities, and if already paid, can be claimed back.

Only the end user is liable for VAT. So, yes, if a company buys something and sells it on then they can claim back the VAT paid to their supplier. That's how it should be. Otherwise the government would get VAT 2, 3, 4 times on every item by the time it reached the end user. They are, however, liable for VAT for what they consume themselves, such as office supplies.



You and I pay VAT on the lunch we need in order to function at work, and no chance of that being reimbursed in our pay packets. Corporate personhood - it's a gas!

No, we don't. Most food has a 0% VAT rate. So, unless you are living on chocolate biscuits, or eating your lunch in restaurants, you are not paying VAT on your lunch.

[Kid Ryder]

Only the end user is liable for VAT. So, yes, if a company buys something and sells it on then they can claim back the VAT paid to their supplier. That's how it should be. Otherwise the government would get VAT 2, 3, 4 times on every item by the time it reached the end user. They are, however, liable for VAT for what they consume themselves, such as office supplies.

I concede that you have a point there about the end user. My fault for not understanding VAT so well. But for me the point remains and I must re-phrase it - the average person and the corporate sector have very different relationships with the tax system. For you and me, tax is imposed, both income and consumption in most cases. For the corporate person, they can negotiate and massage their tax burden.



No, we don't. Most food has a 0% VAT rate. So, unless you are living on chocolate biscuits, or eating your lunch in restaurants, you are not paying VAT on your lunch.

I suppose we'll all have to start bringing packed lunches to work Tony. That may not be practical though if you're a single person facing a long commute to work - you just don't have the time in the morning and you're too bushed at night. So most of us do pay VAT on our lunches if we get some table service over it.

Oh, I'd like you to respond to the other points I made in that post you mined. Don't just stand over the arguments you think you've won.

[Tony1975]

I concede that you have a point there about the end user. My fault for not understanding VAT so well. But for me the point remains and I must re-phrase it - the average person and the corporate sector have very different relationships with the tax system. For you and me, tax is imposed, both income and consumption in most cases. For the corporate person, they can negotiate and massage their tax burden.

There is no such thing a a corporate person. There is a corporation. The corporation is liable for 12.5% tax on it's profits. However the remaining 87.% is not readily available to the owners/shareholders. For the owners/shareholders to make any use of this money privately, they must pay it to themselves in the form of wages, which is liable to income tax at the same rates that are applicable to the rest of us.



I suppose we'll all have to start bringing packed lunches to work Tony. That may not be practical though if you're a single person facing a long commute to work - you just don't have the time in the morning and you're too bushed at night. So most of us do pay VAT on our lunches if we get some table service over it.

Anyone who can sit down in a restaurant 5 days a week is doing okay. I usually get my lunch from a local deli - no VAT.


Oh, I'd like you to respond to the other points I made in that post you mined. Don't just stand over the arguments you think you've won.
I really couldn't be arsed arguing against the perception that private sector employing class are the collective devil, and that there are a few thousand people out there who can be taxed enough to leave the rest of us off the hook. Or that, because our ***** government flushed €50b down the jacks, the rest of us shouldn't have to pay. It's a fantasy. We all have to pay. But people are selfish. Everyone wants someone else to pay.

To go back to the subject of this thread, it is simply not sustainable that 50% of our workforce pay no income tax. It's not sustainable and it's not fair.

[Mick Tully]

The fat cats have to take a major hit first, their pensions are disgusting both in the private and public sector. These top dogs will have to realize that when the overall revenue falls the money won't be there to pay their big pensions. Have they no cop on at all.

[Kid Ryder]

There is no such thing a a corporate person. There is a corporation. The corporation is liable for 12.5% tax on it's profits. However the remaining 87.% is not readily available to the owners/shareholders. For the owners/shareholders to make any use of this money privately, they must pay it to themselves in the form of wages, which is liable to income tax at the same rates that are applicable to the rest of us.

A lot of it depends on whether a dividend is issued. Often, a lot of profit is retained, or a share buyback is carried out. This happens particularly when board members and executives are paid in chunks of the company. Buybacks make share options more valuable, and defer any tax liablilty until when those options are exercised. Our hypothetical 'retiring' exec then has to make ways of minimising his/her capital gains exposure. See Denis O'Brien for example, but in a somewhat different (although notorious) context. I'm being a bit long-winded in saying that a dividend issue is not an automatic event.

