Define wealth though.
If someone earns an extra €100k, they’ll end up with €45-48k.
That’s theirs. If they invest it, they’ll pay tax at rates of 33-55% on any returns. If they pass it on to someone, they’ll lose 33% of it.
What are you suggesting that the State should do to that person’s €45-48? It has already been subject to a massive proportion of tax.
I'm suggesting that people should pay less tax on the €100K and some tax on the retained wealth that higher net income generates.Define wealth though.
If someone earns an extra €100k, they’ll end up with €45-48k.
That’s theirs. If they invest it, they’ll pay tax at rates of 33-55% on any returns. If they pass it on to someone, they’ll lose 33% of it.
What are you suggesting that the State should do to that person’s €45-48? It has already been subject to a massive proportion of tax.
A “wealth tax” is a tax on the €45-48!That €45-48 is still taxable though, no matter what you do with it. You can hold it in notes and coins to avoid tax, but if you 'use' it, it will be taxable. VAT, CGT, DIRT, CAT are likely to apply no matter what you do with it. I don't understand your point about it previously being subject to tax?
So what's the alternative?A “wealth tax” is a tax on the €45-48!
So it’s double taxation.
Fair enough if the person “does something” with the money and incurs VAT or CAT.
But the fundamental point is that it’s “their” €45.
That's just factually incorrect.New entrants are not at a massive disadvantage. That’s the narrative that the whingers want you to believe. There have never been greater opportunities in Ireland than there are now. Some people are just too lazy or too stupid to take advantage of them. Or they want to have their cake and eat it, i.e. go off and do something vocational but also have the lifestyle of someone who’s well-paid.
No I don't have children. Yes I do have lights on the road and yes I do poop and its flushed away. But so does everybody else even those who don't contribute (again either financially or in any other way).Do you have children? If so the State pays €7-€8k a year sending them to school. If you send them to a private school then thanks; you are subsidising the public school system but the State still pays about €4k a year towards their education.
When you flush the toilet does your poo go away?
Do you drive on roads and use footpaths?
Do you live in relative safety without fear of being attacked by bandits or someone moving into your house when you are at work?
Do the streetlights come on when it gets dark?
If you get sick do you go to a hospital or a doctor?
Do you interact with and derive any benefit from anyone who had been educated in this country?
If the answer to any of the above is "yes" then you get something back.
Most people take more than they give. I don't but I pay loads in taxes. I consider taxes the price of civilisation.
I'm a social liberal and an economic centralist. I think we raise more than enough in taxes but waste billions. If you want to save money then go after the structural waste within the health service and the endemic inefficiency in the State Sector generally. Go after the people who buy a house then rent it to their partner who lives there with their children while claiming HAPS. Go after the teachers and solicitors and doctors and plumbers and painters and carpenters and architects and everyone else who does nixers and insists on cash (like so many hospital consultants do). There's loads of black economy stuff going on and it should all be stopped.
In any discussion about taxing the "rich" we need to define who the rich are. What people really mean is the people in the €2 million houses etc but many of them aren't on high incomes. We already tax high incomes too much so we can't increase marginal rates. So given that we live in a Republic and should seek to create a society with as much equality of opportunity as possible it is my opinion that we should tax wealth retention more and wealth creation less. I don't want to see more taxes, if anything I'd like to see less. What I would like to see is that shift from one to the other. At the moment holding onto wealth is easy but getting wealthy through hard work is very hard and will only get harder.
We certainly can't tax big capital disproportionately as it will just flow elsewhere but there is a global problem with the movement of wealth away from labour and into capital and that will impact on all of us. Personally I'll probably get better off as I'm on the right side of the divide but that doesn't make it right.
A “wealth tax” is a tax on the €45-48!
So it’s double taxation.
Fair enough if the person “does something” with the money and incurs VAT or CAT.
But the fundamental point is that it’s “their” €45.
Crude reductionism at best.New entrants are not at a massive disadvantage. That’s the narrative that the whingers want you to believe. There have never been greater opportunities in Ireland than there are now. Some people are just too lazy or too stupid to take advantage of them. Or they want to have their cake and eat it, i.e. go off and do something vocational but also have the lifestyle of someone who’s well-paid.
