Let's take a moment to talk about taxation

wiggle16

relax carry on wrote: »

It's CAT. CAPITAL ACQUISITION TAX.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/index.aspx

NO IT'S THE DEATH TAX



:pac:

Geuze

relax carry on wrote: »

Marginal rate is 40% not 50%.

40% tax
4% PRSI
USC at 4.5%, and then 8% after 70k.

So the MTR is 48.5% for people earning less than the median wage.

Once you hit 70k, the MTR is 52%.



The top MTR is not the problem, 50% MTR are common elsewhere.

Even the USA has a top MTR of 37% federal plus 7.65% FICA and Medicare, plus State/local taxes.

The problem is that it kicks in at under 40k!!!

We need four rates, and the top combined rate of 50% should start at maybe 2x -3x median earnings.

Geuze

jams100 wrote: »

The capital gains tax is the worst one imo, you work hard all your life paying your taxes which aren't low and you leave your kids something and then wham! The death tax strikes. And yes, im well aware there is a threshold

Note that most people don't pay CAT, due to the allowances.

OK, if you are an only child in D4 or D6, yes, you face a large CAT bill.

theguzman

Geuze wrote: »

Note that most people don't pay CAT, due to the allowances.

OK, if you are an only child in D4 or D6, yes, you face a large CAT bill.

The average house price is €270k, then you have farmland and other property, it is incredibly unjust that wealth and property accumulated by people who already paid an enormous tax burden should be taxed again, it is an anti-family measure is downright disgraceful.

I know a farmer who would be in his early forties and the father in his mid-seventies, they are going to split the farm and let some of the land to his young son who is only around 5. The farm is worth well over a million, they would be facing paying a few hundred thousand GCT and then repeat it again in less than 25-30 years time. It is the most disgusting tax imaginable and incredibly unfair.

There has been several instances of people having to sell beloved family homes and or farms to pay this tax to inherit the remainder if they didn't have the funds to pay the CGT upfront, often if a farmer dies he/she could let the money to a daughter and the land to a son putting the son in a precarious state to pay the CGT compared to if he got lock, stock and barrel. The situation gets even more grotesque when you start to inherit land from a cousin or non-immediate family member.

sameoldname

theguzman wrote: »

The average house price is €270k, then you have farmland and other property, it is incredibly unjust that wealth and property accumulated by people who already paid an enormous tax burden should be taxed again, it is an anti-family measure is downright disgraceful.

I know a farmer who would be in his early forties and the father in his mid-seventies, they are going to split the farm and let some of the land to his young son who is only around 5. The farm is worth well over a million, they would be facing paying a few hundred thousand GCT and then repeat it again in less than 25-30 years time. It is the most disgusting tax imaginable and incredibly unfair.

There has been several instances of people having to sell beloved family homes and or farms to pay this tax to inherit the remainder if they didn't have the funds to pay the CGT upfront, often if a farmer dies he/she could let the money to a daughter and the land to a son putting the son in a precarious state to pay the CGT compared to if he got lock, stock and barrel. The situation gets even more grotesque when you start to inherit land from a cousin or non-immediate family member.

Did you just make that whole story up? Tax relief on farm inheritance means that anything up to €3.35 million is tax free.

Unless they didn't plan to farm it then they'd have to pay CAT the same as everyone else.

wiggle16

theguzman wrote: »

The average house price is €270k, then you have farmland and other property, it is incredibly unjust that wealth and property accumulated by people who already paid an enormous tax burden should be taxed again, it is an anti-family measure is downright disgraceful.

I know a farmer who would be in his early forties and the father in his mid-seventies, they are going to split the farm and let some of the land to his young son who is only around 5. The farm is worth well over a million, they would be facing paying a few hundred thousand GCT and then repeat it again in less than 25-30 years time. It is the most disgusting tax imaginable and incredibly unfair.

