New Dail / New Taoiseach

Sam Russell

efanton wrote: »

Well enlighten me, and I am not being sarcastic.

My understanding is that any profits can be dispersed to shareholders through dividend which are taxed at 20%. If there are no profits then obviously there can be no dividends.

What did I get wrong.

The dividend withholding tax is applied at a standard rate of 20% for dividend payments and other distributions made by companies registered in Ireland. Most Irish companies will pay dividends twice a year and the withholding tax will apply at source on the gross dividend.

Irish individual shareholders will be levied the tax on the gross dividend at the marginal rate, but they are entitled to a credit for the withholding tax and a refund if the withheld amount exceeding their tax liability. However, there are also exceptions when it comes to the Irish withholding tax on dividends.

The legislation stipulates a lower or 0% withholding tax for distribution of dividends if Irish double taxation agreements are enforced, and the dividend tax will not apply if the distribution is made to a holding company where the majority shareholder is an Irish tax resident company.

I think you are confusing a withholding tax paid by the company to the revenue which is taken from the gross dividend. The resulting dividend is subject to income tax by the recipient, who can claim relief for the withholding tax. The same procedure applies to rents paid to a non-resident landlord.

The 20% withholding tax is not the end of the tax liable on the dividend.

efanton

Sam Russell wrote: »

I think you are confusing a withholding tax paid by the company to the revenue which is taken from the gross dividend. The resulting dividend is subject to income tax by the recipient, who can claim relief for the withholding tax. The same procedure applies to rents paid to a non-resident landlord.

The 20% withholding tax is not the end of the tax liable on the dividend.

Sorry but I'm going to have to ask you to put that in language that an economics ignoramus could understand.
Its not that I'm stupid, perfectly happy to explain anything related to astro-physics or the standard model of particle physics to you if you wish, but often the nuances of a specific subject are totally lost on those that have not studied that particular subject in detail.

tobsey

efanton wrote: »

Sorry but I'm going to have to ask you to put that in language that an economics ignoramus could understand.
Its not that I'm stupid, perfectly happy to explain anything related to astro-physics or the standard model of particle physics to you if you wish, but often the nuances of a specific subject are totally lost on those that have not studied that particular subject in detail.

You have shares. You’re due a dividend of 10k from them. Company keeps 20% as withholding tax.

The 10k is added to your income for tax purposes. You already earn 100k from other sources. Your marginal rate is 40% because you earn over the threshold. You therefore owe 4K income tax on dividends. However given that the company withheld 2k already on your behalf, you pay revenue 2k directly. Therefore you still pay 40% in total.

If you only had 20k other income, your marginal rate would be 20%, and you wouldn’t pay any further income tax on the dividend.

efanton

tobsey wrote: »

You have shares. You’re due a dividend of 10k from them. Company keeps 20% as withholding tax.

The 10k is added to your income for tax purposes. You already earn 100k from other sources. Your marginal rate is 40% because you earn over the threshold. You therefore owe 4K income tax on dividends. However given that the company withheld 2k already on your behalf, you pay revenue 2k directly. Therefore you still pay 40% in total.

If you only had 20k other income, your marginal rate would be 20%, and you wouldn’t pay any further income tax on the dividend.

Thanks for that, perfect explanation.

So still a tax avoidance withing limits, but not near as big as I portrayed.

I genuinely misunderstood how it worked, but thank you for the explanation.

Peregrinus

efanton wrote: »

Thanks for that, perfect explanation.

So still a tax avoidance withing limits, but not near as big as I portrayed.

I genuinely misunderstood how it worked, but thank you for the explanation.

Where's the tax avoidance?

efanton

Peregrinus wrote: »

Where's the tax avoidance?

If you only had 20k other income, your marginal rate would be 20%, and you wouldn’t pay any further income tax on the dividen

d

efanton

Leo is now writing love letters to MaryLou

https://www.irishtimes.com/news/politics/talks-between-sf-and-fg-likely-as-varadkar-writes-to-mcdonald-1.4191901

this should be interesting if not entertaining for the next week or so.
Can hardly see them kissing and making up.

Peregrinus

Peregrinus wrote: »

Where's the tax avoidance?

tobsey wrote: »

If you only had 20k other income, your marginal rate would be 20%, and you wouldn’t pay any further income tax on the dividend.

