Make mortgage interest payments and childcare costs tax deductible while at the same time increasing property tax on PPR's

[T McGibney]

It's not an insult. You may well have created the wealth to buy the home but the increase in the price of the home had nothing to do with you.

Untrue. If you invest wisely, you will most likely do well. If you invest recklessly or plan badly, anything can happen.

I'm currently selling a house. It has increased in value by €600k in the last 10 years. That's €1154 a week. I'd have to earn an extra €2400 a week to net that sort of money.
During the same period my pension increased in value by €400k without me putting a cent into it.

QED. Congrats.

That's an increase of a million Euro in net wealth without me contributing anything towards it.

Untrue.

People who don't have capital (wealth) have no chance of making that sort of gain.

And lots of people with more wealth than you back then have lost out in the meantime. There's always a fair degree of survivorship bias in these "my property/pension fund has quadrupled in value" stories.

 

[Purple]

I'm opposed to it because on the basis of 30+ years experience, I know with reasonably certainty how it would play out in the medium/longer term.

Okay, so you're opposed to what you think will happen to the proposal, got it.
Based on my 30+ years of experience I see income taxes being concentrated more and more on a small group of earners with no consideration to their actual wealth. I see a continuous conflation of the terms wealth and income to the stage where they seem to be interchangeable now. I know with reasonable certainty that until we change that narrative that problem (and yes, I see it as a problem) will only get worse.

 

[Purple]

Untrue. If you invest wisely, you will most likely do well. If you invest recklessly or plan badly, anything can happen.

Owning a house and having a passively managed diversified pension fund isn't "investing wisely". Getting a return of 100% over 10 years is luck.

Untrue.

No, it's true.

And lots of people with more wealth than you back then have lost out in the meantime. There's always a fair degree of survivorship bias in these "my property/pension fund has quadrupled in value" stories.

Lots of people lost money on property and pensions during a decade of QE? I find that hard to believe.

 

[T McGibney]

Based on my 30+ years of experience I see income taxes being concentrated more and more on a small group of earners with no consideration to their actual wealth. I see a continuous conflation of the terms wealth and income to the stage where they seem to be interchangeable now. I know with reasonable certainty that until we change that narrative that problem (and yes, I see it as a problem) will only get worse.

And it hasn't dawned on you that these are the same people by and large who are property owners?
After all, the burden of a higher property tax falls predominantly on the same people who are paying, or who have previously paid, the bulk of income tax.

Owning a house and having a passively managed diversified pension fund isn't "investing wisely".

It's a lot wiser than the opposite.

No, it's true.

Untrue, unless you contributed nothing to your pension during that time.

Lots of people lost money on property and pensions during a decade of QE? I find that hard to believe.

Yes. The country is full of crumbling properties less than 20 years old. And plenty of people unwisely crystallised pension losses around 2010 by sticking their funds into cash and they're still there.

 

[Purple]

And it hasn't dawned on you that these are the same people by and large who are property owners?
After all, the burden of a higher property tax falls predominantly on the same people who are paying, or who have previously paid, the bulk of income tax.

Yep, they are also the same people who got the gains from property price inflation.

It's a lot wiser than the opposite.

I think you are confusing wisdom with luck.

Untrue, unless you contributed nothing to your pension during that time.

I already said that I put nothing into it during that time.

Yes. The country is full of crumbling properties less than 20 years old.

The State will be picking up the tab for that.

And plenty of people unwisely crystallised pension losses around 2010 by sticking their funds into cash and they're still there.

Plenty or lots? How many lost money on property during that time?

 

[Bow tie]

It's not an insult. You may well have created the wealth to buy the home but the increase in the price of the home had nothing to do with you.

I'm currently selling a house. It has increased in value by €600k in the last 10 years. That's €1154 a week. I'd have to earn an extra €2400 a week to net that sort of money.
During the same period my pension increased in value by €400k without me putting a cent into it. That's an increase of a million Euro in net wealth without me contributing anything towards it. People who don't have capital (wealth) have no chance of making that sort of gain.

Calling a poster delusional is fairly insulting.

"People who don't have capital (wealth) have no chance of making that sort of gain." So are you proposing more transfers from those who work and have capital to those who don't work or have capital?
I doubt it based on your previous comment regarding letting them starve (whether tongue in cheek, I would 100% disagree)

All in all taxes which assist social stability, more benefit for more work etc. are good for society.
Short term, not fully thought through gains have a way of playing out badly.

