Using Property Taxes to Encourage Redistribution of Family Homes

Fol20

Obvious Desperate Breakfasts wrote: »

Can’t say I’ve ever talked about it much with anyone. Let this be a lesson to you. Some people who are set to inherit large amounts of money aren’t opposed to inheritance tax. Don’t assume that somebody is envious just because they are in favour of it. Some of us see inheritance as a bonus rather than an entitlement. To be blunt, you should probably get over it. Make your peace with. The abolition of CAT is unlikely. Maybe it will happen but probably not. What’s the point in stewing over it?

As for hating paying tax, how do you think the country is kept running? If everyone did as you do and visited tax advisors regularly to reduce their taxes and the tax take of the country fell substantially, where would the shortfall come from? What would have to be jettisoned with a much lower tax take?

I have to say I agree with with nox on this. Everyone wants to avoid paying tax incl people that pay very little. I haven’t talked to anyone that get excited that they pay more tax.

STB.

Assetbacked wrote: »

The dead are gone, they have no use for their assets. The inheriting person has, out of nothing but luck, been given something for nothing.

They have worked all their life and paid their taxes including property tax!. If they choose to leave that house to a family member then that is no ones business but their own. In the context of this bolloxology about redistribution, just because someone else hasn't got the wherewithal is not an excuse for green eyed monster talk. Tough shít, life deals different hands. You get up off your arse and make the most of it that you can. I really cannot get over the sense of entitlement. What did previous generations do ???

Assetbacked wrote: »

It's the equivalent of hiding assets in offshore accounts to avoid paying lawful taxes. Wealth should not flow so easily through a generation without decent taxation to ensure appropriate redistribution.

No its fúckin not. Owning an paying for a mortgage all your life is not wealth. Its a private and heavy financial commitment to create a home. Wealth me hole.

Assetbacked wrote: »

At the same time, I absolutely detest the waste of taxpayers money

So do I. It breaks my heart everyday to have to go out to work. But I do. Matter of having to.

The biggest waste is our social welfare system which is heavily abused.

Private citizens solving the inaction of the government for the last few years to increase a mechanism for affordable or social housing after the crash is rubbish talk.

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Fol20 wrote: »

I have to say I agree with with nox on this. Everyone wants to avoid paying tax incl people that pay very little. I haven’t talked to anyone that get excited that they pay more tax.

You would have to be very naive to want to pay no tax. You couldn't possible envision a country which pays little, or no tax. It would be awful.

elperello

Savanna Stale Prizefighter wrote: »

You would have to be very naive to want to pay no tax. You couldn't possible envision a country which pays little, or no tax. It would be awful.

Bermuda, Bahamas, Cayman Islands.
Hell holes the lot of them

Obvious Desperate Breakfasts

elperello wrote: »

Bermuda, Bahamas, Cayman Islands.
Hell holes the lot of them

They likely aren’t great places to live for your average or low income worker. Do you think those countries are packed with cartoonish fat cats?

ELM327

Marcusm wrote: »

The difficulty is that we still need people on those incomes to do jobs in city centres. That’s why we need appropriate housing (key worker, social rent, call it what you will) in all areas (within reason, Ringsend not Shrewsbury Road for Dublin 4). Not all inner city or urban village areas can be completely gentrified. If you can’t live within reasonable travelling distance of a school in Ranelagh, why would you teach there when you get paid the same to teach in Bray. Etc etc.

So free houses to the non-working class solves that how exactly?
The answer is not social housing.


The answer is population density and public transport to make living and working in the city centre viable. You know, like other capital/large cities. London, Paris, Berlin, NYC etc

Amirani

elperello wrote: »

Bermuda, Bahamas, Cayman Islands.
Hell holes the lot of them

All of those countries have taxes. Their taxation policies are just heavily weighted towards indirect taxation.

Bermuda for example has one of the highest consumption taxes in the World, and has heavy import taxes.

As regards how great they are; all are considerably below Ireland (and most of Europe) on human development indices.

seamus

Fol20 wrote: »

I have to say I agree with with nox on this. Everyone wants to avoid paying tax incl people that pay very little. I haven’t talked to anyone that get excited that they pay more tax.