That's not tax avoidance. You suffer 20% tax on the gross amount of the dividend, and your marginal tax rate is 20%, so the tax saving from taking the income in the form of a dividend is nil.

Option A: I run my business myself. I earn 10k. I pay income tax at 20%. Net amount in my pocket, 8k.

Option B: I run my business through a company, of which I am the sole shareholder. The company earns 10k, and declares a dividend (payable to me) of 10k. It withholds 2k from the the dividend, paying it over to the revenue, and pays the remaining 8k to me. I am treated as having received a dividend of 10k. My personal marginal rate is 10%, so my liablity to tax on the dividend is 2k, but I get credit for the 2k witholding tax already paid by the company. Additional income tax due: nil. Net amount in my pocket: 8k.

Good loser

efanton wrote: »

Thanks for that, perfect explanation.

So still a tax avoidance withing limits, but not near as big as I portrayed.

I genuinely misunderstood how it worked, but thank you for the explanation.

In your previous post you referred to yourself as an economics ignoramous.
There's a perfect illustration.

efanton

Good loser wrote: »

In your previous post you referred to yourself as an economics ignoramous.
There's a perfect illustration.

So by not paying PRSI they will not save money.

I dont profess to know everything, I'm quite willing to be corrected and learn, thats what smart people do.

Good loser

Princess Consuela Bananahammock wrote: »

Why are specifying "rapacious" landlords? Are non-rapacious landlords liable for different treatment for some reason? At what point does a landlord move from one category to the other?

Anyway, in asnwer to your question, no - just tax on profits. Why should they pay on the value of a posession? (Bear in mind: I'm assuming it's an owner-occupier situation: if they person owns two or more hosues, then yes - I'd agree with you; and have stated as such)

And bear in mind, what someone else is paying is irrelevant.

There were property taxes even before income taxes were introduced.
Property taxes - including land, houses, commercial, fisheries, mines - paid for the workhouses in the mid 1800's. The system was run by Poor Law Guardians.



LPT is a wealth/asset tax levied on owners. 75% of the wealth of Ireland Inc. comprises residential property. No inherent reason why it should not carry a charge. Same as a car tax really. And at a much lower % of the value.


In Seattle the charge is 1% of the value of the house PER ANNUM. Be thankful.

efanton

Good loser wrote: »

There were property taxes even before income taxes were introduced.
Property taxes - including land, houses, commercial, fisheries, mines - paid for the workhouses in the mid 1800's. The system was run by Poor Law Guardians.



LPT is a wealth/asset tax levied on owners. 75% of the wealth of Ireland Inc. comprises residential property. No inherent reason why it should not carry a charge. Same as a car tax really. And at a much lower % of the value.


In Seattle the charge is 1% of the value of the house PER ANNUM. Be thankful.

But there is a difference between being rich and being wealthy.
A rich person has a high income or lots of money and almost certainly assets such as a house too. A wealthy person could have little income or money but a single valuable asset such as a big house.

The example you give about property taxes being brought in in the 1800's is that at that time those with property were also rich. not only did they have property but they had money too.

If you want a property tax that's equitable you want to target the rich or those who can afford those taxes, otherwise you start having to put exceptions in for those that simply could not afford them. Its nonsensical to suggest a pensioner on a state pension should pay the same property tax as someone with a very high wage.
If you are going to tax someone on their income or how much money they have anyway it seems perfectly obvious that you do this through income tax.

Princess Consuela Bananahammock

Good loser wrote: »

There were property taxes even before income taxes were introduced.
Property taxes - including land, houses, commercial, fisheries, mines - paid for the workhouses in the mid 1800's. The system was run by Poor Law Guardians.



LPT is a wealth/asset tax levied on owners. 75% of the wealth of Ireland Inc. comprises residential property. No inherent reason why it should not carry a charge. Same as a car tax really. And at a much lower % of the value.


In Seattle the charge is 1% of the value of the house PER ANNUM. Be thankful.

You're making the same mistake: wealth is not the same as income. 1% of a 500k house is still €5,000. This only makes sense if everyone with a home has 5k disposable income at the end of the year.

You highlighed the bit abotu taxing possessions, but never addressed it: how many possessions do you have? And hoe many of them are taxed purely by cirture of ownership?

Peregrinus

efanton wrote: »

But there is a difference between being rich and being wealthy.
A rich person has a high income or lots of money and almost certainly assets such as a house too. A wealthy person could have little income or money but a single valuable asset such as a big house.

