I seems that the PN is now in a panic over Income Tax. Now Dr. Gonzi says that he intends lowering the highest tax rate to 25% for incomes under € 60,000. However this proposal smacks of panic rather than a well thought plan. GonziPN is reacting rather than controlling the agenda.
First of all I am mystified how the shortfall in Government revenues can be made up from other sources. Secondly what about the corporate tax rate of 35%. People will remember Mintoff's infamous old section 16 orders when the personal tax rate was 65% that is much higher than the corporate rate of tax. One of the best moves in tax occurred when the personal rate and corporate rate where brought in line at 35%. The full imputation system of Corporate tax would have to be abandoned. I bet the Inland Revenue would be inundated with requests for the 10% refund on tax at source on dividends.
I can't believe that I am complaining about a reduction in my tax bill. Yet to be honest this idea is less than half baked and born out of panic. Gonzi should do better than this. There are ways that could improve the taxation system.
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6 comments:
Income Tax rates have been reduced for two years in a row now and in his Budget speech last October the PM promised more. Indeed, what is surprising here is that no reference was made in the PM's proposal to his other hope, expressed in the last Budget speech, of getting to the point where the first Lm5,000 are tax-free. Although I do not have the numbers at hand I wouldn't be surprised if that turns out to be more radical than extending the 25% band all the way up to €60,000.
You are right on corporate rate. But the PM did not say he wouldn't keep it in line and, considering that the 25% rate would stretch for quite a bit I wouldn't be surprised if it were to apply equally to corporate tax.
My point is that this is not a well thought out plan and made on the spur of the moment. You do not deny that.
Since the 35% personal rate remains, there would still be a problem with a 25% corporate rate. This has not been thought through. I take it with a barrel of salt.
I do not deny that this could be a rash proposal because I do not read minds. It could very well be that you're right but then, allow me to remind you again, income tax rates have been going down and in the last Budget the PM hinted at more and more radical changes than the one he has come with in the campaign.
I've added your blog to my blogroll. It would be nice if you were to reciprocate.
Dear Fausto
No problem to add you on the blogroll except I am not familiar how to do that. Would appreciate your guidance. Do you have a blog? Where can I find it?
My blog is here.
To add other blogs to the blogroll you have to edit the template. To do that you have to know some html, which is not difficult at all. However, if you were to use a different template it would be easier to see what and where needs to get changed. Do experiment around and, don't worry, changing templates does not mean anything of what you've written is lost.
You may also wish to start using a news/feed aggregator. This gives you whatever is new on blogs in one site without having to visit each and every blog. Just create an account with, for example, newsgator or bloglines and add the feeds (blogs or news services) you want to receive updates about.
Thanks Fausto. I did get to your blog last night. I will try and experiment this evening.
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