Tax Breaks For ‘Globally Mobile Talent’

at

maryhonohan

Mary Honohan, President of the Irish Tax Institute

Oh.

Those guys.

Taxpayer writes:

The Irish Tax Institute (read US Multinational tax Lobby Group) has an Op-Ed in today’s Irish Times [‘Irish income tax system is skewed, uncompetitive and too complex’ by the institute’s President Mary Honohan] looking at the role of Ireland’s personal tax system and its impact on our “global competitiveness.”

It goes on to make an absurd suggestion that Irish employees have no incentive to look for salary hikes or promotions due to “such high levels of personal tax“.

It also puts forward the notion that “skills and talent are in scarce supply” but the last time I looked we had an unemployment rate of 9.7%.

What is really galling though is that we give generous tax breaks for highly-paid executives of US multinationals or “globally mobile talent” as the ITI calls them.

It finishes by asking the whether “it is really sustainable to continue to draw on a small group of taxpayers who already contribute such a sizeable chunk of the income tax yield? We must also ask if it would be better to have broader participation in our tax system?”.

But the real question they are asking is whether the regular Irish taxpayer and those who earn the least in society are willing to INCREASE the amount of tax they pay in order that those at the top (the “talent”) who earn the most can benefit?

Gulp.

Previously: The Myth Of Progressive Taxation (Fintan O’Toole, Irish Times, September 29, 2015)

Pic: Irish Tax Institute

44 thoughts on “Tax Breaks For ‘Globally Mobile Talent’

    1. DubLoony

      I would love it if someone could actually list in detail exactly what skills are missing.
      We still have 7% unemployment. construction will absorb many of those over next few years.
      But we need to do an exercise of matching skills needed with available people.

      1. Fact Checker

        The unemployment rate for people with third-level and above is 4%. Labour force participation (employed plus unemployed) is 88%. For those with skills in Ireland there is essentially full employment.

        For those with primary level education unemployment is a whopping 19%, with only one in three either seeking employment or in employment.

        There has been a big structural shift across the west in recent years. People with particular skills earn more. People without them do not. If they can find a job at all. This is not unique to Ireland but is particularly pronounced in Ireland.

        This needs two responses:

        A tax-benefit system which acknowledges that some will earn an awful lot and some will earn very little. Social harmony and personal dignity mean a large level of taxes and transfers from the top of the income distribution to the bottom. Incentives to remain in work (and to seek it) should not be dampened too much though.

        A radical re-think of education policy is needed too. People are coming out of the school system with neither the cognitive skills to work in offices NOR the technical/manual skills to work in industry or more hands-on parts of the service sector. Unique in Europe, Ireland provides absolutely no vocational education at second level.

  1. Serv

    Who is the regular Irish taxpayer btw? Cause according to the article the regular Irish taxpayer is paying more so other regular taxpayers pay less or nothing.

  2. Cata

    The Irish Tax Institute has always been the armed wing of the Blueshirts. This organization is IBEC Part II.

    1. classter

      So OECD research is limited (fair point) but research form the Nevin Institute, which is specifically ideologically orientated can be taken at face value?

    1. Martin Heavy-Guy

      Add in all those on Job-Bridge and schemes and it might stretch higher than 9.7%. It’s an impossible figure to estimate.

      But in the spirit of those in the top tax bracket who don’t seem too willing to move, I’ll make an estimate by pulling a number out of my arse.

      Unemployment is currently at 28%.

  3. Jake38

    “it is really sustainable to continue to draw on a small group of taxpayers who already contribute such a sizeable chunk of the income tax yield?.

    Of course it is not, but that’s exactly the delusion that animates socialism.

  4. Louis Lefronde

    25% Tax and not a penny more. Why should you work 6 months every year just to pay tax before you take home your own money

      1. louislefronde

        Absolutely, I am all for a flat rate of 25%. If a person is on a low income, they can go out and get a second job and keep 75% of their additional income.

        You have to reward ambition, not penalise people in order to buy votes which is pretty much what goes on in Ireland.

    1. Nollaig

      I don’t know why you’d do it, and I really don’t care as long as you do. Someone has to pay for my house and beer money

  5. hans landa

    80% of income tax is paid by 25% of the workforce – clearly highly skewed in favour of lower income earners. The concept of “higher earners” in Ireland is laughable in an international context. We seem to think that if you earn close to 100k you are essentially sleeping on a bed of money and that you should pay much much more irrespective of how hard you’ve worked for it

    People are discouraged from seeking pay rises at the higher end of the income pool. for example, there are doctors who are not really that bothered with doing overtime since more than half of the next euro earned is going straight into the State’s pocket. I certainly don’t enjoy watching >50% of my bonus go out the door to fund

    Why would you bust your nut to get to the top of your chosen field if the state is going to take more of the reward than you?

    1. MoyestWithExcitement

      “Why would you bust your nut to get to the top of your chosen field if the state is going to take more of the reward than you?”

      Because you love and have pride in your craft and see money as an incidental by-product? Right wing economics doesn’t seem to understand how people actually think.