The example you give about property taxes being brought in in the 1800's is that at that time those with property were also rich. only only did they have property but they had money too.

If you want a property tax that's equitable you want to target the rich or those who can afford those taxes, otherwise you start having to put exception in for those that simply could not afford them. Its nonsensical to suggest a pensioner on a state pension should pay the same property tax as someone with a very high wage.
If you are going to tax someone on their income or how much money they have anyway it seems perfectly obvious that you do this through income tax.

Two thoughts: the problem with an assets tax that excludes someone's home is that it encourages people to shelter as much as possible of their wealth in their home, rather than in other assets - i.e. invest as much of your wealth as you can on your home. And this, of course, serves to drive up the price of homes, which from a social policy point of view is not a good idea.

The second thought is that you frame this in terms of "if you're going to tax someone on their income" but, of course, an asset tax doesn't tax people on their income, but on their assets. The idea is that people who have signficant assets should be incentivised to use them productively. If you have a signficant amount of your wealth tied up in a home that is larger than you need and that generates no income, that's ineffecient; both you and society would be better off if you reallocated your wealth so that less of it was tied up in your house, and more was employed productively. A property tax that includes homes incentives people not to tie up wealth in their homes to a greater extent than is needed to provide the housing they want.

efanton

Peregrinus wrote: »

Two thoughts: the problem with an assets tax that excludes someone's home is that it encourages people to shelter as much as possible of their wealth in their home, rather than in other assets - i.e. invest as much of your wealth as you can on your home. And this, of course, serves to drive up the price of homes, which from a social policy point of view is not a good idea.

The second thought is that you frame this in terms of "if you're going to tax someone on their income" but, of course, an asset tax doesn't tax people on their income, but on their assets. The idea is that people who have signficant assets should be incentivised to use them productively. If you have a signficant amount of your wealth tied up in a home that is larger than you need and that generates no income, that's ineffecient; both you and society would be better off if you reallocated your wealth so that less of it was tied up in your house, and more was employed productively. A property tax that includes homes incentives people not to tie up wealth in their homes to a greater extent than is needed to provide the housing they want.

I agree with what you are saying. But a home that is owner occupied couldn't really be called a productive asset.

If someone had a home and bought other properties too then property tax begins to make sense.

But in order for them to have bought those additional properties they would have to have earned that money and paid income tax.

Landlords that buy with the intention of renting would give a damn about property taxes these will just be passed on to the tenant anyhow. So now all you have achieved is drive up the costs of rent which from a social policy point of view is not a good idea either.

By transferring it to income tax everyone pays according to what they can afford whether they be homeowner, landlord or tenant.
The idea that a rich person could invest in property to avoid tax simply would not be the case, they could certainly invest after paying the additional income tax, but they would be doing so anyhow.

Transferring property taxes to income tax reduces the price of rents and cost of home ownership making them more attainable and would reduce the demand on social housing.

The elephant in the room of course is what to do with undeveloped sites?

Peregrinus

Princess Consuela Bananahammock wrote: »

You're making the same mistake: wealth is not the same as income. 1% of a 500k house is still €5,000. This only makes sense if everyone with a home has 5k disposable income at the end of the year.

Actually, no. The logic for a tax on homes is not that everybody who has a 500k home also has a 5k disposable income. It's that the 500k home is only worth 500k because the City of Seattle spends large amounts providing roads, streetlighting, public transport, police, fire brigades and the Lord knows what else in providing services and amenities to the home. Without these services and amenities the home would be worth a fraction of 500k. And why should public money be spent enhancing the value of your private asset? The logic here is that a tax on the value of your home is justified because it represents payment for the benefits that you receive, at the public expense, as the owner of a home.

It's no answer to say that you pay for these services through your income tax. A non-homeowner on your income pays the same income tax as you do, but he does not get his proporty enhanced in value at public expense as you do. It is therefore right that you should pay more than he does, and that the more you pay should be proportioned to the the increase in your wealth that you derive from the services of the local government.

Peregrinus

efanton wrote: »

I agree with what you are saying. But a home that is owner occupied couldn't really be called a productive asset.