Everyone wants to avoid seeing a doctor, including people who are in the full of their health. I haven't talked to anyone that gets excited about their next appointment. But you wouldn't say that we should be aiming for a society where people visit the doctor as infrequently as possible.

We all acknowledge that there are things that need to be done, that doesn't mean we have to enjoy them. Tax is one of them. The alternative to paying tax, is living in a sh1thole of a country where nothing works, people die young and crime is rife.
There is a balance necessary between what the country needs in order to function and what the individual should have a right to keep.

Earned income is the income which should be afforded the highest protection. Unearned income should be heavily taxed.

Theoretical question for those who think inheritance tax should be abolished: If the government were to propose a 75% tax on all unearned income (CAT, CGT, DIRT, etc), while abolishing income tax and USC completely, would you be in support of that?

Effectively you get to keep everything you earn today and the state will just collect tax when you're dead and don't need it any more. That's a fair deal, right?

ELM327

seamus wrote: »

Everyone wants to avoid seeing a doctor, including people who are in the full of their health. I haven't talked to anyone that gets excited about their next appointment. But you wouldn't say that we should be aiming for a society where people visit the doctor as infrequently as possible.

We all acknowledge that there are things that need to be done, that doesn't mean we have to enjoy them. Tax is one of them. The alternative to paying tax, is living in a sh1thole of a country where nothing works, people die young and crime is rife.
There is a balance necessary between what the country needs in order to function and what the individual should have a right to keep.

Earned income is the income which should be afforded the highest protection. Unearned income should be heavily taxed.

Theoretical question for those who think inheritance tax should be abolished: If the government were to propose a 75% tax on all unearned income (CAT, CGT, DIRT, etc), while abolishing income tax and USC completely, would you be in support of that?

So... Ireland??


This is my issue. Somehow we've managed to become a high tax (above low earners), low services society .

Obvious Desperate Breakfasts

Fol20 wrote: »

I have to say I agree with with nox on this. Everyone wants to avoid paying tax incl people that pay very little. I haven’t talked to anyone that get excited that they pay more tax.

Nobody likes seeing that tax deduction on their payslip. But you accept it like a grown up. A lot of necessary things aren’t enjoyable. If we all did like Nox and doggedly looked at any way possible to avoid tax, there’d be a shortfall. What should be jettisoned? Popular answer: dole scroungers rabble rabble rabble. But we don’t get to decide where the tax goes - maybe that hospital doesn’t get its badly needed new scanner, maybe that road you want built is delayed indefinitely, maybe less potholes get filled.

I’m seriously ill. I got ill at a young age when I didn’t have much savings. I have a medical card, a FTP and other state supports. I would seriously struggle financially without those supports. If I could go back to work tomorrow (which I would love), I’d be quite happy to know that my taxes were going to pay for those same supports for people in my position. Lads, you never know what life will bring and when you may need to lean heavily on the taxes brought in by workers. I can’t get my head around the individualistic mindset that would be happy if there were no taxes. If if was announced that taxation was going to cease tomorrow, well we all better prepare to upskill hugely to do all those things we didn’t think of that tax paid for. Can’t wait to get my road-building diploma! Or would the taxes saved be used to personally pay people to do all the things we benefitted from via taxation? Sounds like a load of hassle, to be honest and sounds like we’d each be no better off financially. I honestly think that folks who would love a tax-free society haven’t really thought things through properly. You really never know when life will throw balls of shït at you!

Amirani

ELM327 wrote: »

So... Ireland??


This is my issue. Somehow we've managed to become a high tax (above low earners), low services society .

Compared to where exactly? Which utopia does much better at this?

seamus

ELM327 wrote: »

So... Ireland??


This is my issue. Somehow we've managed to become a high tax (above low earners), low services society .

Ireland is neither high tax or low services. That's a fallacy.

We're mid table all the way.

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seamus wrote: »

Earned income is the income which should be afforded the highest protection. Unearned income should be heavily taxed.

Agreed. Income taxes should be much lower, taxes on capital should be much higher.

Amirani

seamus wrote: »

Earned income is the income which should be afforded the highest protection. Unearned income should be heavily taxed.

