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Tax unfairness? February 17, 2017

Posted by WorldbyStorm in Uncategorized.
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The SBP’s Brian Keegan had ‘a tax essay’ in last weekend’s edition of that paper. And it was about ‘tax unfairness’. Some good points in there, not least that Eoghan Murphy’s idea of a ‘tax report’ which would show where an individual taxpayer’s money went in terms of state expenditures would actually undermine the system (as well as which it makes no sense – individual taxpayers monies don’t go in different directions to one another – all one has to look at is the overall expenditure stats to get a sense of things).

Keegan argues that there’s not much focus on the ethics of tax payments in academic literature. It’s not an area I’m familiar with so I’m open to correction on that. But he continues:

It seems to me that Oxford law professor Tony Honoré makes a better fist of the issue than most… [he argues] that when a person lives and functions within a particular country they have a moral or ethical obligation towards meeting the collective ends of their community. In modern economies that will involved a monetary payment, namely the payment of taxes.

And he notes that €8 out of every €10 is collected through taxes that cannot be evaded, PAYE, VAT etc. He takes tax evasion to task, as being unethical, tax avoidance not so much. Which leads him into an interesting if somewhat expedient argument that because there is no ‘single international authority to collect taxes from business operating across borders’ therefore arguments or ‘allegations’ of tax unfairness and ‘the old chestnut of labelling a country as a ‘tax haven ‘ therefore miss the point. And these are built from ‘mismatches’ between different states – as if they were geological formations unyielding to any exterior pressure but wind and rain. Not so sure about that, now.

Still, there’s one throwaway line that really struck me.

Once we start considering the issues beyond tax compliance, we have to then evaluate our concept of fairness in terms of our own position as taxpayers.

What are we missing out on? As wage earners, we miss out on the flexibility afforded to business. And as higher earners, we miss out on the lower rates afforded to those on lower incomes.

A lot of assumptions in there, but what an interesting way to put it… ‘miss out on’?

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Comments»

1. bjg - February 17, 2017

Sheila Killian in UL is one person who has written about tax justice http://www.ul.ie/business/kbs-staff/dr-sheila-killian

bjg

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2. GW - February 17, 2017

And he notes that €8 out of every €10 is collected through taxes that cannot be evaded, PAYE, VAT etc

i.e. Personal taxes and expenditures. RoI works on the model that 90% of the corporate tax obligation should be evadable / avoidable.

The things we’re thus ‘missing out on’, include better schools, health service, public transport infrastructure etc. etc.

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3. CMK - February 17, 2017

70% of Irish businesses pay not just zero tax but actually get, on an annual basis, a 400-500 million rebate. The tax paid by the next, approximately, 28% of businesses more or less covers that rebate – give or take 10 million or so, peanuts in government expenditure terms. The next 1.977% of businesses pay about a billion, maybe a billion and a half in corporation tax with the remaining .003%, give or take, paying everything else. That latter category covers about 450-500 companies at the most. The business lobby groups get a vast influence on public policy here, including regular lectures on what the ‘taxpayer’ requires and yet an infinitesimal number of companies pay nearly all of the corporation tax collected. I did a back of an envelope calculation once and the billion or so corporation tax paid annual by 99.77% of Irish businesses covers about half the budget for the IDA, Enterprise Ireland and the Local Enterprise Offices. There are businesses here that have been going for decades and paying out handsome ‘directors fees’ to its owners which have never made a red cent in corporation tax payments. This business can, if it wants to, avail of tax funded ‘enterprise supports’ should it need them. For instance, our county Local Enterprise Office is running, taxpayer funded, workshops in a swish enough hotel for businesses who want to find out more about how to set the best prices for their products. I mean if they need state help to tell them with 101 on running a business then maybe they shouldn’t be running one? Meanwhile, we see a relentless war on wages, terms and conditions for workers – Tesco this week, Bus Eireann next week – which, structurally, is depressing earnings for most workers, even if the ‘average’ is increasing.

I think we need to debate ‘tax fairness’ but I think the debate the SBP and that crowd want is a fundamentally different one to what I’d say most CLR contributors want.

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4. PaddyM - February 17, 2017

Eoghan Murphy’s idea of a ‘tax report’ which would show where an individual taxpayer’s money went in terms of state expenditures would actually undermine the system (as well as which it makes no sense – individual taxpayers monies don’t go in different directions to one another – all one has to look at is the overall expenditure stats to get a sense of things).

Eoghan Murphy’s idea makes perfect sense if the idea is to get private sector PAYE taxpayers to feel resentment towards the “public servant wasters” and “welfare parasites” who “their” money is going to fund. It’s intended as a party political broadcast for the Ayn Rand wing of FG.

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5. sonofstan - February 17, 2017

The FG new breed see the world entirely through a business school lens. A few nights ago, i heard one of them refer to the IRA as SF’s ‘partner institution’; last night another say elections were all about ‘market share’

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6. dublinstreams - February 18, 2017

here is the article http://www.charteredaccountants.ie/Members/Technical/Tax/Thought-Leadership/The-Fear-of-Missing-Out/ been interested this idea from an open data angle, although it does worry me too, but more clear information can’t be a bad thing can it? Nobody is suggesting that different people taxes go to different areas. The UK started doing this in 2014 https://www.gov.uk/guidance/annual-tax-summary the US in 2013 http://www.whitehouse.gov/2013-taxreceipt Eoghan Murphy is trying to push the gov towards it with a very a general version of it here http://whereyourmoneygoes.gov.ie/ PublicPolicy.ie put out this http://www.publicpolicy.ie/where-does-your-tax-go/ Including indirect taxes is the difficult bit, the UK version includes the average indirect taxes per centile http://app.wheredoesmymoneygo.org//dailybread.html last time I looked the CSO didn’t produce those stats.

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