Friday, 22 January 2010

Developers' Special Incentive Tax Rate costs €800 million.

Bertie Ahern, Eamon O’Cuiv, Bono and Charlie McCreevy are the four apocalyptic horsemen of the blog, galloping ahead of the plentiful field in the Featuring on Gombeen Nation Stakes.

One of them, Ahern, today defended a Fianna Fail tax dodge introduced on his watch for the party’s developer buddies: the Special Incentive Tax Rate. The break allowed developers to pay tax of 20% on their landbanks, rather than the previously applicable rate of 42%.

The move was ostensibly intended to “encourage” developers to release their landbanks for building. Nonsense of course, as with any of the other property tax measures, the builders/developers simply waited and sold their assets at whatever inflated amount the banks were prepared to recklessly advance to buyers, then pocketed the extra profit.

Ahern is quoted defending the squalid scam to RTE by saying that “the place was disastrous” when the tax incentives were introduced. Well it's a lot more "disastrous" now, Bertie, isn't it?

What he also neglects to acknowledge is that this particular measure was introduced in 2000 (it may even have been 2001) when the property bubble was already inflating alarmingly. All in all, the Special Incentive Tax Rate cost the exchequer €800 million by the time it was finally scrapped in 2009, while also contributing to unsustainable asset price inflation.

And which finance minister introduced it? Yes, fellow horseman Charlie McCreevy. He, along with Ahern, of course, recently denied they had any part in creating the current economic mess.

And I thought the horse wore the blinkers.

Back to Gombeen Nation main page


Anonymous said...

Nothing Changes in Politics.

Before Christmas, I was at a medical conference in Harrogate. Two ladies were chatting. I heard on lady say, "You see the Conservatives have a better quality of corruption, and their lies are much more convincing, and they never flinch"

The other lady said "Well I suppose it's their breeding and schooling and they have centuries of practice and have more guile than the others.

Surely this same concept could not be true of Fianna Fail,The Party of Purity; could it?

PJ McFall
York UK

The Gombeen Man said...

The Party of Pure Shysters, PJ. I think they have it down to a fine art, at this point. What worries me is the support they enjoy - and what that says about us.

Anonymous said...

The epitaph of the Celtic tiger is Fintan O’Toole’s excellent book’ Ship of Fools- how greed and corruption sank the Celtic tiger’. This should do for FF what ’Hall’s Pictorial weekly” did for a corrupt 70s coalition Govt here ( ironically I think they were succeeded by FF) ,what Spitting Image did for English Conservatives , &what that great USA comic Sarah Palin did for the Republican presidential campaign- should be read by all. BEST thing about it is its brevity- ( I read most of it on Sat). I also read another masterful tome on the economics of house price collapse, by an Irish economics expert- this was Ireland’s house Party, the writer was Derek someone, excellent, V long and a lot of dense foot notes etc- and only concentrated on house price corruption .
Fintan’s masterpiece, concentrates on all corruption and pandering to the rich over 15- 20 yrs,& is written in clear short sentences. Yet he somehow manages to get startling stats seamlessly woven into the narrative. There are often many funny bits , and a great characterisation of Bertie- the / reality/ soaps opera star with chick-lit daughter & pop star son in law, the man we think is one of our own, the football fanatic- but the one who conceals his money grabbing nature all along. He describes some of Berties more bumbling pronouncements as making George Bush sound like Abraham Lincoln. The book was pub, around Dec 2009 so it well covers the banking scandal - publisher Faber & Faber London, thereby ensuring a global readership. On reading this I was amazed ( with the siphoning off of the nations money in one tax scam after another by the rich) that the bankers finally found anything left to steal.
The most important published work in the development of Irelands nationhood since the proclamation( only slight exaggeration) .
In the name of God and of the dead generations who have been screwed by our own home grown corrupt politicians , I urge you to read this book. A masterpiece of compression, readability and ironic wit. I got thru most of it on Saturday. I got it from Library …2000 of my pay last year went to the bankers ( that’s real hard cash…after deductions) and I will lose 5000 in hard cash this year …wont be buying books for another while…need money for food & rent ..Anna

The Gombeen Man said...

Looking for something to read at the mo' Anna. That's sorted, so.


Anonymous said...

‘Liberty, Equality, Fraternity’- motto of French Republic
‘Only Little People pay tax*’- motto of Irish republic (* this was adapted from a famous ‘80s quote from New York trial of Leona Helmsley, rich bitch, V successful hotelier …and decades long tax avoider). Ms Helmsley was an amateur compared to an Irish developer in F O’Toole’s book..who paid no tax for 18 yrs, while his many companies built 30 large developments in Dublin…with ghosts for staff.. as none of these companies ever paid employer’s tax or PRSI…as no employees were listed. This man’s stated (taxable) income was so low that when he sold his €3 million home he did not pay tax on the sale- as he was well below the income tax threshold.
Part of Ireland’s problems (I think) was not due to the English arriving – but that not enough French did.,Would they put up with the thieving scoundrels we do? Quelle Horreur! I suggest we encourage a lot more French to come here, at least 500,000 to begin with, to set up franchises in the business they do best ( Revolutions Sont Nous/ Revolutions ‘R’ Us) in every village in Ireland. Millions of French were on the streets last year when very small cuts in public spending were proposed- I doubt if they went thru. Meantime, even 4 years ago, my French flat mate was amazed when no one here protested over a hefty increase in gas rates. More French please. Dieu bless them- Anna