… in Ireland. In a desperate attempt to shore up their debt woes, the Irish government plans to tax private pension plans.
The Irish government plans to institute a tax on private pensions to drive jobs growth, according to its jobs program strategy, delivered today.
Without the ability sell debt due to soaring interest rates, and with severe spending rules in place due to its EU-IMF bailout, Ireland has few ways of spending to stimulate the economy. Today's jobs program includes specific tax increases, including the tax on pensions, aimed at keeping government jobs spending from adding to the national debt.
The tax on private pensions will be 0.6%, and last for four year, according to the report.
Now how exactly this is supposed to drive up jobs growth remains a mystery to me. Whoever is writing this article seems to believe that only the government is capable of stimulating the economy: “Ireland has few ways of spending to stimulate the economy.” Apparently it hasn’t occurred to some folks over there that allowing the people who actually produce the wealth to stimulate the economy through spending might be a better way. That, though, doesn’t empower government. So, what do you want to bet that this tax will last more than four years? In fact, I would be confident to say that it will become a permanent tax. Once that money is allocated in the form of taxes, it then becomes government gospel that that money “belongs” to government, and any move to allow those who earned it to once again keep it will be couched as the promotion of greed. Amazing how that works, isn’t it?
Also something interesting to note about this proposed plan in Ireland:
The levy will apply to defined-benefit pensions, defined-contribution pensions, personal persons, the pensions of the self-employed and PRSAs (personal retirement savings accounts).
However, it will not apply to those who have public sector pensions.
Ah so it seems as though the Irish are willing to fund this on the backs of its private sector worker, but exempt its precious government workers from having to pay the tax on their pensions.