Corporation Tax, Nurses, Interest Rates ..

A few areas are in sharp focus for election 2007. Mr Aherne's house is slowly melting into the background. The Nurses are not. Tax harmonisation across Europe and attempts to do so is very dangerous for us here on this Island. As is an interest rate hike flagged for June.

First - the Nurses, they are going to ramp up their protests, especially if the threat of docked pay while on walk out arises. Though - the HSE have backed off on this for a few days yet. The hard nut to crack with this whole Nurses Strike / increased pay / less hours is to keep it inside the framework of SOCIAL PARTNERSHIP. Though - I get the feeling that the Nurse representatives do not care much for this as long as they get the increased pay and shorter hours. I may be wrong ....

Here I will have to state that I am in the private sector, I own a small web design company. From this vantage point I see anomallies in this SOCIAL PARTNERSHIP and the pay deals within. Two things us in the private sector DO NOT have are:

1. A guaranteed pensionable Job
2. A permanent job for life - guaranteed

These two items ARE NOT factored in to any pay deals, they are not given ANY VALUE and they should be. They are worth something surely.

NEXT - tax harmonisation across Europe and Corporation Tax. Since the mid ninties we in Ireland have enjoyed ever lower Corporation tax percentages. It is now set at 12% here.

What is Corporation Tax? In a nutshell it is a tax on what I call pure profit. When all other bills, wages, taxes, owings are all paid off what a company has left is pure profit. One would think that all the taxation should be over at this stage [ a reward perhaps, for risk taken running ones own company and maybe employing people ], but no, in comes Corporation tax. Another 12% of your pure profit goes to revenue.

Anyway, it seems certain quarters of Europe are jealous of our low Corporation Tax rate. It is one of the major reasons why large Multinational companies settle here providing HUGE EMPLOYMENT. Simply - they get to keep a larger portion of their pure profit. If we suseed to this European wide tax harmonisation we will have a major problem. Watch these multinationals slowly shut up shop and move on leaving vast unemployment in their wake. So please understand why this is a big issue for all us here in Ireland, even if you are a PAYE worker and not a company owner. Your employment could be threatened by higher Corporation tax rates.

Finally another thing that is chipping away at the average Joe / Josephine is the interest rate increases in the last while. Yet another is due in June, bringing the rate up to 4%, nice round figure. Not so nice really as it is constantly eroding the spending power of the average person [ who has a mortgage ]. No matter what the 'bank employed' economists on the radio say OR the auctioneering fraternity says, I believe this is the bigger reason behind the housing slow down we are seeing. Bigger than the stamp duty uncertainty. Even as it was - where I live - I notice more and more people are NOT moving house to a bigger abode. Instead they are BUILDING ON. Spending the potential Stamp duty amount they would incur if they sold on an extension. To me this makes more sense if one can do it.