Irish income tax compared to other countries

[Purple]

I understand that. And I spared you the fact that I bought in 2006 (or perhaps I just didn't want to face the same calculation).
However, that's just pure luck.

Much of our pension fund gain, or loss, is also down to luck or more particularly when we enter and exit the market, events which are often dictated by other factors.

I'm just making the point that taxing income heavily and not taxing wealth leads to a wealth owning class which had kind of pulled the ladder up after itself.

There might be tax paid later on via inheritance.

Yea, but that's paid by someone else. It's no different from expecting the person whom I buy a coffee from to not have to pay tax on what I paid them because I already paid tax on that money.

How do you tax that increased value apart from that? Pay CGT at 33 per cent now and force them to move...
I am not against property tax in general. However, it's then the value of the house that is taxed and not the unearned income.

Good point. We tax value rather than net wealth. It's hard to see a way of doing otherwise but I content that part of the reason a small number of high earners pay so much income tax isn't just because we remove low earners from the income tax system but because we don't really tax wealth.

It's a bit rich for a hypothetical older someone who is sitting in a house worth €1 million for which they spent €80,000, who is drawing a State pension which they didn't come close to funding, benefitting from massively subsidised health insurance etc to be lamenting the fact that people on low income don't pay much income tax.

 

[RainyDayFund]

I'm just making the point that taxing income heavily and not taxing wealth leads to a wealth owning class which had kind of pulled the ladder up after itself.

I completely agree with this.

It's a bit rich for a hypothetical older someone who is sitting in a house worth €1 million for which they spent €80,000, who is drawing a State pension which they didn't come close to funding, benefitting from massively subsidised health insurance etc to be lamenting the fact that people on low income don't pay much income tax.

And this

Ireland undoubtedly relies too heavily on income-based taxation compared to wealth or property-based taxes. That leads to intergenerational inequality and “asset lock-in.” The example of someone who bought a house cheaply decades ago and now benefits from accumulated, untaxed capital gains is fair and common. While it’s anecdotal, it highlights a genuine structural imbalance.

We have a significant problem in this country of taxing the ability for the current generation to attain wealth -- our low tax credits and high marginal tax rate, and our VAT rate of 23 percent (highly regressive, and one of the highest in the OECD, as highlighted by the first post report). It is difficult to make financial headway and build wealth from earned income alone while asset prices (especially property) continue to rise due to a mix of well-intentioned, misguided, and often fiscally Calvinistic policy choices by government and the Department of Finance.

When people talk about redistribution they are talking about income but both income and wealth should come into the equation. Most wealth in Ireland is unearned; it's come from capital appreciation of homes and pension fund growth. Ignoring property as a source of wealth growth places a disproportionate burden on income and sales taxes.

Absolutely! In this regard, I have some sympathy for the family home, even though I like that we (mostly) include it for CAT purposes. CAT is an important leveller for unchecked wealth accumulation.

Sadly, you can almost see what they are trying to do with rent pressure zones and new 6-year minimum leases etc. but its the unforeseen side-effects which are so dangerous.

And there is nothing Irish policy makers love to do more than double down even in the face of new evidence - its like ideology trumps empirical evaluation at every turn!

 

[Purple]

The example of someone who bought a house cheaply decades ago and now benefits from accumulated, untaxed capital gains is fair and common. While it’s anecdotal, it highlights a genuine structural imbalance.

I'm one of those people. I think it's grossly unfair that I pay virtually no tax on that gain.

It is difficult to make financial headway and build wealth from earned income alone while asset prices (especially property) continue to rise

Very well put. That is at the heart of so much of the social unrest we are seeing across the developed world. As those who aspire to the middle class dream, or those who grew up in it and expected to stay in it, are driven out of the property owning, asset holding class they will gravitate to the far left and far right (the same place for all practical purposes).

 

[blackdog]

The ROS self-assessment tax return process includes the option to disagree with the calculated assessment and submit one's own figure.
As far as I know, there's nothing stopping any individual from quantifying unrealised paper gains on assets such as their home and making an ad-hoc ex-gratia contribution, perhaps at the usual CGT rate.

 

[Purple]

The ROS self-assessment tax return process includes the option to disagree with the calculated assessment and submit one's own figure.
As far as I know, there's nothing stopping any individual from quantifying unrealised paper gains on assets such as their home and making an ad-hoc ex-gratia contribution, perhaps at the usual CGT rate.

What's your point?