 

[T McGibney]

Yep, they are also the same people who got the gains from property price inflation.

And...?

I think you are confusing wisdom with luck.

No, I'm not as my comment confirms.

I already said that I put nothing into it during that time.

You did contribute the initial capital? Or did your fund create itself?

The State will be picking up the tab for that.

Not for all of them, I'm sure. Not even for a decent proportion of them I'd wager. After all if you neglect a relatively new property and leave it empty and unmaintained for a decade or longer, the State won't be a blind bit interested in compensating you, nor should it be.

Plenty or lots?

? (nitpicking?)

How many lost money on property during that time?

A lot of them, although many or most of these losses won't have crystallised. Every rural town in the country has too many of these places. They are obviously worth less than their original cost.

 

[Purple]

Calling a poster delusional is fairly insulting.

If so then I apologies.

"People who don't have capital (wealth) have no chance of making that sort of gain." So are you proposing more transfers from those who work and have capital to those who don't work or have capital?

No, I'm proposing less of a transfer from those who work but don't have capital from those who have capital whether they work or not. If that latter group don't have the income to pay that transfer it can be deferred until their die and taken from their estate.

All in all taxes which assist social stability, more benefit for more work etc. are good for society.
Short term, not fully thought through gains have a way of playing out badly.

I agree completely. That's why I'm in favour of wealth taxes and less income taxes because wealth and income are not the same thing.

 

[Purple]

And...?

And what?

No, I'm not as my comment confirms.

Eh?

You did contribute the initial capital? Or did your fund create itself?

I contributed nothing during the time the fund doubled in value.

Not for all of them, I'm sure.

Are you?

? (nitpicking?)

You started

A lot of them, although many or most of these losses won't have crystallised. Every rural town in the country has too many of these places. They are obviously worth less than their original cost.

During the last 10 years though. That's the time I'm talking about.

 

[T McGibney]

I contributed nothing during the time the fund doubled in value.

You did contribute previously though, so the fund was of course well positioned to grow at that point, in the absence of wars, disasters, economic collapses etc. Which was very wise of you.

During the last 10 years though. That's the time I'm talking about.

Of course the fact that equities and Irish property were both in almost unprecedented slump 10 years ago has nothing with your focus on the 10 years? Indeed, a lot of these properties deteriorated in the past decade. That's what happens when places are poorly managed.

 

[Purple]

You did contribute previously though, so the fund was of course well positioned to grow at that point, in the absence of wars, disasters, economic collapses etc. Which was very wise of you.

The gain was due to the political decision to print money after the last recession. As I doubt anyone from the Fed or ECB seeks out my posts here for guidance (or anyone else if they've any sense) I can't say that I influenced that decision. Therefore it was right place at the right time stuff.

Of course the fact that equities and Irish property were both in almost unprecedented slump 10 years ago has nothing to do with this.

Oh it has but those who didn't have capital in the last 10 years have been left behind in the wealth stakes and they are mostly the younger people who will have to pay the QE bill, one way or the other. They are the ones trying to buy a house and start a family now. Real wage growth has been less than 1% per year up until this year. During the same period we more than doubled the amount of money in the world. That means we've halved the value of waged relative to capital during that time. I find that unfair on those starting out in life who are working. I certainly didn't face the same disadvantages. That's mainly down to luck. I did buy an apartment in 1996 because of the impending EMU and the interest rate reductions that came with it. The rest was luck.

 

[Bow tie]

I agree completely. That's why I'm in favour of wealth taxes and less income taxes because wealth and income are not the same thing.

To me wealth built from taxed income is a derivative of income, just put into bricks and mortar rather than the bank.
With interest rates rising would you propose a similar punitive tax on savings?

 

[Bow tie]

Therefore it was right place at the right time stuff.

We all did contribute though via bank bailouts and austerity though, so in an extremely roundabout way we have contributed

 

[Purple]

To me wealth built from taxed income is a derivative of income, just put into bricks and mortar rather than the bank.

With interest rates rising would you propose a similar punitive tax on savings?

We pay DIRT tax at 33%. I'm not proposing anything that punitive.

 

[Purple]

We all did contribute though via bank bailouts and austerity though, so in an extremely roundabout way we have contributed

Well most of that was borrowed but QE is a different thing and the Bank Bailout was a bailout of bond holders (pension funds etc and depositors) but for the bit your did contribute thanks!