No, the sole trader is being taxed heavily on wealth creation now. It's harder for them to get wealth as their income is taxed at over 50%. I'd like to see a reduction in taxes on wealth creation and a corresponding increase in taxes on wealth retention. That would incentivise the sole trader.By taxing wealth then people wont bother creating wealth and by doing this if people don't have wealth to rely on when things get bad they end up relying on the State. Take for example a sole trader, why would he take all the risk of building a business and the associated wealth if the State is going to tax it for all his work, stress, risk taking etc. Your scenairo discourages this as the sole trader takes all the risk and the State takes all the gain. Why would any rational individual even try then?
If you reduce tax on wealth creation then it is going to lead to wealth retention and hence a tax on it.No, the sole trader is being taxed heavily on wealth creation now. It's harder for them to get wealth as their income is taxed at over 50%. I'd like to see a reduction in taxes on wealth creation and a corresponding increase in taxes on wealth retention. That would incentivise the sole trader.
At the moment someone who is sitting in a reasonably modest house in Monkstown is making a net €50,000 a year from capital appreciation. The sole trader, who is providing employment and a social good, has to earn about €110,000 to end up with the same amount of net wealth. I find that unfair.
Exactly.If you reduce tax on wealth creation then it is going to lead to wealth retention and hence a tax on it.
No, they bought it when interest rates were higher and wages were higher relative to the cost of the house. Those higher interest rates went with higher labour price inflation rates and so a reduction in the relative cost of the mortgage over a shorter period of time (inflation is compound , interest rates are not).If someone is sitting in a reasonably modest house in Monkstown then most likely they purchased it many decades ago when interest rates were high, income taxes were high and wages were low in comparison. If a person through either hard work or a bit of luck see there property grow in value then good for them.
Because we want to next generation to have the same access to capital resources relative to wages, i.e. we want a society where hard work is rewarded rather than a return to a feudal type system where the rich owned everything and passed it on to their children (because that's where we are heading).Surely these people and by extension their families should benefit from there hard work through out life. Why should a tax be charged on a property simply because of its value? Is this house using a greater amount of street lighting then an identical one in another city?
No, the tax they pay will reduce as the property price reduces but that's a great point; Stamp duty and transaction taxes are a snapshot of a value in time and so can seem very generous or very punitive depending on appreciation or depreciation. Wealth taxes are fairer as they rise and fall with the value of the asset. I paid over €100k in stamp duty when I bought my last house. It's only now above the value I purchased it for in the early 2000's.If someone pays a tax on a property when its value is high and when they pass away and the value of the property has dropped significantly (take 2009 crash etc) should they or their family get a refund on the tax they paid when the property had a "book value" higher than its actually sales value?
https://www.ft.com/content/c52faece-2e07-4ae3-912d-83cae264093e
The pandemic has increased economic divisions between the haves and have-nots, heightening concerns about the role of inheritance in deepening social rifts. Or, as the OECD puts it: “The Covid-19 crisis, which has affected different demographic groups differently, may exacerbate difficulties for some households and increase the divide between older asset-owning households and younger households.” This is especially the case as richer households are more likely to have received an inheritance or a lifetime gift, the research finds. Among households in the top fifth by wealth, the portion who received an inheritance or lifetime gift ranged from 39 per cent in Canada to 66 per cent in Finland. These trends are getting worse in many OECD countries and likely to worsen, the authors say. They predict inheritances will increase in value, if asset prices continue to rise, and in number as the baby-boomer generation gets older. Meanwhile, younger generations may find it harder to build up wealth on their own as many struggle to buy a home due to high prices.
The OECD’s logic is widely accepted among British experts but many warn the political opposition to such a change would make it impracticable as, generally, better-off people feel they should pass assets to their children with as little tax as possible. These sentiments seem deeply rooted in the British elite’s centuries-old attachment to landed property. Edward Troup, former first permanent secretary at HM Revenue & Customs, puts it this way: “The depressing fact is because we’re obsessed with housing wealth in this country, we’re also obsessed with not paying IHT.”