That's the point; why should we give a wealth tax exemption to people for investing their wealth in unproductive assets? As a society, we want the wealthy to use their wealth productively, so a tax-break for wealth not used productively is self-harming.

efanton

Peregrinus wrote: »

Actually, no. The logic for a tax on homes is not that everybody who has a 500k home also has a 5k disposable income. It's that the 500k home is only worth 500k because the City of Seattle spends large amounts providing roads, streetlighting, public transport, police, fire brigades and the Lord knows what else in providing services and amenities to the home. Without these services and amenities the home would be worth a fraction of 500k. And why should public money be spent enhancing the value of your private asset? The logic here is that a tax on the value of your home is justified because it represents payment for the benefits that you receive, at the public expense, as the owner of a home.

It's no answer to say that you pay for these services through your income tax. A non-homeowner on your income pays the same income tax as you do, but he does not get his proporty enhanced in value at public expense as you do. It is therefore right that you should pay more than he does, and that the more you pay should be proportioned to the the increase in your wealth that you derive from the services of the local government.

That is pure nonsense. A non home owner will be renting property.
Landlords adjust their rents to take into account the cost of any property tax or services. The tenant effectively pays the property tax and services and the landlord get away scot free for the taxation on the property they rent.
The tenants get EXACTLY the same benefit as those that own their own property. The street lights aren't switched off outside rented properties, everyone property owner or not benefits from public amenities

Peregrinus

efanton wrote: »

That is pure nonsense. A non home owner will be renting property.
Landlords adjust their rents to take into account the cost of any property tax or services. The tenant effectively pays the property tax and services and the landlord get away scot free for the taxation on the property they rent.
The tenants get EXACTLY the same benefit as those that own their own property. The street lights aren't switched off outside rented properties, everyone property owner or not benefits from public amenities

Everybody gets the same immediate utility from the streetlights, streets, public transport, etc. The landlord choosed to monetise this utility Iin effect) by renting it out to his tenants; the owner-occupier takes advantage of the utility himself, and foregoes the opportunity to monetise it by renting it out (just as he foregoes the opportunity to monetise the home itself by renting it out).

But the property owner, whether an occupier or not, also gets a benefit beyond the immediate utility, which is an enhancement in the value of their asset. The landlord does not rent this utility out or pass it on to his tenants; it remains with him, just as it does with the owner-occupier. Both, when they sell their property, will get a higher price than they would if there were no roads, services, streetlighting, public transport, etc serving the property. And therefore it is right to tax the owner of the property, whether landlord or owner-occupier, in respect of this publicly-funded benefit that accrues to him privately.

Johnboy1951

The idea of some seems to be that disposable income should not be spent to the benefit of those that earned it.
Else why would you want to tax a person's home in which they have invested their disposable income?
If they put that wealth into precious metals, and stored it someplace, should that be taxed also?
What about those that stuff their mattresses with cash?

Maybe we should all buy works of art, of various types, with our 'wealth' as these are not subject to property tax, although they definitely are the property of the owner.

I fail to see any logic in taxing improvements a person makes to their home to better their living conditions.

There was a post comparing LPT to car tax ...... so ridiculous it is not even funny.
The shelter of a home is a necessary requirement for tolerable life.
I doubt anyone would really regard a motorised vehicle in the same category.
Does the tax on a vehicle change with a new valuation of said vehicle?

Tax 'wealth' when it is generated.
Whether that is when income is earned, or an asset is disposed of for a profit or an inheritance is received.
Tax it then.
Tax it properly.
Leave no loopholes.

The spending of that 'wealth' is heavily taxed also, by the application of V.A.T. and that includes any spending on improvements to a person's home.

How many times must the same 'income' (earned and otherwise) be taxed?

An alternative, if you really want to tax 'wealth' is to apply a tax on the insurance valuation of ALL property regardless type or origin.

Peregrinus

Johnboy1951 wrote: »

The idea of some seems to be that disposable income should not be spent to the benefit of those that earned it.
Else why would you want to tax a person's home in which they have invested their disposable income?
If they put that wealth into precious metals, and stored it someplace, should that be taxed also?
What about those that stuff their mattresses with cash?

Maybe we should all buy works of art, of various types, with our 'wealth' as these are not subject to property tax, although they definitely are the property of the owner.

I fail to see any logic in taxing improvements a person makes to their home to better their living conditions..

We prefer people to invest their wealth productively, in ways that generate benefits like employment, economic activity, etc for the community at large. The last thing we want them to do is turn it into gold and store it in a matress.