    2. bulletin

      if only 25% of earners are paying 80% of the tax in Ireland and the only earners excluded from actually contributing tax are earning less than 13,000 a year then maybe your figures show that far too many of our neighbours are busting their nuts to barely pay the bills and in their eyes you actually are lying on a matress made of money if you earn 100k a year.

      perhaps it is your civic duty to make a fair tax contribution while living and working here to ensure the lives of those on little or no earnings do not become so disenfranchised from society and devoid of any hope that they turn to violent rebellion and burn your matress in a fit of rage.

      perhaps they will be joined in their arsonist fit by those in the country who earn a modest average wage of 35000 but still have to fork over the same percentage as you leaving them also unable to enjoy the same soft cushion of cash beneath their fitfully sleeping heads.

      maybe

      1. louislefronde

        Really? How many of these people are working ‘nixers’ in the black economy and not paying tax on their earnings. When you have 20% of the working population paying 80% of direct taxes, something is radically wrong with the system. As anyone with a brain knows, the very wealthy can afford to pay tax advisors to help them avoid tax in our current arrangement (and sometimes evade it outright, which of course is illegal) These same people are the ones who fund our main political parties and individual politicians: Fianna Fail, Fine Gael, Labour and yes Sinn Fein too. Our political parties under the guise of ‘progressive taxation’ buy the votes of ‘low income earners’ with high direct taxes on the middle class (votes for benefits) This is the source of clientelism at both ends of political system, and hence we have the ‘squeezed middle’.

        Lets put it plain language…. there is a number of very wealthy people in Ireland who pay almost no tax. There is a large proportion of the population who pay little or no tax, but receive a lot of benefits. Then there is 20% of the population who pay 80% of direct tax and get sweet F.A. for their tax euros.

        With a flat tax of 25%, everyone who works, pays – high, middle and low (sorry but that is real equality)

        1. Anne

          “With a flat tax of 25%, everyone who works, pays – high, middle and low (sorry but that is real equality)”

          Sorry but that is NOT real equality Louis from Cote D’azur.
          If you had equal pay, then it might be considered equality…. but we don’t have equal pay. And there are plenty of people making a lot of money without having to work.

          1. rotide

            Why does everyone deserve to be paid equally?

            Do you really think that there’s people who earn over 100k without having worked for it?

            How much drugs are you on exactly?

          2. Anne

            I didn’t say everyone deserves to be paid equally, but only under those circumstances would an equal rate of tax be fair.. Learn to read.
            If a person earns 400 euros a week, it wouldn’t be fair to tax them at 50%, as it would if someone earns a 100k.

            “Do you really think that there’s people who earn over 100k without having worked for it?”

            It’s evident to any fool that with there being so much wealth concentrated in a few hands, that it’s nothing to do with how hard these people are working.
            I don’t know how hard anyone works to earn what they earn.

            Is there much work involved in setting up a charity and buying swathes of mortgages at big discounts… it’s doubtful.

          3. ahjayzis

            Do you really think that there’s people who earn over 100k without having worked for it?

            MARIAN FINUCANE.

            The prosecution rests.

    3. Anne

      “80% of income tax is paid by 25% of the workforce – clearly highly skewed in favour of lower income earners”

      That would indicate we have a lot of low income earners in the country…

      If you were to increase the rate of tax for lower income earners to increase the overall tax take, this wouldn’t leave them with much.. they already don’t have much to work with.
      It’s called a progressive tax system. Look it up. People cannot pay what they don’t have.

      Find another source of tax – eh like the wealthy, hello… instead of focusing in on who pays what percentage of PAYE tax.

    4. Fact Checker

      These kind of figures (80% of tax by 25% of earners) are eye-catching but they ignore PRSI (employer and employee) which is paid more or less proportionate to income by all of those in employment.

      When you include this the personal taxation looks much less progressive (it is till progressive though compared to most countries).

    5. Dara O Rourke

      The system is skewed by the quite large number of people not paying in at all. I met s German guy a while ago who was doing very well in IT – more luck to him. But he said he had paid no tax in four years. Why should he when none of the people who employed him did was his justification. Which is ‘ why your country is fucked’ in his opinion.

  6. Anne

    But the real question they are asking is whether the regular Irish taxpayer and those who earn the least in society are willing to INCREASE the amount of tax they pay in order that those at the top (the “talent”) who earn the most can benefit?

    The real question should be whether those who earn the most are paying enough tax.

    Low paid PAYE workers are being compared to middle income earners, when we should be comparing middle income earners to wealthy individuals who can avoid tax altogether.. you’re comparing people in a bucket, when there are some people who aren’t in the bucket at all.

    There are too many incentives in this country for wealthy individuals to invest in funds where they pay no tax at all. Look up Mathesons, Davys for info on QIFs for example.. zero tax.

    1. martco

      …which what yer wan and all her similar partners have dedicated their life’s work to…helping fatcats avoiding tax..alien concept to me how someone could spend a life doing that….being a little soldier for the 1%. immoral. and a whopper conflict too.. as I betcha she’s Opus Dei too, it’s in the face,,,enjoying the oul barbwire undershirt a bit too much

  7. Barry the Hatchet

    “Irish employees have no incentive to look for salary hikes or promotions”. This is such utter bullpoop. I have never ever met a single person who would turn down a raise because of tax. Such people do not exist.

  8. petey

    the neoliberal project has always been predicted on the idea that the ideologues have a right to dictate to workers, and the content of the dictation is that workers should allow themselves to be treated as peons. as again here.

  9. sircraic

    On the ex-pat assignments I’ve done my employer still paid me as if I was in Ireland while I was working overseas and they either paid or benefited from the difference in tax between Ireland on my host country. So I think its more a case of foreign multinationals wanting to reduce their tax burden than the mobile talent itself.

  10. Kolmo

    Is there any legal constraint on calling an organisation an ‘institute’, as if it is some august arm of the state with the interest of the citizen at it’s core when clearly it’s just a shower of self-interested private lobbyists, see above or the so-called iona institute..

    1. classter

      Does the same not apply to the Nevin Institute (NERI) which O’Toole is uing to ‘debunk’ the OECD research?

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