High earners will face 3% income levy

From Todays Sunday Business Post

sbpost.ie/post/pages/p/story … qqqx=1.asp

and also

minister brian lenihan must have been watching the late late show for his inspiration friday night

phew! - the country is saved.

i don’t have to worry about that levy! but at the same time it seems a bit stupid, people earning that kind of money are also likely to be business owners who will just turn into ‘offshore’ citizens because there is now an incentive to do so, if you are paying 41% already it seems unfair to pile the extra tax on those who are already paying the most, and it is also likely they cost the state the least so it is not fair distribution. its easy to automatically hack into the high earners but the single greatest area of gain has not been addressed in this budget and it is the size of the state/civil service! these moves merely take the focus away from this.

As has been said before on here if these high earners want to become offshore citizens then change the tax laws to the same as Canada or the US. If you want our passport you pay our taxes. Simple.

dual citizenship is totally legal so you can have the passport and not pay the taxes. this just means more people will ‘opt’ for that 2nd citizenship. People on very high income are generally also of a certain profile which means they are greater contributors to the economy: for instance if you earn 250k or more you are likely employing people, you are already paying 41% tax and the highest amount of PRSI, you likely don’t use state services to the same degree that the 34% of people who pay no income tax at all use them.

this is just a case of killing the goose that lays the golden egg. its a simplistic answer to simply ‘go after’ the rich. read about the laffer curve and it will help explain that there is a point in taxation where raising it actually means there is a smaller take to the public bourse. I think ireland will reach and pass with a tax which doesn’t even allow for the deduction of expenses, in the first year it might be a big success because it will take time for people to react and various offshore trusts to be set up but in the future it will be a rich-drain which will hurt the country even more.

MB dual citizenship is legal in canada and us too!!!

And as has been said before on here, when ZanuFF mess up the economy so bad that I have to emigrate I don’t want to still be paying them taxes to support their latest zany developer bailout scheme.

Can we delete this thread, I don’t want to give them and ideas. I can see them introducing it but with an exemption for high earners and CIF members.

But that is taxation without representation. It would affect a great many people to deal with a few very rich citizens who would promptly buy another nationality.

Ah yes, this will help when senior (often foreign) managers from the big international companies go to their bosses and say something to the effect of “What the f*** is this? I have to pay a 3% levy because Ireland had a housing bubble? I want a pay rise to compensate me for this ‘levy’.”

Now they’re unlikely to get a pay rise right now - since economic conditions will be bad for everyone, but the resentment about this will not fade quickly away and will damage Ireland for decades. It’s morally theft. The government is saying “I made promises I can’t keep and I’m going to take your money to make up the difference”.

People cannot resist government theft in the short term, but in the long term they can. The government will regret all these levys in the not-to-distant future. If you’re an american or french or chinese manager in Ireland a levy like this makes Poland or the Czech Republic suddenly worth a look for the next expansion of operations…it makes it worth a look on a PERSONAL basis as well as on a company basis.

Thanks Brian, you just fucked up.

No it is not. Non resident US citizens get to vote in the US as well as paying taxes.

Effective taxing on citizenship in Ireland would require the renegotiation of lots of our tax treaties which unlike US tax treaties are based on taxing residents rather than citizens. We might lose more than we gain in renegotiated treaties.

I don’t think any country ever managed to tax its way out of a recession but dammit if Ireland isn’t going to try anyway.

It’s truly scary how many of my worst fears about how Fianna Fail would react to the bursting of the housing/credit bubble (spend what little we have left vainly trying to prolong the party, increased taxation, builder bailouts etc.) has come to pass.

In ten years time Ireland will be held up as a model of exactly what not to do during a recession.

Fixed that for ya :wink:

Passports generally have nothing to do with tax status. For example, I hold dual US/EU citizenship (by birth, not naturalized). However, the tax treaty between the US and Ireland ensures that I only have to pay taxes in Ireland, not the US (although technically I still have to file in the US). Changing the law as OP suggests would ensure that, for example, any Irish person living abroad would pay double taxes, no matter where they live. Makes no sense to me.

More than just a technicality. You have to file a tax return to claim your foreign earnings deduction and foreign tax credits as a deliquent you don’t get these and owe tax.

Also even if you file there are plenty of circumstances under which you owe US taxes, particularly under AMT. Also they tax inheritances over €100k between spouses if the recipient is non US resident.

My understanding (and that of a tax advisor consulted by a family member) is that although you loose your foreign earnings deduction credit if you don’t file, you still don’t owe any tax due to the US-Ireland dual taxation agreement, which takes precedence. Same goes for AMT.

Again, that is my understanding but I’m not a tax expert, and I don’t even play one on TV.

The only reason you don’t pay anything on the tax return you file in the US is either you don’t earn enough, or Irish taxes are higher than the US equivalent or, as you say, there is a quirk in the tax treaty that Pres. Obama will address…

No, they would pay the difference between local taxes and Irish taxes as Americans do.

Yeah I think I must have been smoking crack when I posted my original reply. I don’t personally believe that it’s a good idea to tax nonresident citizens, but it could certainly be done.

BTW I don’t think that the Irish-US tax treaty has a “quirk”… I believe it was specifically designed to ensure that you pay tax only in one jurisdiction. AFAIK such treaties are common. See for example

lowtax.net/lowtax/html/jir2tax.html

which says
“Ireland has comprehensive double taxation agreements in force with 44 countries. The agreements generally cover income tax, corporation tax and capital gains tax (direct taxes)… In its Pre-Budget Submission 2007, published in October 2006, the Irish Taxation Institute called on the government to increase the number of tax treaties in place with other countries.”

Whether or not this is a good idea is of course up for discussion!

Like most things in Ireland part of the solution is implementing the laws we have.
for instance alot of our current so called ‘tax’ exiles dont pay Irish tax cos they arent domicile here for the requisite amount of time, or so they claim, nonoe really believes that, and judging by the amount these same people grace the social sections of our papers you would believe they never left the place.
Most of these people fly in and out by private jet to small airports, hang on a minute there Watson didnt the Gubberment just announce small craft wont have to pay the 10 euro levy on flights per passenger, wouldnt that mean the passenger manifest doesnt become an item of record. I beleive your right Sherlock, no way now to track those pesky businessmen flying in and out.

I think Denis O’Briens tax stunt was the best, his accountant was claiming he wasnt domicile in the country because the 5 million euro pad he had here didnt have a kitchen so wasnt classed as a domestic dwelling.

Great to see Bono and the boys do their bit for the Irish situation moving their company off shore to holland i believe to avoid paying even the miserely amount of tax they were paying. Is bono a tax exile at this stage.

Speaking of the arts this 250k limit wont affect the Artist tax free exemption claimed by some of the richest in the land. Jaysis Mary you cant be taxing verse chorus versus bridge chorus…

3% is fine on those earning 250k or more, most are in business and are claiming an allowance on the bog roll they use.

The French tax citizens on foreign properties, alot of their illuminati have gone to great bother to get foreign passports and ditch their French ones. they lso have a pro rata tax system for the arts, if you are stuggling in your cold damp attic writing about existensialism then you pay 0 if your living on the cote D’azur you pay some taxs.

Britain has a disgraceful tax status for foreign high-earners, thats why all the russians have relocated there. I believe one billionaire oligarch living in London remarked to his cleaning lady that she was paying more tax in Britain than he was , and all this under a Labour government.

The moral of it all the rich get richer by avoiding paying their fair share of tax … and dont you forget it.