Gold strike in Ireland: private pensions

 

When Irish smiles are eyeing ... pensions.

Which thumb do you want, in which of your eyes?

There are not enough prosperous businesses to tax. Houses sit empty. Even government can't hire enough of the population to keep people off the dole. Where does The State turn for revenue?

In a move many distinguished paranoid conspiracy theorists predict will soon be standard operating procedure in the United States, the Irish government has shown the way. It has found its shamrock: private pension plans.

From An Roinn Airgeadais -- Ireland's Department of Finance to the non-Gaelic among us -- comes this announcement:

The various tax reduction and additional expenditure measures which I am announcing today will be funded by way of a temporary levy on funded pension schemes and personal pension plans. I propose that the levy will apply at a rate of 0.6% to the capital value of assets under management in pension funds established in the State.

It will apply for a period of 4 years commencing this year and is intended to raise about €470 million in each of those years. The levy will not apply to pension funds established here and providing services and benefits solely to non-resident employers and members. Further details regarding the proposed application of the levy are set out in the Summary of Initiative Measures.

Got that? If you are a son or daughter of Eire, your paycheck has been taxed at some rate that doesn't bear thinking on all your working days. Out of the pension you fondly trust to shelter yourself from the cold winds of old age, the government is going to help itself to 0.6 percent of that (annually, if I understand the statement). Only temporary, for four years. After that it'll be 1 percent. Then ... I don't have to paint you a landscape, right.

"Temporary" is defined, in the Official Government Dictionary, as "until we extend it." Well, it's a "levy" -- feel better now? Sounds a much sweeter note than "confiscation."

Unwilling to budge on the country's low corporate tax rate, Enda Kenny's Irish government has chosen to target pensioners for funds to grow the economy. Whether it turns out to be an example to other countries seeking alternative ways to raise revenues with aging populations is yet unknown.

Don't count on it being unknown in the United States past the next presidential election.