I really struggle to comprehend how people seem to view things in exactly the opposite way. I'm no dyed in the wool socialist, but why should income you work for be taxed far more heavily than income you don't work for?

ELM327

Amirani wrote: »

Compared to where exactly? Which utopia does much better at this?

seamus wrote: »

Ireland is neither high tax or low services. That's a fallacy.

We're mid table all the way.

Consider the level of services provided in Scandinavia. A true bastion of the socialist high taxes high services model.
Even the UK has lower income taxes (spread over a wider base starting at £11k, but not hitting the top band until ~£50k) and better healthcare services included, lower motor tax and better infrastructure due to economies of scale.


We are most certainly not mid table. Not in either sense. To quote sideshow bob from the simpsons and paraphrase, Especially not low tax and especially not high services.

Obvious Desperate Breakfasts

ELM327 wrote: »

Consider the level of services provided in Scandinavia. A true bastion of the socialist high taxes high services model.
Even the UK has lower income taxes (spread over a wider base starting at £11k, but not hitting the top band until ~£50k) and better healthcare services included, lower motor tax and better infrastructure due to economies of scale.


We are most certainly not mid table. Not in either sense. To quote sideshow bob from the simpsons and paraphrase, Especially not low tax and especially not high services.

I worked in a wealthy southern UK city eight years ago. The salaries across the board were markedly lower than in Ireland. Lower cost of living then, you might say? Nope. I was very disappointed at the little difference there was in the cost of living between the UK and Ireland, especially when you consider how much lower salaries were.

And, as you say, economies of scale. It’s not all that useful to compare the two countries when you consider their much higher population and population density.

Eric Cartman

Amirani wrote: »

All of those countries have taxes. Their taxation policies are just heavily weighted towards indirect taxation.

Bermuda for example has one of the highest consumption taxes in the World, and has heavy import taxes.

As regards how great they are; all are considerably below Ireland (and most of Europe) on human development indices.

Tax havens will always have a 'lower development index' on paper because they don't have a welfare state so the quality of life for those at the bottom drives the index down.

seamus

ELM327 wrote: »

Consider the level of services provided in Scandinavia. A true bastion of the socialist high taxes high services model.
Even the UK has lower income taxes (spread over a wider base starting at £11k, but not hitting the top band until ~£50k) and better healthcare services included, lower motor tax and better infrastructure due to economies of scale.

Headline rates and bands are irrelevant when asking the question of whether and economy is high or low tax. France's CT rate is considerably higher than Ireland's, but the average corporation tax (the effective rate) paid in France is below 12.5%. If you were to say that France has high corporation tax and Ireland has low corporation tax, you'd be wrong, even though France's rate will be 28% in 2020.

Likewise, a headline IT rate of 52% looks high but it doesn't actually tell you whether people in Ireland pay a lot of tax or not.

In fact, the effective tax on your average person in Ireland is lower than most of the EU, including the UK.

We do have a balancing problem, that can't be ignored. People who earn more pay proportionately way more than those who earn less. People on minimum wage in Ireland pay practically no tax when compared to other EU countries.

It is, however, completely incorrect to say that we pay a lot of tax in Ireland. We don't, not by a long shot.

We are most certainly not mid table. Not in either sense.

Actually you're correct, we're not mid table. We're at the lower end of the table for tax.

Amirani

ELM327 wrote: »

Consider the level of services provided in Scandinavia. A true bastion of the socialist high taxes high services model.
Even the UK has lower income taxes (spread over a wider base starting at £11k, but not hitting the top band until ~£50k) and better healthcare services included, lower motor tax and better infrastructure due to economies of scale.


We are most certainly not mid table. Not in either sense. To quote sideshow bob from the simpsons and paraphrase, Especially not low tax and especially not high services.

Ireland is a high tax country...



We have the lowest tax take as a % of GDP in the EU. Naturally there are issues with GDP as a measuring tool, but even adjusting for this isn't going to put us near the top of the pile.

Source Data: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_10a_taxag&lang=en

EdgeCase

There's a massive problem with lack of new build and I don't think there's been a sufficiently sustained boom to bring people in the construction sector back.

