Local Poverty Tax

TaxForm
What is this? Pretty sure this wasn’t on the form before. Is this something I need to know about? Who are “High Income Individuals” – and why do they get their own special forms? What the hell is “Restriction Of Reliefs”? It sounds like something you pay for in a PVC-themed night club.

It’s that time of year again. The time when I do my taxes. Yeah, I know it’s not the time you do your taxes, but it is the time I do mine. About six months late, on average.

Once again, we open the form all a-tremble, excited to see just how many wholly indecipherable questions – perhaps entire pages – they’ve added this time. It’s not so long since they re-formed the form for the self employed so that non-accountants could read it. Year on year since though, entropy has dripped back in. A clause here, a category there, and now about 90% of it doesn’t even seem to apply to me. I guess some people’s businesses must be very different from mine, making very different things.

Money, to name one.

At least the online version has asterisks to mark the required fields. I figure I can’t go too wrong if I just fill all those. Then I scan for places to put in expenses and allowances I can apply for. Did you know by the way that if you are getting any form of social welfare payment you are entitled to a PAYE tax credit on top of your normal tax free allowance? I have no idea why, I can only guess it’s because tax is deducted at source from welfare payments – in some sort of entirely notional way. Anyway, ours is not to reason why, ours is to remember to tick the box. It may come in useful if they disallow some of my larger expenses again.

Antique erotic netsuke are research materials, dammit.

While getting my tax affairs in order, I remembered that I’d received an email from the new Local Property Tax agency. We didn’t use to have any residence-based taxes in Ireland, a Fianna Fáil government abolished them one time in a spree of vote-buying. Now that another FF administration has driven the economy off a cliff we have to have them back – though of course it’s the parties now in power that get the blame for it. Political lesson: If you create the most mess, nobody asks you to clean up.

Anyway I hadn’t paid much attention to the email. It’s a tax for property owners and I don’t own any property, I just rent a small apartment in an old four-storey building in the middle of town. Reading it now though, I find that seemingly I do. According to “our records”, as the tax people put it – by which I think they mean a hat – I own the building. Not just the room I live in. The whole. Fucking. Building. Walls of solid stone four feet thick, older than the United States, a good restaurant downstairs. According to an official government agency, it is all mine.

I tell you one thing, I’m not paying any more rent.

The Tithes That Bind

The catholic church St. Kilian in Mulfingen in...
The catholic church St. Kilian in Mulfingen in Southern Germany. (Photo credit: Wikipedia)

We think it’s bad here, where if you don’t pay a tax your children could be kept out of university. In Germany, they’ll refuse to bury you.

For this is church tax. Yes, they have church tax in Germany. Actually this is in a lot of countries, and it’s not quite as weird as it sounds. Instead of being forced by social pressure to put money in a collection, a percentage of your income tax is funnelled to the religion you nominate. And yes, it can go to none at all.

It seems that more and more people though, while nominally Catholic, have not been paying Catholic tax. The kind the church would like us to refer to as “lapsed”, of Catholic backgrounds but who, whether due to abhorrence of its actions or simple lack of belief, no longer take any active part. Maybe going at Christmas. Maybe getting married in church to please their mothers. Maybe being buried in the family plot.

No longer. It appears things were brought to a head by a Catholic theologian who took the issue to court. Interestingly, he in no way wanted to refuse a contribution. His objection was to doing it through the taxation system. It was a church and state thing. Or if you want to take a religious point of view, a God and Mammon thing. But the upshot is that the Catholic Church in Germany has come down hard on paying your dues. In or out, no more fannying around. If you aren’t a subscribing member, you will be refused… services.

As marketing it’s a master stroke. People will value what a religion provides much more if it has a certain exclusivity. The Catholic Church – Members Only. It seems a perfectly sensible business model – for an insurance company, or a breakdown service, or a gym. I’m not sure how they’re going to make this work for a religion though. I mean, the important thing in Christianity is what you believe, isn’t it? Not what you invest. Will deathbed repentance still be good enough, or will you have to sign a cheque for your backlog of tithes before you get absolution?

Because that’s awful reminiscent of something the German Catholic Church did before once, and it didn’t work out well.

Charge Of The Lie Brigade

“Better communities start at your doorstep.”

That’s what it says on the final reminder to pay your Household Charge (the new property tax being introduced here in Ireland). They manage to combine meaningless bullshit, calculated deceit and veiled threat all into one brief phrase. That shows flair.

Don’t pay the charge and your neighbors suffer, it seems to say. As if central government is lowering its funding to local authorities by precisely the amount the household charge should raise. Of course, central funding for local spending will be reduced by far more than the household charge was ever going to raise – even if everyone could pay, never mind will. The shortfall will eventually be made up by allowing local authorities to raise the charge. So central government can keep lowering its contribution, effectively raising taxes while avoiding blame.

Neat.

I just wish though, instead of this careful blend of wheedle and threat, instead of pitting neighbour against neighbour, they’d try being honest for once.

“We’re sorry, we know it isn’t fair to ask you to bear such a big portion of this debt. But as you probably know, the more money people have, the harder it is to get it out of them. We promise we’ll go after the the tax-dodging bastards, but right now we need money fast and it looks like it’s got to be you. What do you say?”

I’d pay that.

And Why Not A Tax On Age?

Tax
Generic Tax Illustration

But first…

Desperate times call for desperately unfair measures. A popular one is cutting back on public overindulgences like health and education. Another is increasing flat taxes like VAT rates, because they at least seem fair. Indeed the richer you are, the fairer they seem.

