May 4, 2009

NAMA's Fair But Tough Formula

NAMA's fair but tough formula for calculating property taxes on private houses and flats from 2010. These new taxes will bail out Ponzi Scheme sites in Poolbeg and elsewhere.

An = Number of pints of Beamish consumed
S = Smokiness of the Galway Tent [where 0 is clear air, 10 extremely smoky)
L = Luminance of 'patriotic property investor' (candelas per square metre)
Vo = Snellen financial acuity (6/6 normal; 6/12 just meets Green-FF standard)
d = Distance from Galway Tent (metres; 0.5 to 3 metres)
B = Known unknown

€450 Million in Property Taxes From 2010.


Anonymous said...

Here is some brass neck stuff from developers fleecing Irish taxpayers. See url for full text.


Developers urged to attend NAMA seminar

Galway Advertiser, April 16, 2009.

By Paul Mee, Tax Partner, Mazars Tierney

Why would a developer want to get involved in finishing a development where NAMA would insist on the full level of a loan being repaid?
It would be a shame if the NAMA concept worked and credit was freed up in the property sector but there were no property developers left willing or able to draw down that credit to do the work.

Anonymous said...

Murchu_an_tEacnamai wrote:
July 18, 2009 7:11

A solid factual report, but the conclusion on continued crisis-management probably understates the extent and range of the challenges facing the current government.

Just over 20 years the Cork University professor, Joe Lee, published a history of modern of Ireland that focused on the dominance of possession (of power, property, land, a rent-generating activity, a secure, pensionable job, etc) over performance. This is accompanied by, and reflected in, localised political clientelism, corruption of a soft and insidious variety, cronyism among the political, business and professional elites and corporatism advancing the interests of the management and staff of state-owned interests at the expense of the public. By examining the economic and social progress achieved by other small European countries, Joe Lee was able to conclude that this obsession with possession accounted for much of Ireland's relatively poor performance since independence in 1922.

Ironically, as Joe's book was being distributed a few enightened leading politicians decided that the possession of political power imposed an obligation to perform and the Celtic Tiger entered its birth throes.

For the best part of a decade a focus on performance worked its way through the Irish economy and society - with predictable results. But old habits die hard. The last decade has seen the return and dominance of the possessor principle with virulent force - and with entirely predictable results. Private and public resources piled in to inflate a property bubble ably assisted by government policy and the Irish banks - all of whom adopted the Northern Rock model. (The only minor blessing is that Irish banks avoided the toxic asset contagion that brought low so many of their counterparts in the large developed economies.)

The public sector grew like a bloated tick on this false boom - its growth enhanced by the establishment of herds of statutory and non-statutory bodies that diminished democratic accounability. Taxation receipts were increasingly linked to the size and number of property transactions.

The global credit crunch pricked the property bubble almost overnight and left property developers with near-to-worthless assets securing large loans and households with significant negative equity. The great deleveraging has begun as banks, businesses and households seek to rebuild their balance sheets. The resulting contraction of domestic demand and the requirement to prop up the banks has shredded the government's fiscal position. Limited budgetary changes to reduce public expenditure have squeezed domestic demand even further and the publication of a report by a group appointed to examine current public expenditure and job numbers (chaired, ironically, by a leading economist, Colm McCarthy, who performed a similar role 20 years ago) recommendends a furher €5.3 billion of cuts. The impact on domestic demand will be signifciant and no consideration is being given to an investment stimulus to compensate for private sector deleveraging or to excessively high prices resulting from serious failures of competition and regulatory policy. A death spiral beckons.