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Having so mismanaged its finances, Dublin now chooses loot private pensions.

There are a few problems with this, and not just the towering monstrosity of taxing already taxed income.

Apparently the move is to fuel government job creation schemes. Pension funds are invested to give a projected rate of return. A by-product of such investment is that jobs are created for others. In reducing the capital available for investment, job creation in response to natural and entrepreneurial demand will be stifled. In its place will be even more central planning and government distortion of economic calculation. As always with government job-creation schemes, much more will be destroyed than is created.

The temporary tax, it’s reported, will last for four years and be levied at 0.6%. No-one should believe this. It will not be temporary and the levy will increase over time. In the end the economic damage will enormous.

The very root of economic growth is saved capital. In denying ourselves consumption today for a return tomorrow we supply the kindling by which it can spark. Government attacks this very mechanism always, taxing from our tomorrow what is can consume today. Some of Ireland’s future unemployed will never know that measures such as these are those which kill employment prospects. To socialise the private debts of banks today and keep the government spending machine working, many will pay tomorrow.

The beast is always hungry. Where the rest of us must drastically reduce our consumption when in deep debt, governments will tax and spend. This is the case over much of the Western world. To change from such a disastrous course this fundamental fact of modern government must be realised by most people. Unless and until this happens governments will loot without end and real recovery will not happen.

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  1. This is a tax on the pension funds?

    And not on the pension benefits as they are collected by the pensioner?

  2. The international banksters are after the last remaining cash and real assets of the countries which they are plundering. Greece is being bressed to ‘privatise’ at knock-down prices its state-owned assets, including its land. The buyers of these assets will be the corporations which are owned by those who own the banks which set these same countries up for a fall. The peoples of Ireland, Greece etc are not responsible for the debts of the banks.
    Note that the drowning-in-debt countries are being given loans (yes – loans!!) to ‘help’ them. It’s like giving a junkie a huge big fix.

  3. That is a very dangerous road to be going down. Once they start down that road, they’ll think that they’re entitled to it forever. It will never be temporary.

    And lots of Irish workers are employed by multinationals. And a number of them presumably will be entitled to pensions from those companies, who won’t necessarily have the funding for said pensions in Ireland.

    So, if the above is correct the Irish taxman will tax ( punish ) those who kept assets in the country while he cannot tax what is beyond his grasp – pensions for Irish people which are funded in America, Britain, etc.

    The Irish budget geniuses just created one mighty incentive for pension funds to be funded anywhere else?

  4. It can only reduce the benefits – and I think that Pete would be the first one to catch on to that.

  5. There are a few problems with this, and not just the towering monstrosity of taxing already taxed income.

    From the article
    “The pensions referred to here were built up with massive tax reliefs over the years”

  6. Yes, but this gives a new double taxation on what will already be taxed ( presumably? ) when the pensioner gets his payout ( they are taxed then?)

    The tax deferral setup – similar to our 401Ks? – are done intentionally to create additional incentives for people to save for retirement.

    Ireland has just tampered with that premise for their own people. Dangerous step.

  7. FO –

    Noonan said the funds have been subject to “tax relief”, or, in plain English, such funds were not previously taxed. However, the capital in the funds has already been subject to tax.

  8. Also from the article “The sales-tax rate on tourism-related products and services will be cut to 9 percent from 13.5 percent”

  9. This is what comes from a corporation tax rate of 12.5%. And that low rate is only the start of it – there are numerous other breaks which make Ireland into a corporate tax haven on the scale of Bermuda.

  10. But without the low tax, wouldn’t they lose a number of companies and the jobs provided by them?

  11. Many of the companies they have are “brass plate” operations which employ only a handful of people and use their Irish company to launder vast profits made elsewhere, often for a zero rate of tax.

    There is an excellent analysis here of the other tax breaks in Ireland which are just as important as the headline rate of 12.5%. Scroll to page 9 for the bits that matter.

  12. Excellent comment here:

    “It’s perverse that the SNP wants to cut Scotland’s corporation tax rate to match Ireland’s. As the Belfast Telegraph reports today:

    Demands for higher corporation tax in the Republic won’t impact the future of Northern Ireland’s company tax rate. Most experts reckon the Republic will stand firm in defending its notoriously low 12.5% tax rate despite calls from France and Germany for a level playing field. The two countries have been putting pressure on the European Union to demand an increase in the Republic’s corporation tax rate in exchange for a decrease in the rate of interest Ireland pays for its bailout package of €85bn.

    Who’s leading the defence of tax abuse? Why, our friends at KPMG….”

  13. I too have no problems. Gordon Brown’s already stolen my future pension funds and ruined the economy for a generation.

  14. I e-mailed this article to my friends in the States,


    I put a warning in CAPITALS at the beginning: “DO NOT EAT OR DRINK WHILST READING THIS ARTICLE!” (unless you’re wearing a full suit decontamination suit.)

  15. They’ll need some help, tell them it means Obama take’s 10% of your 401K each year to give to people who haven’t bothered to get one of their own.

    That should give them the general idea.

    Rewarding the feckless and penalising the prudent…..thats considered ‘progressive’ in Britain. I consider it’s pure COMMUNIST THEFT myself.

  16. Trust FO to know the price of everything and the value of nothing.

    Let’s say it’s for illustrative purposes only.

  17. Peter

    Thanks for that. I read some of it last night and was impressed. I have set it aside so as to read it in quiet time.

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