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Monday, February 12, 2007

Irish General Election 2007: Low Tax Myth - Income Tax & Stealth Taxes

The figures on the map show the level of average new car prices in each market compared to the average for all euro currency markets in 2006. Index 100 represents the European average Source: ROADTODATA

Irish people can become adults after a third level education and twenty or more years of the Irish education system, and be clueless about the tax system.

So in stoking up interest in a general election, it is more idiot proof to concentrate on income tax rates rather than a cure for insomnia like focusing on indexation of bands.

The tax burden has only changed a fraction of 1 per cent in the period 1995-2005 according to the OECD.

It has remained in the range of 36%-37% of GNP despite significant reductions in income tax because stealth taxes in Ireland ar among the highest of the 30 mainly developed countries if the 30 country member government sponsored think tank.

Progressive Democrats leader Michael McDowell heads into the General Election 2007 as a one club golfer with only one clear policy - reduction in personal tax rates and he has only achieved a 1/2% reduction in the top rate of tax since 2002. The health levy is a tax. Right?

Labour leader has left McDowell's barethread policy platform even more bare after Rabbitte committed the Labour Party to a reduction in the standard rate of tax by 2%.

McDowell can hardly say again that stamp duty revenue or its equivalent is not needed - permanent prosperity has been achieved hallejhuah!! - given the impact on buying decisions after his comments on abolition last September.

During the period that the PDs have been in coalition, direct revenue from property taxes have gone from 4% of tax revenues to 17% in 2006.

It has not all been a benign result of a property boom.

Anyone who is an aspiring first time house buyer who is waylaid by PD politicians bragging about reducing taxes - ask them the average price of a new Irish house/apartment and how much does the Exchequer collect from the cost --- a cool 28% in taxes starting with VAT @ 13.5%, plus levies, site stamp duty etc - according to Minister for Finance Brian Cowen TD.

There is another tax equivalent that PD Party President Tom Parlon forced the FF/PD government in 2001 to concede and is also a huge stealth tax.

Up to €4.6bn of the €18.5bn of taxpayers' money that will be spent on new main roads over the next decade will go into the pockets of landowners. Fred Barry, chief executive of the National Roads Authority is reported as saying that the increases in the cost of land for major roads projects as "disturbing".

Land acquisition accounts for 23% of the cost of roads projects in Ireland, but just 12% in England, 10% in Denmark, 9.4% in Greece and 1% in Iceland. A further 2% of the €18.5bn provided in the Government's Transport 21 for road building over the next decade will go to archaeologists.

Is this a tax? Is the corrupt land rezoning system a tax on property buyers via the artificial creation of land scarcity?

In a bizarre twist, PD leader Michael McDowell is leading the campaign for abolition or reform of stamp duty while PD President Tom Parlon can take credit for the road building bonanza for farmers on public welfare via the Common Agricultural Policy from Brussels - - welfare that is still primarily funded by German and Dutch taxpayers.

Jean Baptiste Colbert (1619–83), Minister for Finance to French King Louis XIV reputedly said: The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.

It generally works because politicians get away with blather on income tax without being challenged by voters or journalists on so many other taxes.

Just have a look at the car price image above and wonder why is there such a big add-on for Irish motorists?

RELATED

Irish General Election 2007: Some questions that voters should ask the politicians

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