Therefore a wealth tax, under which you have to pay say 0.5% of the value of your assets to the state every year gives you an incentive to invest your wealth in assets that generate at least a 0.5% return. It doesn't require you to do that; you're free to store your wealth in the matress and pay the wealth tax out of earned income; but it gives you a reason not to do that. It incentivizes, without compelling, the behaviour which is more beneficial to society.

efanton

Peregrinus wrote: »

Everybody gets the same immediate utility from the streetlights, streets, public transport, etc. The landlord choosed to monetise this utility Iin effect) by renting it out to his tenants; the owner-occupier takes advantage of the utility himself, and foregoes the opportunity to monetise it by renting it out (just as he foregoes the opportunity to monetise the home itself by renting it out).

But the property owner, whether an occupier or not, also gets a benefit beyond the immediate utility, which is an enhancement in the value of their asset. The landlord does not rent this utility out or pass it on to his tenants; it remains with him, just as it does with the owner-occupier. Both, when they sell their property, will get a higher price than they would if there were no roads, services, streetlighting, public transport, etc serving the property. And therefore it is right to tax the owner of the property, whether landlord or owner-occupier, in respect of this publicly-funded benefit that accrues to him privately.

you really need to take two steps back and think through your own logic.
Street lighting is NOT installed so that the value of property rises. Nor it the function of any other public utility or amenity. So please take the this nonsense out of the discussion.

You arguments are becoming more ridiculous and irrational. Why should a landlord expect a tenant to pay the property taxes and service charges if what you are trying to allude to is true.

Service and amenities are there for the use and benefit of ALL citizens. They were publicly funded for the benefit of the public. Now isn't that a mad coincidence? They were never intended to increase property values, that's just a by product.

efanton

Johnboy1951 wrote: »

The idea of some seems to be that disposable income should not be spent to the benefit of those that earned it.
Else why would you want to tax a person's home in which they have invested their disposable income?
If they put that wealth into precious metals, and stored it someplace, should that be taxed also?
What about those that stuff their mattresses with cash?

Maybe we should all buy works of art, of various types, with our 'wealth' as these are not subject to property tax, although they definitely are the property of the owner.

I fail to see any logic in taxing improvements a person makes to their home to better their living conditions.

There was a post comparing LPT to car tax ...... so ridiculous it is not even funny.
The shelter of a home is a necessary requirement for tolerable life.
I doubt anyone would really regard a motorised vehicle in the same category.
Does the tax on a vehicle change with a new valuation of said vehicle?

Tax 'wealth' when it is generated.
Whether that is when income is earned, or an asset is disposed of for a profit or an inheritance is received.
Tax it then.
Tax it properly.
Leave no loopholes.

The spending of that 'wealth' is heavily taxed also, by the application of V.A.T. and that includes any spending on improvements to a person's home.

How many times must the same 'income' (earned and otherwise) be taxed?

An alternative, if you really want to tax 'wealth' is to apply a tax on the insurance valuation of ALL property regardless type or origin.

Exactly.

I suspect we are listening to a landlord. Want, want, want, but by God they are not going to pay for it. The nonsense arguments they use to try make a point without making it plain what they are saying is cringe worthy.

I wouldn't even agree with the insurance idea because this will be a tax deductible.

If public service are to provided then public money should be used to provide these services. They should be paid from income tax revenue.

Johnboy1951

Peregrinus wrote: »

We prefer people to invest their wealth productively, in ways that generate benefits like employment, economic activity, etc for the community at large. The last thing we want them to do is turn it into gold and store it in a matress.

Therefore a wealth tax, under which you have to pay say 0.5% of the value of your assets to the state every year gives you an incentive to invest your wealth in assets that generate at least a 0.5% return. It doesn't require you to do that; you're free to store your wealth in the matress and pay the wealth tax out of earned income; but it gives you a reason not to do that. It incentivizes, without compelling, the behaviour which is more beneficial to society.

Who is this 'WE' whose preferences should override the ownership of that wealth which has already been heavily taxed?


Would you not consider that if a person can invest in precious metals, or art or other such 'non productive' investment, that they will be inclined to do so rather than take a chance on some scheme to try to earn income ffom another's labour? ...... with all the costs and effort that has!

If a person does the above and owns the business, is that business regarded as wealth even though it might not be generating a profit?

If you want a property tax then tax all property equally, not just the low hanging fruit ..... that property that is visible and immovable.

Charlie's extravagant shirts would be included in the wealth reckoning for this property tax!