I was talking to friends of mine who worked in construction in the past at various levels and they're not willing to come back to Ireland as they're happy where they've moved and don't yet trust the economy here to stay booming. The risk of Brexit dragging us under is particularly off putting.

I was also talking to polish friends of mine and they're all saying that 2008 frightened a lot of people into not wanting to put roots down here and also the polish economy is much better now than it was in the early 2000s and a lot of people wouldn't be so keen on moving.

Then you've got the sky high and low quality rental issue which is ironically feeding into the situation that construction workers don't want to move here.

Meanwhile the banks aren't really recovered and are using the boom to repair their 2008 losses and that's feeding into lack of credit and Argos trick aversion.

Then you've got abysmally poor planning and a boom in IT, fintech, finance and now an influx of companies fleeing Brexit and that's driving things higher.

You're not going to fix this problem by just encouraging older people to sell up.

1. Where would the go? There's nowhere reasonable to downsize to.

2. There's a massive problem with lack of studio apartments and 2-bed which is causing young professionals to house share in what should be suburban family homes. That's drying up supply very dramatically as it's very lucrative to rent multiple, well paid adults.

3. That lack of appropriate accomodation for single people and younger adults is driving their quality of life way down. It's ludicrous to have to house share in your adult phase of life. A single person or a couple without kids should be able to rent or buy a small home - most European cities have plenty of suitable apartments. The lack of that kind of accomodation is making Dublin, Cork and elsewhere very unattractive to some European professionals who IT companies are desperate to attract. It's not even that it's just unaffordable, in many cases it doesn't exist at all. You literally cannot find decent accomodation in Dublin at the moment and have to compromise with far lower living standards than you'd get in competing European cities.

4. There's very little building activity going on relative to demand. I see no state agencies or government ministers in a panic about that. It's like they've burnt their bridges the to the Fianna Fail tent era and nobody wants to be seen in proximity to developers or the banks.

My personal view is that we could be laying the foundations for another collapse by failing to tackle the housing crisis.

Fundamentally it's an infrastructure problem and it will start to impact FDI as companies won't want to locate to somwhere the has no housing.

Dublin and the smaller cities also do not have the allure of a mega-city like London, Paris or NYC which have vastly better cultural and social infrastructure and are often attractive to live in at any cost for some, so these issues are not going to be overlooked.

Dublin basically competes with the likes of Rotterdam, Brussels, mid sized German cities, Copenhagen and so on.

Cyrus

Amirani wrote: »

Ireland is a high tax country...



We have the lowest tax take as a % of GDP in the EU. Naturally there are issues with GDP as a measuring tool, but even adjusting for this isn't going to put us near the top of the pile.

Source Data: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_10a_taxag&lang=en

our er taxes re employees are a fraction of a lot of eu countries.

Cyrus

EdgeCase wrote: »

My personal view is that we could be laying the foundations for another collapse by failing to tackle the housing crisis.

why would a shortage of housing cause a collapse ?

EdgeCase

Cyrus wrote: »

why would a shortage of housing cause a collapse ?

Credit bubble as people mortgage to the hilt again to buy into the market or you get investments stacked on an assumption of ever increasing rental yeilds.

I'm already hearing radio ads for interest only investment mortgages.

A local, regional (see: Brexit) or global (see: Trump trade wars) economic crisis could cause a major issue here as we are once again in an asset and credit bubble.

seamus

Cyrus wrote: »

why would a shortage of housing cause a collapse ?

Inward investment dries up. Foreign workers blacklist Ireland as a place to come due to lack of housing. Young Irish people emigrate because there's nowhere to live. So companies avoid setting up new offices or adding to headcount due to high wages caused by high rents, and lack of available workforce.

Eventually companies start moving departments to other countries where they can actually get staff and pay people less, and...collapse.

This is the risk we run as an open economy. Most of our high-value jobs are not provided by indigenous companies.

EdgeCase

The high costs are going to ultimately cause a slow down in FDI too. There's a limit at which point companies struggle to recruit and we aren't in the 80s where the type of FDI we attracted was stuff like pharma manufacturers. At the moment it's a wave of IT who are seeing mostly Dublin but also Cork and a couple of cities as places to base EU HQs.