There has been several instances of people having to sell beloved family homes and or farms to pay this tax to inherit the remainder if they didn't have the funds to pay the CGT upfront, often if a farmer dies he/she could let the money to a daughter and the land to a son putting the son in a precarious state to pay the CGT compared to if he got lock, stock and barrel. The situation gets even more grotesque when you start to inherit land from a cousin or non-immediate family member.

Would you go 'way!

I find it nigh-on impossible to believe that your farmer friend is unaware of agricultural relief and that therefore the tax bill you say he faces is non-existent

https://www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-part11.pdf

wiggle16

sameoldname wrote: »

Did you just make that whole story up? Tax relief on farm inheritance means that anything up to €3.35 million is tax free.

Unless they didn't plan to farm it then they'd have to pay CGT the same as everyone else.

SNAP! :pac:

jams100

Geuze wrote: »

Note that most people don't pay CAT, due to the allowances.

OK, if you are an only child in D4 or D6, yes, you face a large CAT bill.

Yea I understand that, I still don't agree with it. If you or someone else works hard you shouldn't be taxed on that same work when you die. Let's be honest if you work hard your probably on the high rate of tax which is 40% and thats before usc, prsi etc.
If we weren't taxed as much on our salaries then yes I could understand it but we are taxed like mad.
To the previous poster yes I meant CAT and not CGT...long week!

Geuze

theguzman wrote: »

The average house price is €270k, then you have farmland and other property, it is incredibly unjust that wealth and property accumulated by people who already paid an enormous tax burden should be taxed again, it is an anti-family measure is downright disgraceful.

I know a farmer who would be in his early forties and the father in his mid-seventies, they are going to split the farm and let some of the land to his young son who is only around 5. The farm is worth well over a million, they would be facing paying a few hundred thousand GCT and then repeat it again in less than 25-30 years time. It is the most disgusting tax imaginable and incredibly unfair.

There are very generous CAT reliefs for businesses and farms.

Farm worth 1m is exempted 90%, subject to conditions.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-reliefs/agricultural-relief/what-are-the-conditions-for-agricultural-relief.aspx

Overview
If you inherit or receive a gift of agricultural property, you may qualify for Agricultural Relief. This relief reduces the taxable value of the property, including land, by 90%. The relief is subject to conditions.

If the agricultural property comprised in your gift or inheritance does not qualify for Agricultural Relief, it may qualify for Business Relief.

wiggle16

jams100 wrote: »

Yea I understand that, I still don't agree with it. If you or someone else works hard you shouldn't be taxed on that same work when you die. Let's be honest if you work hard your probably on the high rate of tax which is 40% and thats before usc, prsi etc.
If we weren't taxed as much on our salaries then yes I could understand it but we are taxed like mad.
To the previous poster yes I meant CAT and not CGT...long week!

I'd take the view that when you die you're not around to care what happens to your assets, but I know not everyone feels that way.

The capital taxes exist to offset the indefinite accumulation and concentration of wealth in the hands of a lucky few. If you inherit several million quid that you didn't do a tap to earn then why shouldn't you have to put some of it back in the pot? You're still MUCH better off than when you started.

To me it just seems like greed and entitlement.

ETA: that's not to say I think you're greedy or entitled, I don't - I mean my example of someone inheriting millions and not wanting to pay any CAT is greedy.

Geuze

theguzman wrote: »

I know a farmer who would be in his early forties and the father in his mid-seventies, they are going to split the farm and let some of the land to his young son who is only around 5. The farm is worth well over a million, they would be facing paying a few hundred thousand GCT and then repeat it again in less than 25-30 years time. It is the most disgusting tax imaginable and incredibly unfair.

I am not a massive fan of CAT, but come on now, this story is not true.

Note that Ireland is a country where farmers have a lot of influence.

Do you actually think that TDs would want a system where farms are subject to CAT?

Obviously not.

So farmers get a 90% cut in the value of the farm.

