T McGibney
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Asset price inflation does not increase wealth when the purchasing power of the underlying money value is eroding.
Asset price inflation does not increase wealth when the purchasing power of the underlying money value is eroding.Consumer price inflation destroys wealth. Asset price inflation increases it. That is especially the case when wages are static.
Those who house themselves have done so by sacrifice paying a mortgage, those who house themselves via renting is as a result of State in action. A recent report indicating there are 53k units in the rental sector availing of HAP and this is distorting the market. I specifically use the term "market" because thats what the private rental market is. It is not there to provide social housing which is what people on HAP need.We're quite generous to people who house themselves, in the form of an enormously valuable CGT exemption for the principal private residence. We're less generous to people who house themselves by paying rent.
And we're conspicuously generous to those who put money into pensions; our tax treatment of this is among the most attractive in the world.
Most states do; why wouldn't they? And, if your concern is with efficiency, that's a good thing; going for the easiest option is usually the most efficient way of collecting revenue (or, indeed, doing anything else).
It's more complex than that, I think. It also transfers wealth.Inflation doesn't actually increase wealth. It usually destroys it.
It does if it's inflating faster than the erosion of the underlying money value. The point is that property and stocks are twice as valuable as they were 15-20 years ago relative to labour. That's a direct result of QE and the intervention in the market by Central Banks after the 2008 crash.Asset price inflation does not increase wealth when the purchasing power of the underlying money value is eroding.
Given that we have seen about the OPW and what we continue to see in the Healthcare Sector I don't think anyone can, with any degree of credibility, claim that there isn't massive waste and inefficiency in the State sector.
That would be funny, just picturing musk arriving into the department of government expenditure waving his chainsaw around like a mad man. They would be in shock like Bishop brennan after fr Ted kicks him up the ass, they would refuse to believe it and think they were having a nightmare.Musk is looking for new job,
HAP may or may not be distorting the market, but it certainly isn't true that "those who house themselves via renting is as a result of State in action". There may be 53k rental units in respect of which HAP is paid, but that's only about 10% of all rental units and the occupants of the other 90% do not benefit from that. Indeed, if HAP is distorting the market they suffer from that. Renters, as a class, are not advantged by HAP.Those who house themselves have done so by sacrifice paying a mortgage, those who house themselves via renting is as a result of State in action. A recent report indicating there are 53k units in the rental sector availing of HAP and this is distorting the market.
We are massively generous on pensions. This is unarguable. It may be that this has the effect of "defusing the pensions time bomb", but all this really means is that pensions are signficantly funded by income tax payers (via the enormously valuable income tax reliefs given to pension funds) rather than by social insurance payers (via a higher social welfare pension). These are, of course, largely the same group of people.We are not generous on tax treatment on pensions as if it a one sided benefit to those who invest. This I am sure you understand is to defuse in as much as possible the pensions timebomb along with auto enrolment. Most of those who will receive a private and state pension will most likely return half of the State pension back to the state in terms of income tax.
The problem with State inefficiency and incompetence isn't the waste of money, it's the waste of manpower. We have loads of money, skilled labour is the main constraint across the economy and in the delivery of services in our society.I'm not sure many people are claiming this though. I am as sceptical of state spending ideologues as I am sceptical of the the "vast savings waiting to be made by cutting state spending ideologues" - combined with great efficiencies.
Don't kid yourself; a major life event is enough to upend things.Getting the right tenant
How does that work when the average house price in Dublin is about the same as in 2007 (18 years ago).The point is that property and stocks are twice as valuable as they were 15-20 years ago relative to labour.
Okay, post the 2008 crash.How does that work when the average house price in Dublin are about the same as in 2007 (18 years ago).
That's a key point about what is really wrong with our economy and our inability to staff hospitals and build houses, our "progressive " taxation policy and very generous welfare state.We have a chronic shortage of nurses and SNA's and plenty of other sectors face the same problem... and yet we have an abundance of trained SNA's and Nurses. They problem is that so many of them don't work fulltime. And they'd be mad to do so. If anyone thinks there isn't a link between the extremely progressive nature of our income tax system,
Yes.Keynes would disagree. The use of public spending to smooth the impact of external economic shocks (which would include smoothing their impact on revenue streams) is a core Keynsian tool of economic and fiscal management.
The problem with this theory is that the distribution of household income in Ireland, after tax and transfer payments, is about average for Europe.Many people have made the calculation that it is better to work part time or stay in lower paid (less strenuous and stressful jobs) because the tax and welfare system does not reward them for working more . . . Therefore people on middle incomes are paying higher tax relative to everything else than they would have 2 decades ago and more than their European compatriots.