However, could also argue that these companies are social dumping. We aren't taxing them very much at all and they're causing a huge housing bubble, massive strain on infrastructure like transport and health and so on which is being funded from anybody but their profits.

In a normal economy a reasonable level of tax on their incomes would be flowing into things like social and affordable housing programmes, building out infrastructure to create proper transit systems and new urban areas and so on.

I mean in many ways Ireland's is the Ryanair of EU countries. You charge low fares and you get very basic services.

In some ways our model is more like certian US states then it is like most of Northern Europe.

It's a catch 22 though. If we increased tax on FDI we would potentially lose investment.

I don't think the model we are using is sustainable though and we should be gently changing things rather than wandering into a scenario where the rug is pulled out as the rest of the EU gets fed up with us taking the p1$$ and undermining their social democratic models.

At the end of the day, we are accessing other people's markets and undercutting them with ultra low tax. It's often an approach that's as "cakeist" as our British cousins, only we tend to go for a different type of cake and are a bit more subtle about demanding it.

Amirani

EdgeCase wrote: »

However, could also argue that these companies are social dumping. We aren't taxing them very much at all and they're causing a huge housing bubble, massive strain on infrastructure like transport and health and so on which is being funded from anybody but their profits.

In fairness, a lot of the increase in our tax revenues in recent years has been driven by a select few large multinationals that are paying large amounts of corporation tax here. CT receipts have more than doubled since 2014.

80% of our 8/9bn CT receipts come from multinationals.

Cyrus

EdgeCase wrote: »

Credit bubble as people mortgage to the hilt again to buy into the market or you get investments stacked on an assumption of ever increasing rental yeilds.

not possible with lending rules

EdgeCase

Amirani wrote: »

In fairness, a lot of the increase in our tax revenues in recent years has been driven by a select few large multinationals that are paying large amounts of corporation tax here.

Relative to their profits they aren't. It's just that a small number of MNCs are producing insanely huge profits and we are getting a very small cut of that.

Look, I'm not saying that every country engages in this to some degree. I'm just saying that operating as what is very close to a corporate tax haven within the EU isn't sustainable as an economic model.

Given the amount or GDP that we have, we should be easily able to solve all of these crisis in housing and health but we're only a conduit for much of the GDP.

My concern in the medium term is Ireland ends up on the wrong side of a global tax reform and our boom fizzles out as the loopholes are closed and we end up having squandered the opportunity to have created a genuinely stable economic model.

Cyrus

EdgeCase wrote: »

Credit bubble as people mortgage to the hilt again to buy into the market or you get investments stacked on an assumption of ever increasing rental yeilds.

I'm already hearing radio ads for interest only investment mortgages.

A local, regional (see: Brexit) or global (see: Trump trade wars) economic crisis could cause a major issue here as we are once again in an asset and credit bubble.

seamus wrote: »

Inward investment dries up. Foreign workers blacklist Ireland as a place to come due to lack of housing. Young Irish people emigrate because there's nowhere to live. So companies avoid setting up new offices or adding to headcount due to high wages caused by high rents, and lack of available workforce.

Eventually companies start moving departments to other countries where they can actually get staff and pay people less, and...collapse.

This is the risk we run as an open economy. Most of our high-value jobs are not provided by indigenous companies.

there are far more advantages for co's setting up here than disadvantages, increased housing costs wont be the tipping point

Amirani

EdgeCase wrote: »

Relative to their profits they aren't. It's just that a small number of MNCs are producing insanely huge profits and we are getting a very small cut of that.

Look, I'm not saying that every country engages in this to some degree. I'm just saying that operating as what is very close to a corporate tax haven within the EU isn't sustainable as an economic model.

Given the amount or GDP that we have, we should be easily able to solve all of these crisis in housing and health but we're only a conduit for much of the GDP.

My concern in the medium term is Ireland ends up on the wrong side of a global tax reform and our boom fizzles out as the loopholes are closed and we end up having squandered the opportunity to have created a genuinely stable economic model.

We're arguably getting more corporation tax from the multinationals than we should given how little of their operating activity is here compared to the rest of Europe. But I agree in general.

Agreed on the last point, we're quite heavily dependent on the movement of global tax reform.