100 acre farm = 1m value

Value for CAT = 100,000, no CAT paid.

sameoldname

jams100 wrote: »

Yea I understand that, I still don't agree with it. If you or someone else works hard you shouldn't be taxed on that same work when you die. Let's be honest if you work hard your probably on the high rate of tax which is 40% and thats before usc, prsi etc.
If we weren't taxed as much on our salaries then yes I could understand it but we are taxed like mad.
To the previous poster yes I meant CAT and not CGT...long week!

But the person receiving is being taxed, not the dead person. And the person receiving probably did none of the hard work that accumulated that wealth.

Geuze

jams100 wrote: »

Yea I understand that, I still don't agree with it. If you or someone else works hard you shouldn't be taxed on that same work when you die. Let's be honest if you work hard your probably on the high rate of tax which is 40% and thats before usc, prsi etc.
If we weren't taxed as much on our salaries then yes I could understand it but we are taxed like mad.
To the previous poster yes I meant CAT and not CGT...long week!

Taxes are not high in Ireland, overall.

We are not "taxed like mad".

Check out Denmark.


But yes, I accept your point - you accumulate assets out of taxed income, only for the transfer of the assets to possibly be taxed after you die.

One solution is to use the available reliefs to make sure your CAT = nil.

jams100

wiggle16 wrote: »

I'd take the view that when you die you're not around to care what happens to your assets, but I know not everyone feels that way.

The capital taxes exist to offset the indefinite accumulation and concentration of wealth in the hands of a lucky few. If you inherit several million quid that you didn't do a tap to earn then why shouldn't you have to put some of it back in the pot? You're still MUCH better off than when you started.

To me it just seems like greed and entitlement.

ETA: that's not to say I think you're greedy or entitled, I don't - I mean my example of someone inheriting millions and not wanting to pay any CAT is greedy.

Your point on the person earning millions is fair, but let's be honest if your earning millions your probably going to have a good accountant who will find a way around it or you won't be a tax resident or however they do it.

If I choose to work hard all my life to set my kids up for the future then great, the government are going to tax the f**k out of me for that, which I dont mind as those taxes will go towards roads, hospitals, welfare etc. Even though there is so much wastage, but that is a story for another day!

Bottom line for me is that CAT is a death tax, one last chance to get another few euro out of you before your six feet under.

Look it probably winds me up more that the money they'd get from this tax would be wasted, like spending 2 billion for a hospital, anyway I'm probably too young to be thinking about CAT

Stovepipe

Mad_maxx wrote: »

the state pension and added benefits are also far too generous , add in the fact many are on the state pension nearly as long as they were working

why do you think they are generous? Eu 203 a week doesn't go far and there is no shortage of pensioners living in poverty. If a person has contributed to a pension for 40 years, they rarely live for another 40 by the time they get to draw the State pension. People living into their 90s is actually exceptional, not as common as people think. My future State pension has been pushed back to 68, so now I have to fund the shortfall. Workers are having to try to put more and more aside to help fund this shortfall, so it is having an effect on my current income, well before I draw it down.

StupidLikeAFox

Inheritance tax is fair in the sense that it prevents wealth being hoarded for many generations. You can argue about the threshold but the concept is sound

IAMAMORON

IAMAMORON wrote: »

The pension bubble is coming ... it is going to be nasty.

What is that in relation to?

Mules

I wouldn't mind paying higher tax in return for decent public services, but every service is stretched to the limit.
it feels like we aren't getting our values worth. Mind you we are still spending a massive amount to repay the bailout so that might be why.

I think everyone should pay a decent bit in income tax, even people on social welfare or very low incomes because it seems only right that everyone contributes to pay for public services.

I think the rent on council owned property should be higher so there isn't such a difference between that and the cost of renting privately. I alao think everyone should have the option of very basic accomodation in exchange for paying low rent but the government dont want to go that route. I think they were mad to get rid of bed sits.

suicide_circus

As others have said - i don't care what tax i pay if waste is minimal and the services and infrastructure we get in return are of a good standard.