Sam Russell

Property (residences) used to be taxed under rates. That was abolished following the 1977 FF election win, along with Motor Tax.

Property was always taxed by stamp duty on transfer of ownership. This was increased to 9% at one stage, but has been substantially reduced since. Primary residences were exempt from capital gains tax, but 2nd homes were subject to CG tax.

There have been several attempts at property tax, but the current one, based on supposed market value, is arbitrary since a significant number of properties are never going to be on the market, so are impossible to value. However, it is the current system.

Perhaps a better tax might be based on site value, or some calculation based on floor area and facilities - such as detached, semi-d, or terraced, garage, no of bathrooms, etc.

However, whatever system is chosen, there will always be people who consider themselves hard done by. It would seem to be equitable that property is taxed so that the facilities that are required to support property are paid for by property owners. It is usually that it is local authorities that are responsible for those facilities and they should be the recipients of that property tax, and those LAs should be required to be accountable for their handling of the tax. That bit is missing.

efanton

Sam Russell wrote: »

Property (residences) used to be taxed under rates. That was abolished following the 1977 FF election win, along with Motor Tax.

Property was always taxed by stamp duty on transfer of ownership. This was increased to 9% at one stage, but has been substantially reduced since. Primary residences were exempt from capital gains tax, but 2nd homes were subject to CG tax.

There have been several attempts at property tax, but the current one, based on supposed market value, is arbitrary since a significant number of properties are never going to be on the market, so are impossible to value. However, it is the current system.

Perhaps a better tax might be based on site value, or some calculation based on floor area and facilities - such as detached, semi-d, or terraced, garage, no of bathrooms, etc.

However, whatever system is chosen, there will always be people who consider themselves hard done by. It would seem to be equitable that property is taxed so that the facilities that are required to support property are paid for by property owners. It is usually that it is local authorities that are responsible for those facilities and they should be the recipients of that property tax, and those LAs should be required to be accountable for their handling of the tax. That bit is missing.

The problem with it being set by local authorities is that with every local election it will be a race to the bottom, every councillor will want to keep this tax at existing the rate but yet want to spend more money. The two are simply not compatible.

Then you have the issue of many people through no fault of their own living on a low income, pensioners, disabled, etc but owning their own home. Income thresholds could be be put in place, but now you are relating this tax to the earnings of the occupier. You might as add it to the income tax, less administration and less wastage of revenue.
Then what to do with multiple occupancy? Are you going to hit one person with the tax while the others dont pay?

At the end of the day local amenities and services have to be paid for, the government knows exactly what these cost from year to year, and it would be far simpler to simply scrap the whole idea altogether and adjust the income tax accordingly. With the cost spread over far more people it would mean those paying the tax now will pay less, but no one getting hit for thousands of euros a year.

Princess Consuela Bananahammock

Peregrinus wrote: »

Actually, no. The logic for a tax on homes is not that everybody who has a 500k home also has a 5k disposable income. It's that the 500k home is only worth 500k because the City of Seattle spends large amounts providing roads, streetlighting, public transport, police, fire brigades and the Lord knows what else in providing services and amenities to the home. Without these services and amenities the home would be worth a fraction of 500k. And why should public money be spent enhancing the value of your private asset? The logic here is that a tax on the value of your home is justified because it represents payment for the benefits that you receive, at the public expense, as the owner of a home.

It's no answer to say that you pay for these services through your income tax. A non-homeowner on your income pays the same income tax as you do, but he does not get his proporty enhanced in value at public expense as you do. It is therefore right that you should pay more than he does, and that the more you pay should be proportioned to the the increase in your wealth that you derive from the services of the local government.

There's the fallacy: entitlement. The idea of homeowners or non-homeownders benefitting more is ridiculous - the services are their for society, not for investments and useage and benefits are not charted. Parents benefit more for education - should they pay more? They have kids who are going to grow up and support them with added income when they're older, so it could be deemed an investment. Of courese, the pupose of having kids is not normally as an investment, but then buying a house isn't always an investment either.

You're alos refusing to address the issue of income: how does someone wtih their own home but limited income - possibly be choice - settle a tax bill at the end of the year? You can't just hand over 1% of a property to the Revenue!! Or are you assuming that a homeowner automatically has liquid funds?

What's the point in paying a 10k a year mortgage for most of your working life, if you then have to pay 10k a year in tax when the mortgage is paid off?