Corporations and the people (and other corporations) who own the majority of them have more ways of avoiding taxation than the ordinary joe has. Rich people do have a different status of relationship with the taxman. I'd don't see binmen becoming tax exiles, but for the bulk of the rich here that is always an available option when they can't negotiate down their taxes to what they consider acceptable. They can even offshore without having to leave Ireland much. The Revenue Commissioners have a patchy history when it comes to enforcing this, to say the least.

A common myth is that corporate dividends mainly accrue to pension funds. The idea of widows depending on these dividends for pension income is risible. The traditional management of a pension fund is to depend on appreciation of the value of the portfolio long-term, not on accumulating and re-investing dividend income. Most occupational pensions are crap, particularly if they're earned on the shop-floor. Pension fund looting, commision farming and other abuses of private pension provision strike me as standard practice in fact. It wasn't just Robert Maxwell you know. The retail end of finance capitalism (the financial services industry) is as corrupt and reckless as its bespoke upper-end counterpart. Do e.g. bank execs or your average CEO buy an off-the-shelf pension product for their 'retirement nut'? I wonder why not. Oh, and the rich pay large proportions (oftentimes the majority) of their annual income into their pension plans to avail of generous tax breaks. Try paying most of your wages into your pension scheme if you're on €30k or less.

Everyone is theoretically liable for taxation, but depending on your social class, your relationship to the taxman alters considerably.


Anyone who can sit down in a restaurant 5 days a week is doing okay. I usually get my lunch from a local deli - no VAT.

Not true at all, or only in a very limited way. Do you eat only cold food and drink for lunch, and always only take-away? http://www.revenue.ie/en/tax/vat/leaflets/food-and-drink.html



I really couldn't be arsed arguing against the perception that private sector employing class are the collective devil, and that there are a few thousand people out there who can be taxed enough to leave the rest of us off the hook. Or that, because our ***** government flushed €50b down the jacks, the rest of us shouldn't have to pay. It's a fantasy. We all have to pay. But people are selfish. Everyone wants someone else to pay.

But ordinary people have paid plenty already, and are set to pay more to look after our 'systemically important' delinquent banking system, and see far fewer services off the back of more taxation. It was notable that Mr. Lenihan said back in late 2008 that our corporate 'low tax' regime was not to be touched, and whaddya know, it's one of the very few things the toupéed toff has been good as his word about. It's reassuring to see that Mr. Lenihan knows who not to shaft.:rolleyes:

It's interesting to note Tony that you recognise that there are class differences evident in this society, but do you think that the interests of the employing and employed classes are reconcileable? I don't, and I see the very well off are trying to stitch the bill for their various failed gambles to the majority of people who saw little of the good times except the dubious privilege of paying outrageously inflated prices to hucksters for something so basic as a roof over one's head. That's part of class conflict Tony, and the problem I have with it these days is that the violence in it is all one way - the rich taking it out on everyone else.


To go back to the subject of this thread, it is simply not sustainable that 50% of our workforce pay no income tax. It's not sustainable and it's not fair.

That 50% barely have an income, often earned in unpleasant or tedious circumstances, and there are calls by tax dodgers on many multiples of that calling for the belt to be tightened yet more on the working and non-working poor. VAT on a low income is far more of a proportion of take-home pay than it is for the very well-off, who oftentimes pay far less of a proportion of their income in tax overall than do the supposedly 'untaxed' poor. Fairness is in the eye of the referee Tony, and I don't trust wealthy match officials.

Having said all this, I'm going to finish quickly and simply. I'm not interested in fixing this shyte system so that Oireland Inc.'s plutocrats can continue drink-driving on blithely while the rest of us get turned into economic roadkill. I want to see it smashed to bits by ordinary people not taking this economic abuse anymore. You can disagree if you like, but it is the rich versus everyone else. We are not all in it together. We never have been.

[kerdasi amaq]

By taking low paid wage earners out of the tax net, Cowen was, in effect, giving them a pay rise at the Government's expense and giving employers a subsidy. Now, they want to claw it back. Disgraceful.

IBEC is cruisin' for a bruisin'.:mad:

[Captain Con O'Sullivan]

I do love to hear of people who have no hesitation in reducing their tax contribution to zero lecturing others on the green jersey.

IBEC claim they represent business 'leaders'. Lets see these business leaders lead with the hairshirt policies.

How much are IBEC's membership proposing to volunteer for the green jersey policy?