Basically, it’s all about finding ways to squeeze those who can least resist the squeezing.What’s the point of trying to tax the richest after all? They’ll always find ways to bribe you not to. So it’s the poor that get it.

But mammies are sacrosanct. That’s the rule, or so we thought. It’s not worth the political risk. Make life hard for the elderly, and you make the whole country angry. They already have enough to worry about – i.e., everything you ever do or might do. The last thing they need is a vaguely threatening letter, apparently designed to sow the maximum amount of fear and confusion.

Yet that’s what mothers and grandmothers all over the country have just received. Statements, to be exact, of their revised tax credits. Now I am self-employed. I do my own accounts, make my own tax returns, so on. But I have read one of these letters, several times, and I have no shrieking idea what it means.

Many retirees have a work pension as well as their state one, both of which they paid towards of course, and neither – they were given to understand – liable to tax. But now the worry is that between them they create a tax liability. This means people with zero hope of ever increasing their incomes are now in fear that the money they budgeted for is going to be suddenly reduced. By how much? Will they still be able to feed themselves, still afford fuel? They have absolutely no idea. All the have is a document covered with the calculations of bureaucrats, that might or might not represent an end to any security.

This is wanton cruelty.

But I Regress

Income Tax rates by Country based on OECD 2005...
It's insane how low our direct taxes are

Incentives for property investment? There are times I want to go into government buildings with some sort of brain detector, see can I find anything. The reason why the property market is moribund is that property is still insanely overvalued. Urging people to invest in something overvalued is not only what got is into trouble in the first place, it’s surely a form of fraud.

Insanity is repeatedly doing the same thing while expecting a different outcome.

This budget is going to make me worse off. This is not what I object too though. What gets me is that it will make people who are better off less well off than it will make me. This is something to do with it being a “jobs budget”. They don’t want to create a disincentive for the poor to work by taxing the rich too much.

I think they do their economics by voodoo and shibboleth. They have raised money today by every means conceivable except raising income taxes, because raising income taxes is a Bad Thing. The result is that we have a highly regressive budget that hurts the poor far more than the well-off. Certainly it could be counterproductive to pile on excessive taxation. But is it not even more mad, in the midst of economic disaster, to have some of the lowest direct taxes in the developed world?

My mother, confused about why she’ll be able to afford less fuel this winter, asked me “So why can’t they tax the rich?”

I thought for a minute, and replied “Mainly, because they’re rich.”

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But I Regress

Income Tax rates by Country based on OECD 2005...
It's insane how low our direct taxes are

Incentives for property investment? There are times I want to go into government buildings with some sort of brain detector, see can I find anything. The reason why the property market is moribund is that property is still insanely overvalued. Urging people to invest in something overvalued is not only what got is into trouble in the first place, it’s surely a form of fraud.

Insanity is repeatedly doing the same thing while expecting a different outcome.

This budget is going to make me worse off. This is not what I object too though. What gets me is that it will make people who are better off less well off than it will make me. This is something to do with it being a “jobs budget”. They don’t want to create a disincentive for the poor to work by taxing the rich too much.

I think they do their economics by voodoo and shibboleth. They have raised money today by every means conceivable except raising income taxes, because raising income taxes is a Bad Thing. The result is that we have a highly regressive budget that hurts the poor far more than the well-off. Certainly it could be counterproductive to pile on excessive taxation. But is it not even more mad, in the midst of economic disaster, to have some of the lowest direct taxes in the developed world?

My mother, confused about why she’ll be able to afford less fuel this winter, asked me “So why can’t they tax the rich?”

I thought for a minute, and replied “Mainly, because they’re rich.”

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America’s Praying Politicians

American cultural icons, apple pie, baseball, ...
No One Gets A Slice

Disturbing to watch Tea Party representatives talking about how they’re praying for guidance as the economy teeters on the edge. This is the American Taliban. They have their own fundamentalism, ostensibly Christian rather than Islamic perhaps, but like the original Taliban they hate the American government. Unlike them, they have a real chance of harming, possibly destroying it. And they don’t even need weapons, because they attack from within.

On whose behalf are they fighting? That of America’s greatest enemy: Its own wealthy.

Many of America’s rich want to divest themselves of any responsibility towards their fellow Americans. It’s not as if they were ever under a lot of pressure to help out anyway, but in recent history at least it has worked better that way. You would employ Americans to make things to sell to other Americans, who could afford to buy things because they were employed to make things… Not everyone was included within this benign circle of course, but the general upshot was an optimistic land where it was at least believed that everyone’s lot could be improved.

But now that circle has been broken. The simple fact of the matter is America’s rich don’t need other Americans anymore. They buy, make and sell globally. America is just one market, and they don’t need to invest in it. Americans do get cheaper goods that way, but less and less are they buying them off each other. So though the super-rich are making more money than ever before, a large part comes from effectively taking a cut out of the export of America’s jobs and wealth. We can only watch in horror as what was once a country of opportunity for the poor grows an ever-widening gulf between a tiny minority that becomes more fantastically rich all the time and the vast majority whose position is deteriorating.

How can that ever happen in a democracy, when it is up to the people how the country is run? It’s simple really. The super-rich sponsor all the parties. But the Tea Party is taking it to new extremes, preaching a blatantly wealth-favouring agenda while using prejudice, fear and religion to manipulate others into voting against their own interests.

The irony is that it’s named after the Boston Tea Party, an incident leading up to the American War of Independence, yet the people its policies favour want to run America exactly like an exploited colony –  milking it for what can be got, giving as little as possible back. The US has a new aristocracy, and they will be a lot harder to dethrone than one based far overseas.