Indo - "There is no cost of living crisis for majority of people in Ireland says IBEC CEO"

[faketales]

Left's proposals for higher taxes on higher earners

I’m generally left leaning but the issue I have is the left position of higher taxes on higher earners doesn’t seem to consider where we are now. That would be the position regardless of where we were.

The low tax on lower incomes also creates issue around budget times particularly if there are tax cuts because there is often nothing for the low income person as well they pay very little.

 

[rungun]

List of crisis;
Cost of living crisis.
Healthcare recruitment and retention crisis.
Teaching recruitment and retention crisis.
Housing crisis.
Rental cost crisis.
...add as appropriate.

Then there's the epidemics:
Road deaths epidemic (despite it being less than 10% of what it was 40 years ago)
Suicide epidemic.
Drugs epidemic.
Rural crime epidemic (also a crisis)
Urban crime epidemic (not a crisis)

I'd agree with this in general on hyperbole, except it definitely is a rental crisis. I've never subscribed the housing crisis terminology because imo house prices haven't really been over the top (I think in the last year it has become doughy though). The reason people couldn't afford to buy wasn't house prices, it was because of rental prices and availability that didn't provide people security and the ability to save in such a way that they can build a life.

To my mind, once you get beyond a couple of years of tangible and quantifiable metrics to judge something objectively badly, then it is fair to call it a crisis. With something like healthcare, there are so many different metrics to judge it on but all my life of consuming media, there has been a "health crisis". And yet underneath all of that we have seen improvements across nearly every important healthcare statistics.

For renting, we have objective evidence of the issues it has caused. This isn't some rubbish of people taking a low point of 2010 and comparing to 2025, but actual hard data that shows there's an affordability and supply issue (OECD data published earlier vs. median salaries is the most potent).

Blaming millennials for avocado toast and concert tickets and then not owning a home is OTT. We can't ignore that this was the generation that went from the worst of the Global Financial Crisis in terms of employment and opportunities to massive rental inflation. There is scores of data points out there that shows how that age group have done worse in terms of incomes (in the US) and have massive arrested development (delayed family formation, late age of acquiring homes, less children) than what came before.

I do find it somewhat funny when we see 20 somethings as like coffin ship types though. Whilst I believe they are stuck in a terrible rental market, they do have significantly more options than those in the generation before them. They have so many more options in terms of state supports. Yes it's a lottery for some of them, but throw your name in young. At 22 you have years to plan something. I'd be more concerned on how that generation does versus AI than their longer term housing prospects.

 

[Purple]

I agree with your post in general.

I do find it somewhat funny when we see 20 somethings as like coffin ship types though. Whilst I believe they are stuck in a terrible rental market,

I agree on the rental market in particular.

they do have significantly more options than those in the generation before them. They have so many more options in terms of state supports.

I strongly disagree on this. I accept that they have plenty of extra State supports but I think that the necessity for those state supports to be there in the first place is indicative of disfunction.

Anthony Scaramucci has a great line about the advantages of living in the modern world; would you like to live in Manhattan on $120,000 now or live in Manhattan on $120,000 in 1925? In 2025 you'd have a low disposable income and live in a small apartment. In 1925 you'd be in the top 1% of earners and have a lavish lifestyle. You'd also have to put up with disease, dirt, smells, bad plumbing, no showers, no TV, no internet, bad healthcare, bad dentistry, very limited international travel, massive levels of State corruption, etc.

All that said there's an implicit contract between young people and their parents generation that if they work hard they will get their chance at the middle class norm of owing a home and being financially independent.
My generation (50's) and more particularly my parents generation broke that contract by mortgaging their future to avoid the consequences of our greed and ineptitude.

 

[Fortune]

Blaming millennials for avocado toast

.

we see 20 somethings as like coffin ship types

Millennials are not in their 20s

 

[joe sod]

At around the median wage (of €50k) I think we come out close to par for what a social democratic country would expect, possibly a bit less. They have significantly more tax home than a Germany but about the same as Sweden. I think when you add up the quality of services and other stealth taxes that you'll find we are fairly in the middle, on balance.

This is often repeated but doesn't make it true, you can calculate it up using simple sums and conclude that Ireland takes similar tax as other oecd countries. However we have a prsi system that in theory offers universal health care but is not free at point of contact and compels most people on 50K a year to take out private health insurance which now costs 2000 euros per adult. You would also need to add on another 1000 euros to pay for doctor and dentist visits which are also not free unlike our contemporaries. Then you have high VAT and among the highest energy and utility costs (provided by inefficient state sector). These are all effective extra taxes that are never properly accounted for. Also MUP on alcohol etc etc,

 

[faketales]

All that said there's an implicit contract between young people and their parents generation that if they work hard they will get their chance at the middle class norm of owing a home and being financially independent.
My generation (50's) and more particularly my parents generation broke that contract by mortgaging their future to avoid the consequences of our greed and ineptitude.

I’m not sure that argument holds up for young people anymore. Say someone coming out of college today at 22. They would surly have memories of the crash and be well aware of the housing situation. They didn’t grow up in a time of continuous opportunity improvement.

I actually think those aged around 50 have had the best run.

Coming of age in 1990. There was a sense of optimism and continued improvement. Still some very good pensionable jobs about. Buying a house by the early 2000s when they turned 30 was very doable. Might even grab a 100% mortgage if they had no savings. Pretty well settled in a career and not a crazy mortgage by the time the of the crash. Could take advantage of the SSIAs.

