Irish Times "CGT exemption on family home at risk in the Budget"

[Gordon Gekko]

https://www.google.ie/amp/s/amp.ind...-of-family-homes-after-backlash-35999210.html

Our Leader has ruled this out.

 

[jjm]

The watering down of the LPT showed it is no longer seen as a fair national tax it is now open to abuse the county with the lowest LPT will still get money from central funds possibly coming out of the pockets of the people paying the highest
LPT,
On the post -colonial thing when you look at the smoking ban it did not seam to matter seen to be fair is the problem when the stood up to the TD who broke the smoking ban in the Dail the people supported it without question,Its all down to trust,

 

[Philip S]

The watering down of the LPT showed it is no longer seen as a fair national tax it is now open to abuse the county with the lowest LPT will still get money from central funds possibly coming out of the pockets of the people paying the highest
LPT,
On the post -colonial thing when you look at the smoking ban it did not seam to matter seen to be fair is the problem when the stood up to the TD who broke the smoking ban in the Dail the people supported it without question,Its all down to trust,

Is their not something about if you reduce your rate of LPT you cannot get or are limited in funds you get from the central fund

 

[torblednam]

All messing about sacred cow metaphors aside, I'm still waiting for someone to explain to me what the problem in principle is with a PPR being potentially subjected to some level of CGT.

 

[T McGibney]

All messing about sacred cow metaphors aside, I'm still waiting for someone to explain to me what the problem in principle is with a PPR being potentially subjected to some level of CGT.

There's never much problem in principle with any new tax. The problems arise in practice. This suggestion if acted upon will have devastating effects on families and on the availability of housing.

 

[odyssey06]

All messing about sacred cow metaphors aside, I'm still waiting for someone to explain to me what the problem in principle is with a PPR being potentially subjected to some level of CGT.

In principle, I object to all forms of taxation and they are borne under sufferance and any tax must be justified. It is not the exemption that needs to be justified, it is the tax that needs to be justified to convince the people why it is necessary.
Also I think all new taxes require a mandate from the people i.e. they should be part of election manifesto. Otherwise they are illegitimate and as far as I'm concerned civil disobedience of them is morally justified.

 

[torblednam]

There's never much problem in principle with any new tax. The problems arise in practice. This suggestion if acted upon will have devastating effects on families and on the availability of housing.

That's the second time you've said that, and apologies if I'm being a bit thick, but how exactly would this happen, in practice? Even if there was a rollover relief and a tax free threshold for gains?

 

[torblednam]

In principle, I object to all forms of taxation and they are borne under sufferance and any tax must be justified. It is not the exemption that needs to be justified, it is the tax that needs to be justified to convince the people why it is necessary.
Also I think all new taxes require a mandate from the people i.e. they should be part of election manifesto. Otherwise they are illegitimate and as far as I'm concerned civil disobedience of them is morally justified.

That might be your view, but unfortunately it's not actually supported by law, and you don't seem to understand how our constitutional democracy works.

 

[Early Riser]

In principle, I object to all forms of taxation and they are borne under sufferance and any tax must be justified. It is not the exemption that needs to be justified, it is the tax that needs to be justified to convince the people why it is necessary.

Ok - So hypothetically if this reservation could be satisfied and there was widespread agreement that an additional take was required, would you still hold out against this CGT proposal as opposed to, say, a rise in income tax levels?

 

[T McGibney]

That's the second time you've said that, and apologies if I'm being a bit thick, but how exactly would this happen, in practice? Even if there was a rollover relief and a tax free threshold for gains?

Because there would be inherent disincentive to downsize and a further one to improve or extend cheaper properties.

Besides, this being Ireland, some genius like Brian Lenihan will eventually come along and scrap the rollover relief, or make it conditional on having LPT paid up or something.

 

[odyssey06]

That might be your view, but unfortunately it's not actually supported by law, and you don't seem to understand how our constitutional democracy works.

You don't seem to understand the question that was asked.
I wasn't asked a question about the law, or about how constitutional democracy works.
I was asked why I objected to what is in effect a new tax.
I have earlier also explained why this is bad politics, which showed an understanding not just of our democracy, but of our politcal parties and their voting base.
You may agree or disagree with that understanding, you may not like the reasons for my objection, fine... but patronising lines will be met in kind.

 

[odyssey06]

Ok - So hypothetically if this reservation could be satisfied and there was widespread agreement that an additional take was required, would you still hold out against this CGT proposal as opposed to, say, a rise in income tax levels?

Taxes are already too high. We don't need an additional take we need to cut spending.
So it'll be a long time before I'd agree to a new tax purely from a revenue gathering perspective, unless the tax is intended to also reduce detrimental bevaviour (either to the economy or society).

I would only agree with a re-balancing of tax rates as in there must be a reduction in tax elsewhere or else such additional benefit such as mortgage interest relief.

 

[Early Riser]

Taxes are already too high. We don't need an additional take we need to cut spending.
So it'll be a long time before I'd agree to a new tax purely from a revenue gathering perspective, unless the tax is intended to also reduce detrimental bevaviour (either to the economy or society).

I would only agree with a re-balancing of tax rates as in there must be a reduction in tax elsewhere or else such additional benefit such as mortgage interest relief.

odyssey06 - I notice you evaded answering the actual question. You're not thinking of taking up politics yourself?