Sam Russell

efanton wrote: »

The problem with it being set by local authorities is that with every local election it will be a race to the bottom, every councillor will want to keep this tax at existing the rate but yet want to spend more money. The two are simply not compatible.

Then you have the issue of many people through no fault of their own living on a low income, pensioners, disabled, etc but owning their own home. Income thresholds could be be put in place, but now you are relating this tax to the earnings of the occupier. You might as add it to the income tax, less administration and less wastage of revenue.
Then what to do with multiple occupancy? Are you going to hit one person with the tax while the others dont pay?

At the end of the day local amenities and services have to be paid for, the government knows exactly what these cost from year to year, and it would be far simpler to simply scrap the whole idea altogether and adjust the income tax accordingly. With the cost spread over far more people it would mean those paying the tax now will pay less, but no one getting hit for thousands of euros a year.

1. I never said it would be the LA that set the rate. The central Gov would supplement the LPT if required.

2. Inability to pay is a central Gov function and could be covered by social welfare or by the Revenue.

3. It is the owner that would be liable, whoever that might be. In multiple occupancy, that is not an issue.

The whole point of multiple tax headings is to broaden those who are paying tax on the basis that if one does not get you, another one will, and all citizens pay some tax, be it income tax, VAT, LPT, Motor Tax, etc. Consumption taxes are considered regressive (hit the poor most as a % of income) while income taxes tend to be progressive (hit the wealthier more).

LPT hits the property owner, who would be considered wealthier than those who do not own property. Other property, such as antiques, works of art, etc. tend to be difficult to value and are less obvious that a residential property.

efanton

Sam Russell wrote: »

1. I never said it would be the LA that set the rate. The central Gov would supplement the LPT if required.

2. Inability to pay is a central Gov function and could be covered by social welfare or by the Revenue.

3. It is the owner that would be liable, whoever that might be. In multiple occupancy, that is not an issue.

The whole point of multiple tax headings is to broaden those who are paying tax on the basis that if one does not get you, another one will, and all citizens pay some tax, be it income tax, VAT, LPT, Motor Tax, etc. Consumption taxes are considered regressive (hit the poor most as a % of income) while income taxes tend to be progressive (hit the wealthier more).

LPT hits the property owner, who would be considered wealthier than those who do not own property. Other property, such as antiques, works of art, etc. tend to be difficult to value and are less obvious that a residential property.

Sorry, I missunderstood you when you said

and those LAs should be required to be accountable for their handling of the tax

I just dont see the point of an property tax if you are going to make exceptions for genuine cases of hardship. As you have already agreed income taxes tend to be progressive so why not just transfer the cost to that.

The argument about it widening the tax band really doesnt work if you are considering family homes. I can understand that argument being used for investment properties, where someone could divest themselves of a property when the economy is not doing well or there is a property crash, but it makes little sense for properties that are primary residences. After all if you only own one property you are hardly going to make yourself homeless to avoid a tax.

I suppose a compromise might work where only commercial properties and any additional residential properties that are owned are liable for a property tax but the primary home is taxed through income tax.

Johnboy1951

Sam Russell wrote: »

1. I never said it would be the LA that set the rate. The central Gov would supplement the LPT if required.

2. Inability to pay is a central Gov function and could be covered by social welfare or by the Revenue.

3. It is the owner that would be liable, whoever that might be. In multiple occupancy, that is not an issue.

The whole point of multiple tax headings is to broaden those who are paying tax on the basis that if one does not get you, another one will, and all citizens pay some tax, be it income tax, VAT, LPT, Motor Tax, etc. Consumption taxes are considered regressive (hit the poor most as a % of income) while income taxes tend to be progressive (hit the wealthier more).

LPT hits the property owner, who would be considered wealthier than those who do not own property. Other property, such as antiques, works of art, etc. tend to be difficult to value and are less obvious that a residential property.

It hits only the property that is most easily hit.

What about the guy who spends his wealth on a valuable vehicle which he never takes on the road?
Just like art, antiques etc they can have values even greater than houses!
You can be sure the vast majority are insured so they have already been valued!

So why not value all possessions and tax those?
Your wardrobe has a value etc etc ...... golf clubs ..... and lots of other items that personal income has been spent on after it has been taxed.
Yet you want to select ONLY home owners for this 'special' tax.

I have yet to read an explanation why it should be so.