Still young enough to embrace smart phones, cheap travel and improved health care.

Early retirement will be an option for many and they can expect that the state pension should still be functional once they get to retirement as the worst of the demographic collapse won’t have occurred.

Every gen will have its ups and downs and it’s hard to judge until you get to the end of the line but I think those say 50-55 at the moment hit the sweet spot.

 

[rungun]

I strongly disagree on this. I accept that they have plenty of extra State supports but I think that the necessity for those state supports to be there in the first place is indicative of disfunction.

Anthony Scaramucci has a great line about the advantages of living in the modern world; would you like to live in Manhattan on $120,000 now or live in Manhattan on $120,000 in 1925? In 2025 you'd have a low disposable income and live in a small apartment. In 1925 you'd be in the top 1% of earners and have a lavish lifestyle. You'd also have to put up with disease, dirt, smells, bad plumbing, no showers, no TV, no internet, bad healthcare, bad dentistry, very limited international travel, massive levels of State corruption, etc.

All that said there's an implicit contract between young people and their parents generation that if they work hard they will get their chance at the middle class norm of owing a home and being financially independent.
My generation (50's) and more particularly my parents generation broke that contract by mortgaging their future to avoid the consequences of our greed and ineptitude.

I am not disputing there is dysfunction.

But there simply are more options than there was 10 years ago for someone in their early 20s and arriving into the rental market.

Millennials are not in their 20s

I didn't say they were. I drew a distinction between the two as "generations".

 

[Purple]

I’m not sure that argument holds up for young people anymore. Say someone coming out of college today at 22. They would surly have memories of the crash and be well aware of the housing situation. They didn’t grow up in a time of continuous opportunity improvement.

I actually think those aged around 50 have had the best run

Coming of age in 1990. There was a sense of optimism and continued improvement. Still some very good pensionable jobs about. Buying a house by the early 2000s when they turned 30 was very doable. Might even grab a 100% mortgage if they had no savings. Pretty well settled in a career and not a crazy mortgage by the time the of the crash. Could take advantage of the SSIAs.

Still young enough to embrace smart phones, cheap travel and improved health care.

Early retirement will be an option for many and they can expect that the state pension should still be functional once they get to retirement as the worst of the demographic collapse won’t have occurred.

Every gen will have its ups and downs and it’s hard to judge until you get to the end of the line but I think those say 50-55 at the moment hit the sweet spot.

Yes, that's the point I'm making.

 

[Purple]

But there simply are more options than there was 10 years ago for someone in their early 20s and arriving into the rental market.

Other than being able to actually rent a place.
The supports are an attempt to mitigate the dysfunction in the market. It's better to remove the dysfunction and not have supports.

The State, to a very large degree, created the dysfunction by interfering in the supply side. Now they are doing the same thing on the demand side. It would be better if they just got out of the way, other than having efficient enforcement of minimum standards, and let the market function.

 

[TomEdison]

This is often repeated but doesn't make it true, you can calculate it up using simple sums and conclude that Ireland takes similar tax as other oecd countries. However we have a prsi system that in theory offers universal health care but is not free at point of contact and compels most people on 50K a year to take out private health insurance which now costs 2000 euros per adult. You would also need to add on another 1000 euros to pay for doctor and dentist visits which are also not free unlike our contemporaries. Then you have high VAT and among the highest energy and utility costs (provided by inefficient state sector). These are all effective extra taxes that are never properly accounted for. Also MUP on alcohol etc etc,

Yeah, but then the comparison with other countries starts to become difficult, or even invalid

For example, if take the cost of health insurance/medical treatment into account on the Irish side, then on the e.g. German side you have to take into account the social insurance contributions that are levied to support the German health system — these are much higher than in Ireland. You also have to take into account the point-of-use charges levied in Germany and other comparator countries — these are not as high in Ireland, but they're also mostly not zero, as in the UK.

When it comes to things like energy and utility costs it's a bit glib to say that the higher charges are due to "an inefficient state sector". This is only partly true; higher costs also result from the smaller size of the Irish market and the lower population density; you can't claim these as hidden taxes.

Comparing countries' tax systems on the macro level is quite easy — Ireland collects X% of GNI* in taxes, and this is broken down between income taxes, social security tases, capital taxes, property taxes, etc in ascertainable proportions, which can validly and meaningfully compared with the same analysis for other countries. But when you trie to break this down on a micro level it falls apart very quickly — for example, if you want to compare the tax treatment of an individual earning €50k in Ireland and Umbrellastan, the comparison may be hugely affected by whether you assume the individual is married or not. You also have to make decisions like "do we attribute any present value to the extremely generous tax concessions that Ireland provides for pensions, or do we treat these as not accruing until pensions are actually received? Or do we just ignore them?" And that's before we look at implicit taxes embedded in things like health insurance premiums, train fares, electricity costs, etc. This rapidly becomes more of an exercise in validating preconceptions than a genuine comparison of tax burdens.

 

[ClubMan]

Millennials

And, in any case, lazily slapping (social and traditional) media driven labels on cohorts that only have an age range in common is a facile exercise.

 

[Fortune]

compels most people on 50K a year to take out private health insurance which now costs 2000 euros per adult. You would also need to add on another 1000 euros to pay for doctor and dentist visits which are also not free

I think you're overpaying quite a bit there