 

[odyssey06]

odyssey06 - I notice you evaded answering the actual question. You're not thinking of taking up politics yourself?

If I took up politics I would have to evade a lot of questions!

So for a new tax I'd have to be convinced that:
(1) We need the additional revenue
Answer: I oppose the tax as today we don't need it, we need to cut or at least control spending.
(2) Or, the new tax is intended as a disincentive to detrimental economic or social behaviour
Answer: What's detrimental about owning own home? Nothing. We may actually want to encourage downsizing, not discourage it, which this tax would do.
(3) Or, we want to encourage positive economic behaviour
Answer: If we want people to invest in companies, shares etc rather than property, lobbing a new tax onto property is not the whole answer. We need to use carrot and stick. The new tax should not be an excuse to grab more tax out of property but a genuine attempt at re-balancing the tax take so as to encourage more 'productive' behaviour.

This new tax meets none of those critera. I am against it. Vote for me

 

[Early Riser]

If I took up politics I would have to evade a lot of questions!

True ! But back to my question - hypothetical as it is. If there was widespread popular support for a need to increase the overall tax take (for whatever widely agreed purpose) would you still hold out against this CGT proposal if the alternative was an increase in income tax rates? Which alternative would you object least to if, by democratic popular demand, some tax rise was inevitable?

No answer - no vote!

 

[T McGibney]

True ! But back to my question - hypothetical as it is. If there was widespread popular support for a need to increase the overall tax take (for whatever widely agreed purpose) would you still hold out against this CGT proposal if the alternative was an increase in income tax rates? Which alternative would you object least to if, by democratic popular demand, some tax rise was inevitable?

No answer - no vote!

May I answer that for myself?

My answer: increase Income Tax.
My reason: people will feel it almost immediately in their pockets and accordingly pressure will build to cut both it and the overall tax take.

This won't be the case with CGT on PPR's which merely incentivises homeowners to hold on to their properties until they die, at which time no CGT arises anyway.

 

[jjm]

True ! But back to my question - hypothetical as it is. If there was widespread popular support for a need to increase the overall tax take (for whatever widely agreed purpose) would you still hold out against this CGT proposal if the alternative was an increase in income tax rates? Which alternative would you object least to if, by democratic popular demand, some tax rise was inevitable?

No answer - no vote!

I think there is widespread sopport for the view that Increasing tax will not give you better services by the people providing them at the front line who are taxpayers until you fix this there is no point in increasing tax


If We need more tax the USC should be increased and the funds targeted at whatever widely agreed purpose it is collected for and kept seperate from general taxation,USC was not popular which means it reached into places where tax was not collected from before
In Germany the had a 5.5% special tax when the country reunited I think we need something like it hear to address/target issues due to bad Government planning .the spotlight would be on the Government to get value for money by not allowing it to go into General taxation and get lost , It would stop pressure groups from raiding the fund .

 

[Early Riser]

May I answer that for myself?

My answer: increase Income Tax.
My reason: people will feel it almost immediately in their pockets and accordingly pressure will build to cut both it and the overall tax take.

This won't be the case with CGT on PPR's which merely incentivises homeowners to hold on to their properties until they die, at which time no CGT arises anyway.

Thanks. I am just trying to clarify for myself if the apparent strength of opposition to this proposal is anti-tax in general, or because of inherent unfairness or adverse consequences of the specific proposal itself. Also I am just trying to get my own head around the pros and cons.

I see and accept the argument that a bald application of CGT to PPRs could lead to adverse consequences, such as those you identify. But I think if we could ever envisage a comprehensive overhaul of the tax system (with a much wider base - a small tax on everything, no exemption) then a form of CGT could be formulated to address these potential consequences. As the population ages we are going to be forced to review everything around taxation and spending anyway.

Leaving aside the immediate housing crisis, we have historically been over-focussed on the family home as a kind of investment strategy. Does this make housing (a social issue) very vulnerable to the shocks of inevitable market fluctuations ? I accept the contradiction that applying CGT feeds into the home as investment perception, but at least it weakens its appeal as an investment strategy as opposed to other market activity, no ? A home as a place to live rather than an investment ?

jjk - I agree that USC should be one part of a wide - but low - tax base. I see the CGT proposal as fitting into that too. Following on from your comments about the unpopularity of USC because of where it reached into would you think the same applies to the CGT proposal? The older section of our society has been most sheltered from the effects of austerity and has been asked to contribute least towards recovery. I am speaking overall, I realize there are many specific exceptions.

 

[T McGibney]

Leaving aside the immediate housing crisis, we have historically been over-focussed on the family home as a kind of investment strategy. ?

Have we? Many people take some sort of pride in the theoretical value of their home, but most people only sell if they want to trade up or down. There was a shortlived fashion around 2006 of people selling and relocating purely to realise large capital gains but this didn't last.

For that reason, I don't see how CGT on PPRs will ever generate much actual tax receipts for the exchequer.

 

[Early Riser]

Have we? .

Yes, I think we have, at least in the psychological sense. Possibly it even has historical roots - the association of wealth and power with property. And apart from selling it is perceived as a way of building up an investment to hand on after death.