- May 9, 2005
- Reaction score
- United States
Did you work for a company with a foreign parent? If so, tax rate was one of the primary drivers of you even having a job. You can avoid the conversation all you want and attempt to convolute it with VAT taxes all you want, but ultimately you had a job and upcoming funded pension because companies came to Ireland based on the 12.5% tax rate. Your communist-light leanings may not like it, but you sure as hell benefited from it just like many of your country men, woman and children.You clearly did not understand any of my five points.
Any salary or pension that I have earned was based on my perceived value to the company. If they decided that by paying my wage and using my software that they would make extra money over and above my wage (profit = added value - wage), then that is before taxation. If I did not provide surplus value to the company then they should not have employed me, they would be losing money. How much pre-tax profit they would make would be down to pay negotiation between me and them. So either I am a profit or loss to them, changing the tax rate only alters how much they profit or lose.
Say my wage was €1000. Case 1, I provide €1200 of overall value and case 2, I provide €800 of overall value. So in case 1 I generate €200 profit, in case 2 I generate €200 loss. That's before tax. Assume there are 2 tax rates, 25% and 50% just to keep it simple. Also assume that the company is overall profitable, regardless whether I am a plus or minus. In case 1 the company retains a profit of €150 at 25% or €100 at 50%, in case 2 the company loses €150 at 25% or €100 at 50%.
So what I earn has nothing to do with corporate tax rates, that's down to negotiation between me and the company. Either I am of benefit or not. Likewise what tax rate I pay does not affect the company's pre-tax profit.
Now let us progress to the tax paying step. Corporate tax rates here are lower than for middle income individuals and have been for a long, long time. The state decides it needs a particular sum of money. It has direct (wages, profit, etc) and indirect (excise, VAT, etc) taxes to call on.
Indirect taxes like VAT don't affect business to the same degree, they pay (retail price - wholesale price) x VAT rate while the individual pays at retail price x VAT rate. Excise duties are fixed (so much per gram of tobacco, bottle of wine, etc) and are passed on entirely to the consumer, the business only collects. For indirect taxes, excise has no real effect on a business other than accounting costs, VAT only a charge on product markup, while the individual is hit by excise and VAT in full.
Next direct taxes. Corporations pay lower rates than individuals. That means that as an individual I am paying proportionally more to support the state than a corporation even just considering direct taxes alone. Add in the indirect taxation, grossly skewed against the individual, means that I am being shafted in favour of corporations. Not only should I get what I get, I should have had less deducted in tax if corporations had been paying their fair share. So the poisoned fruit is not what I got, it's what I didn't get. There is a moral case that those who are poor should pay at a lower rate or none, I have no problem with that, but a low corporate rate reverses that and gives a lower rate to an entity that earns more than a average person earns. That is simply immoral.
BTW- tax rates aren’t immoral, they are economic decisions on how to fund a governmental entity and ultimately how to compete in a world market. What is immoral is generational welfare by the state and locking their people into hopeless poverty because they want their vote. A job with a high tax rate is better than no job.