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How helpful we are to foreign capital. How very very helpful. May 31, 2013

Posted by WorldbyStorm in Economy, Irish Politics.
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The SBP had a very telling piece at the weekend on one of the clever wheezes that characterise much of what passes for political action in this state, particularly on the economic front. Remember how important, how central, it was to ensure that taxation didn’t deter foreign executives from working in this state? Well, on foot of the Special Assignee Relief Programme which made it possible for some execs to ‘avoid paying tax on 30 per cent of annual income between €75,000 and €500,000’ and with an expectation on the part of the Department of Finance that up to 100 individuals would apply for the scheme it now transpires that:

Just six foreign executives have availed of [the] government tax break.

Now what does that suggest? Perhaps that far too much is made of such schemes, that corporations, and I’ve seen this at first hand (even if we weren’t given an object lesson in same from Apple in the last week or so), have ways of circumventing taxation in all forms, or mitigating its impact on the individual.

There’s another aspect to this, and that is the following:

Under the scheme, expenses paid to employees for private school fees of up to €5,000, as well as travel and trips home, are also exempt from taxable income. The department data showed that just one employee availed of the education relief.

Why should the state be enabling lifestyle choices like private schooling? Particularly when it pours enormous sums of money into the public education system? It’s like a perfect vote of no-confidence in that area of state provision, or an attitude that those who are wealthy, and those are people on fabulous incomes from the get go, will ‘of course’ choose private schooling and must be facilitated in that choice.

There’s something uniquely dispiriting about that.

Entertaining line from FF which isn’t agin such schemes, but wants better promotion. Really? To see yet more income evade the state? Though can’t entirely disagree with the idea from the FF spokesperson that ‘the government would get a greater return from helping the domestic small-to-medium-sized enterprise sector’.

Comments»

1. richotto - May 31, 2013

Its incredible the acceptence across the board of the low corporate tax regime. Even the radical left seem to be saying that if the 12.5% is held as the effective tax rate that would be sufficient. Theres no attempt at a cost benefit analysis, the benefits are just taken as read. In a pre budget presentation about eighteen months ago Jim Power advocated a 15% rate and many economists would I believe say that it would do no harm and raise some money. Its only when it gets into the political sphere that it becomes non-negotiable. People like Fintan O Toole present excellent critiques of our slavish approach to big business. Compared to other so called austerity issues the far left seem quite mealy mouthed and low profile on the corporate tax issue.

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