Cowen set to reject stamp duty reform demands

[TheBear]

From The Irish Times:

• Minister for Finance Brian Cowen will reject demands for house stamp duty reform in Wednesday's Budget, though extra mortgage interest relief is to be offered to first-time buyers. Mark Hennessy , Political Correspondent, reports
  
  Mr Cowen is to cut the top rate of tax by 1 per cent to 41 per cent, following better than expected exchequer tax returns last month that showed the arrival of an extra €2.5 billion into the State's coffers.
  
  Getting ready to publish one of the most generous budgets in the State's history, Mr Cowen insists that stamp duty changes now would fuel house prices just as there are signals that they are tapering off.
  
  Under Mr Cowen's plan, a single person would be able to claim mortgage interest relief of up to €8,000 at the 20 per cent tax rate, while couples would enjoy a €16,000 threshold - double the existing figures.
  
  Last night the Progressive Democrats emphasised that the party leader, Michael McDowell, had never sought changes in stamp duty during the lifetime of this administration.
  
  Following the publication of last week's exchequer figures, Mr Cowen will be able to disburse up to €2.75 billion and still predict a 1 per cent budget surplus this year.
  
  The 1 per cent tax cut - which would partially honour the commitment to bring the top rate down to 40 per cent during the lifetime of the Government - would cost €155 million next year and €230 million in a full year.

From www.RTE.ie:

• Taoiseach Bertie Ahern has said there will be no 'give-away' Budget on Wednesday and that 'prudent management of the economy' will continue.
  
  Speaking in Dublin yesterday ahead of Wednesday's budget, Bertie Ahern said the Government wanted to help people who require assistance, including those on welfare and pensioners.
  
  He said getting the state pension up to €200 a week is among the Government's priorities.
  
  Meanwhile, figures from the Department of Finance on Friday showed that the Economy is delivering big time for the Government.
  
  The figures showed that in November alone the taxes collected by the Exchequer amounted to €2.2 billion more than expected. That is on top of the very sizeable gains recorded in the previous ten months and ensured a massive improvements in the public finances with just days before the budget for 2007.

These changes will be coupled with an increase in tax credits, in the tax bands, in child benefit, in mortgage relief.

The government trying to keep the electorate sweet?

[Whig]

This is a sensible budget, it just so happens that we're fortunate that we can spend this money in the pre-election budget. As McDowell said, stamp duty reform was an objective for next year. Though we certainly would have been glad to see it, it wasn't part of the programme for government, so there was no specific madate for it, whereas there was for adjusting the tax bands. That is important to do, to take account for inflation. The money is there for this, so it should be done. The increase in the pension is significant, it's now around 2/3 of week on the minimum wage.

[TheBear]

As McDowell said, stamp duty reform was an objective for next year.

That's not what he said. The quote is "Last night the Progressive Democrats emphasised that the party leader, Michael McDowell, had never sought changes in stamp duty during the lifetime of this administration." That means that you haven't asked for it in the past nine years, not that you're going to ask for it next year.

Though we certainly would have been glad to see it, it wasn't part of the programme for government, so there was no specific madate for it...

Hasn't always stopped you before...

[FutureTaoiseach]

It was always made clear that the stamp-duty proposals were for the next GE. A cut in the top-rate of income tax will be a partial victory but a weaker FF after the election will be more dependent on the PDs if they return to govt and therefore more likely to budge on stamp-duty assuming Labour don't go in with FF. Paralysed by a 1992 timewarp, I am pretty certain they won't.

[Dunny]

What is this bleeding fascination with Labour and 1992??

The reason Labour got destroyed in 1997 was becasue they pulled the plug on a successful and well liked government in 1994, not becasue they went into coalition with FF. If they had not done this, there would have been another GE and people would have been very pissed off about that

[galileo]

Last night the Progressive Democrats emphasised that the party leader, Michael McDowell, had never sought changes in stamp duty during the lifetime of this administration.

I have never made but one prayer to God, a very short one: 'O Lord, make my enemies ridiculous.' And God granted it. - Volte Face ( actually Voltaire )

[shannonBlueShirt]

What is this bleeding fascination with Labour and 1992??

The reason Labour got destroyed in 1997 was becasue they pulled the plug on a successful and well liked government in 1994, not becasue they went into coalition with FF. If they had not done this, there would have been another GE and people would have been very ****** off about that

Dunny,

You got it wrong here the reason LAB were punished was because they went in to coalition with FF after spending the pre election period attacking FF... It was seen as a betrayal...

I have this link
http://www.answers.com/topic/irish-gene ... ction-1992
but I cannot get newspapers or RTE Articlesthat go back that far...

and that government was not successful it was up to its neck in scandal , did the Beef Tribunal kick off then...the first of many Tribunals…

[MichaelHennigan]

It was always made clear that the stamp-duty proposals were for the next GE. A cut in the top-rate of income tax will be a partial victory...

A victory indeed - a radical and brave policy stance like the one on stamp duty.

The Government collects about an average of €100k in taxes and levies on every new housing unit built in the State.

First Time buyers have to pay vat @13.5%. There is no VAT on new property in the UK.

The take from VAt on property is double that of stamp duty.

Then there's the corrupt system that gives a bonanza to farmers who sell land for development.

More

[Biffo]

It was always made clear that the stamp-duty proposals were for the next GE. A cut in the top-rate of income tax will be a partial victory but a weaker FF after the election will be more dependent on the PDs if they return to govt and therefore more likely to budge on stamp-duty assuming Labour don't go in with FF. Paralysed by a 1992 timewarp, I am pretty certain they won't.

Rubbish, if the minister redcues the top rate of tax slightly it will be because he considers it appropriate (I personally dont believe it to be necessary) and not because the PDs have been rumbling about it.

Stamp Duty is becoming a national obsession and the impression has been left that if the minister goes into the dail on Wednesday and reduced the rate by a couple of percent then the reduction will be passed on, which is not the case - It would be reckless business. Any reduction in the rate of stamp duty would need to be introduced gradually over a period of say 3-5 years in my view. One thing is for sure the minister will be drafting his budget based upon what he thinks is appropriate and not what the tanaiste has been saying.