It's probably there to funnel money into state savings, because it is so unattractive to invest in other areas due to excessive and punitive taxation relative to peer countries like for example in simple ETFS an awful lot of money ends up on deposit by default which benefits the government.It probably hasn't gotten a mention because it's so small. Based on Revenue data it was the second lowest source of revenue out of a list of about 20 tax heads. It netted the Government a total € 14 million last year. Of course that will likely rise but it's never been a big contributor to tax receipts.
Looking back it was 20% for most of the Celtic tiger years. It's increase coincided with the crash i.e., we were broke and needed every penny we could get. It peaked at 41% in the period 2014-16. It has been reduced a couple of times since then.
Is it having an excessively distortional impact as it stands? Hard to see any signs of it being much of a disincentive as deposit in banks are high and growing. Low returns to households primarily reflect low rates on offer from Irish banks. Irish depositors are just not price sensitive.
Who would benefit from a reduction? DIRT is a relatively progressive tax. So cutting it will benefit the wealthier more so then those poorer households who have less savings. Of course the really well off probably don't keep a lot of their money on deposit.
Hard to see a DIRT cut getting much focus with a budget trying to help those suffering from a cost of living crisis. Likewise it's unlikely to win votes in the same way a change in tax rates/bands or an increase in pensions might do.
That doesn't circumvent the liability for DIRT.Any smart person has already taken their savings out of the Irish banking system.
The counter argument is inflation is high and the economy is potentially close to overheating/at capacity. The government has a role in countering that by encouraging savings/deferring consumption.Savings rates are way too high within the Irish economy. The last thing the Government should do is incentivise more savings. The last 15 years has seen a massive transfer and concentration of wealth to older people. They have way more than they need so they save it, taking it out of economic circulation, thus reducing the real living standards of working people. If anything we should be taxing savings more.
The best thing they could do is not reduce taxes but that's not populist and the crazy populist opposition and economically illiterate electorate will pounce on them if they do the right thing.The counter argument is inflation is high and the economy is potentially close to overheating/at capacity. The government has a role in countering that by encouraging savings/deferring consumption.
Yes, but they are still too high.On the savings rate I believe it has come down from the levels seen during the pandemic.
But you still have to pay dirt on it even if deposited outside the country. I think the ntma are aware of this and are raising the interest rates on state savings just enough so it is still not attractive enough to move deposits out en masse. I think they watch all this stuff like hawks because if there was a big move of deposits out well then that would affect the interest rates they have to pay when rolling over the massive national debtAny smart person has already taken their savings out of the Irish banking system.
If the government changed the ridiculous tax regime on Unit Funds they would reap the benefits of taxation on the higher profits they generate.
Have depositors got a better return that inflation at any point since 2014?Depositors can only get a return less than inflation
Money is not really a constraint anywhere in the economy. The lack of skilled labour is the problem just about everywhere.This could be done by making it worthwhile from a tax point of view, to for instance, invest in a scheme to build houses, clean energy etc.
Yes, but they are still too high.
That statistic about high savings here is always taken in isolation and never a wider examination of why this is . For example no studies have been done on the level of investments Irish people have outside of property or the size of their pensions in comparison to peer countries. If that was conducted it would show that Irish people have much lower pensions and investments compared to other countries.
It probably hasn't gotten a mention because it's so small. Based on Revenue data it was the second lowest source of revenue out of a list of about 20 tax heads. It netted the Government a total € 14 million last year. Of course that will likely rise but it's never been a big contributor to tax receipts.
Looking back it was 20% for most of the Celtic tiger years. It's increase coincided with the crash i.e., we were broke and needed every penny we could get. It peaked at 41% in the period 2014-16. It has been reduced a couple of times since then.
Is it having an excessively distortional impact as it stands? Hard to see any signs of it being much of a disincentive as deposit in banks are high and growing. Low returns to households primarily reflect low rates on offer from Irish banks. Irish depositors are just not price sensitive.
Who would benefit from a reduction? DIRT is a relatively progressive tax. So cutting it will benefit the wealthier more so then those poorer households who have less savings. Of course the really well off probably don't keep a lot of their money on deposit.
Hard to see a DIRT cut getting much focus with a budget trying to help those suffering from a cost of living crisis. Likewise it's unlikely to win votes in the same way a change in tax rates/bands or an increase in pensions might do.
That statistic about high savings here is always taken in isolation and never a wider examination of why this is . For example no studies have been done on the level of investments Irish people have outside of property or the size of their pensions in comparison to peer countries. If that was conducted it would show that Irish people have much lower pensions and investments compared to other countries.
The category of insurance, pensions and standardised guarantees was the largest instrument in three Member States: the Netherlands (64.9 %), Ireland (46.0 %) and France (34.6 %).
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