Is it any wonder then that nurses builders and labourers have decided not to work 40 hours or more , or do unsociable hours etc because they are not rewarded by our "progressive " taxation system.
The problem with this theory is that the distribution of household income in Ireland, after tax and transfer payments, is about average for Europe.
Yes, we have a more-than-averagely progressive tax system. But we also have a more-than-averagely skewed wage structure — i.e. a greater gap bewteen the top and bottom earners, before tax and transfer payments, than is normal.
I don't think that they corollate to the extent that you are suggesting.Which in turn means that, if you work longer hours/take a more senior or more skilled job/whatever, even after paying tax, etc, you improve your material circumstances in Ireland about as much as the average European does.
The factor that drives that is our extremely generous welfare system.The one offsets the other, and the combined effect of the two is that the distribution of household disposable income in Ireland is close to the European average.
I think that is undoubtedly the case. We have a young population and we have more nurses per head than most European countries so why are we short of nurses? I suggest that high marginal taxes and the high cost of childcare are major factors. When the very generous welfare rates are added the incentive to work part time, if at all, is very strong.And, if it is true, we need to consider that factors other than the disincentivising effect of high marginal tax rates may be at work. For example, if Irish people opt to work part-time or to take career breaks, this may be partly attributable to the higher costs or poorer availabilty of childcare than is the case in other European countries. There'll be many other factors like this in play, and disentangling their effect may not be easy
Yes, women are far more likely to priorities quality of life over income. It's no accident that the sectors where the workforce is predominantly female are the ones with the biggest labour shortages. That's in no way a criticism of women (quite the opposite in fact) but a system that has developed over centuries to incentivise men to work isn't fit for purpose when it is used to attempt to incentivise women to work.Finally, we need to consider the welfare/wealth distinction. A person who works longer hours may be richer, but not necessarily better off. Governments tend to be focussed on GDP and similar figures, so they always want to to work longer, smarter, etc and will adopt policies designed to get you to do this. But your own choices may be affected by a wider range of considerations — you may think you'll be happier and healthier if you have less stress, and more time with your family, or doing what you enjoy.
It's the combined effect of our tax and welfare systems. For the very poor, and the elderly, the heavy lifting is largely done by the welfare system. But for relatively low-paid workers — say, people earing between 20% and 50% of average it's mostly the tax system.The factor that drives that is our extremely generous welfare system.
Well, it could also be that we have set ourselves up to need lots of nurses. We have 14.2 nurses per 1,000 people, as compared with, say, Germany (12.3), Denmark (10.5), Portugal (7.6). Does that look like we have a shortage of nurses to you? I think a factor here is that we have relatively poor primary care services, particularly public primary care services, so we rely heavily on hospitals, and that's nurse-intensive. So, actually, we could be just as good at attracting nurses into the profession as other countries, but we'd still experience that as a shortage.We have a young population and we have more nurses per head than most European countries so why are we short of nurses? I suggest that high marginal taxes and the high cost of childcare are major factors. When the very generous welfare rates are added the incentive to work part time, if at all, is very strong.
But the implication of this argument is that offering women more money (via lower marginal tax rates) won't incentivise them to work. You need to offer them a better quality of life — provide a healthy work-life balance and make work rewarding and fulfilling by means other than giving them more money. Which, ironically, would likely mean more part-time working, more career breaks, etc., and a workplace culture/structures which ensure that availing of these possiblities doesn result in a loss of status, career progression, promotion opportunities, etc.es, women are far more likely to priorities quality of life over income. It's no accident that the sectors where the workforce is predominantly female are the ones with the biggest labour shortages. That's in no way a criticism of women (quite the opposite in fact) but a system that has developed over centuries to incentivise men to work isn't fit for purpose when it is used to attempt to incentivise women to work.
Or more sharing of roles and responsibilities?Which, ironically, would likely mean more part-time working, more career breaks, etc.
That depends on whether those nurses are working, where they are working, what hours they are working and how efficiently they are working.Well, it could also be that we have set ourselves up to need lots of nurses. We have 14.2 nurses per 1,000 people, as compared with, say, Germany (12.3), Denmark (10.5), Portugal (7.6). Does that look like we have a shortage of nurses to you?
I agree. We are trying to fix a broken leg by putting a splint on the patients arm.But the implication of this argument is that offering women more money (via lower marginal tax rates) won't incentivise them to work. You need to offer them a better quality of life — provide a healthy work-life balance and make work rewarding and fulfilling by means other than giving them more money.
It might. And note that for the majority of Swedish taxpayers the combined marginal rate of income tax and social security tax is just under 64%, so clearly this model is compatible with very high marginal rates of tax.Maybe the Swedish model offers some insights?
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