May 26, 2010

A Tax Rebate Debt Amnesty

Posted in Your Ideas ·
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My idea focuses on providing a tax rebate to those of us who have some credit card debt or short term debt. Target the rebate to the type of people who spend as they earn and therefore turn any rebate into VAT while stimulating the economy.

They are the pockets the government needs to inject cash into if they are to rescue our failing retail sector, the failure of which could cause Ireland Inc to go bankrupt.

Its implementation could be kept very simple using a simple database and revenue letter. No need for a blue chip or expert group to be involved.

By clearing credit card debt or other short term facilities we free up credit lines for consumers. This spending should result in a return to the taxpayer directly through accumulative VAT and indirectly as the money filters through the economic system. It would also provide a boost in training centres and help re-skill the workforce, by training recently unemployed professionals currently on the dole.

We need to do something now. I reckon the end of this Summer will be too late to act. Our economy will have sunken into a depression. We have just seen the biggest EVER fall in retail sales. We have more and more people being registered unemployed. We need to act within the next 2 months to kick-start spending. Exports alone will not protect the domestic economy and tourism figures will be down. Our domestic economy could be headed towards the edge without an adequate stimulus package.

How many jobs must be lost before our government see the light and direct some stimulus and confidence towards the consumer.

You cant simply ask people to spend or banks to lend, we must somehow find a way to re-create the conditions where this might happen and if there is a global economic recovery we must ensure that we are still afloat when it occurs. Personally, i would propose that we fund such an effort by cancelling overly ambitious infratstrucural projects or by transferring funds from the state pension fund which lies dormant right now. The return to the exchequer should more than justify the cost of such a stimulus. A rough calculation would cost my initiative at around 8 billion. (It might also win over some voters and international confidence.)

I dont care how they do it, but this country needs some form of stimulus directed at the consumer and we need training options for our new unemployed who paid for the boom. Some variation of my ideas would might carve out a better plan but we do need one fast.

We do need to reduce public sector spending by 10-30% per annum immediatly but we also need a stimulus targeted at those who spend and at who are unemployed.

I propose direct intervention as follows:-

Dear Taxpayer,

Date Of Issue:
01/05/2009

Closing Date for Applications:
01/05/2011

As one of 2,000,000 PAYE taxpayers in Ireland in the previous 10 years you are entitled to claim the following tax rebate provided you qualify under 1 of four options below :-
€5000

Please select your option by ticking the box and your rebate will be issued provided you are deemed to qualify for the selected option.

If you fail to reply before the closing date, 01/05/2011, you will forfeit the rebate :-

1.) Pay off short term debt
You must nominate credit card account(s) or short term loan(s), for example a car loan or home improvement loan, to which you would like the rebate to be lodged.

To Qualify for this option:

You must be able to identify short term debt owed by you that exceeds €5000. The amount due must have been outstanding to an Irish financial institution as of 01/01/2009, or must be a loan issued for the consolidation of debts owed by you, prior to 01/01/2009.

Mortgage debt may not be included. Joint accounts require that the amount of debt due on the account(s) listed be divided equally among for the purposes of calculating the total debts owned by you, the taxpayer, as at 01/01/2009.

Enter account details below:-
Institution:
Account Number:
Amount :

Institution:
Account Number:
Amount :
Institution:

Account Number:
Amount :
Institution:

Account Number:
Amount :
Institution:

2.) Select this option if you have not selected option 1 or do not qualify for it i.e. have no short term debts.

The rebate will remain invested for you in a government pension fund whereby you will recieve a lump sum as part of your state pension when you reach pension age as part of your state pension and qualify for same when you reach 65.

To Qualify for this option:

To qualify for this option it will be required that you have not reached the state pension age by the date that your application has been processed.

3.) Select this option if you have not selected option 1 above and are already in receipt of the old age pension.

If you are already in receipt of a state old age pension, you still qualify for the rebate less any benefits already recieved if you have paid PAYE taxes of more than €5,000 in the last 10 years.

Any rebate due will be lodged to a bank account nominated by you, the taxpayer. Enter details below:-

Institution:
Account Number:
Amount :

4.) Select this option if you have not selected option 1, are in receipt of social welfare payments and want to attend an approved training couse or courses to the value of €5000, as approved by your local FAS office.

To select this option please bring this letter with you to your local FAS office along with your choice of course.

Your FAS officer will determine if the selected course qualifies for the payment.

You must return this letter by ticking one of the boxes above on or before 01/05/2011.

If you fail to reply before the closing date you will forfeit your tax rebate.

Call 01-1232456 if you do not understand this letter and need some help understandng it.

Best Regards,
Revenue