However, i don't believe that waste is minimal. I don't believe that tax euros are spent efficiently.
I do believe there is significant administrative and middle management bloat. I do believe that unscrupulous practices take place in order to justify budgets.

I have friends and family in various parts of Europe. Some pay more tax than us but boy oh boy do they get it back in spades.

I really don't think i want to be old in Ireland.

SpacialNeeds

suicide_circus wrote: »

I really don't think i want to be old in Ireland.

Don't worry, if the last 12 months have shown anything, it's that you won't be for long

theguzman wrote: »

When they die and pass it on to their heir then the government will swallow a massive share of it. All inheritance tax should be scrapped to a limit of say below €10m.

It is so easy to gift family a large chunk of assets tax free before you die.

What benefit is there in the bloated systems we have? Is it literally nepotism, someone's useless brother getting a job etc?

I've worked with many, many absolute potatoes in the HSE.

paw patrol

Mike Murdock wrote: »

1/3rd is on Pensions in fairness.

The €22 billion on healthcare boggles the mind. With that level of funding for a population of 4.5 million, we should have a world class health service.

The health sector is frustrating for sure but at least there is the notion that it is offering a beneficial service to all citizens.

The money shovelled into the NGO sector is a worse waste. It's just the state paying controlled opposition staffed (i.e. getting paid ) by all the usual suspects - journos and junior/wannabe/failed politicians all sucking on the states teat.

on a more personal level ,I object to quite a number of those quangos taking my money that I earned and turn around denouncing me as a bad person - for reference all the racist NGOs, and tweets from National Womens Council of ireland.

Does that not strike you as an odd set-up?
What benefit do these group bring to all society ? Do they ever fix their issues?
We know the answer is no because that would end the cash flow.

suicide_circus

The NGO/Charity industrial complex in Ireland is shocking.

irelandrover

Geuze wrote: »

HOWEVER

the entry point to the top Marginal Tax Rate (MTR) is very low, at 35-36k.

The income tax system is very progressive, one of the most progressive in the world, so that although many low earners pay zero or very little direct tax, at earnings of, say, double the median, the direct taxes here are similar to high tax countries.

the entry point to teh top rate of tax in ireland is low. however the top rate of tax is low.
ireland, top rate of 40% kicks in at 35300
netherland, top rate kicks in at 68,500, however that rate is 52%, the rate of 41% kicks in at 34000
italy, top rate kicks in at 75000, however that rate is 43%, the rate of 41% kicks in at 55000

Eric Cartman

suicide_circus wrote: »

As others have said - i don't care what tax i pay if waste is minimal and the services and infrastructure we get in return are of a good standard.

However, i don't believe that waste is minimal. I don't believe that tax euros are spent efficiently.
I do believe there is significant administrative and middle management bloat. I do believe that unscrupulous practices take place in order to justify budgets.

I have friends and family in various parts of Europe. Some pay more tax than us but boy oh boy do they get it back in spades.

I really don't think i want to be old in Ireland.

the working childless person here gets almost nothing until we retire, doubly for the self employed. I don't believe theres any rational justification for any country in the world to have a tax rate over 49.9% applied to anyone of any income or any asset, so by that metric we're quite near that barbaric point , which is a shame that we have nothing to show for it

sameoldname

Eric Cartman wrote: »

the working childless person here gets almost nothing until we retire, doubly for the self employed. I don't believe theres any rational justification for any country in the world to have a tax rate over 49.9% applied to anyone of any income or any asset, so by that metric we're quite near that barbaric point , which is a shame that we have nothing to show for it

Nothing to show for it? You live in one of the most successful countries on earth by any measure.

Geuze

Stovepipe wrote: »

why do you think they are generous? Eu 203 a week doesn't go far and there is no shortage of pensioners living in poverty.

Poverty rates for people over 65 are not high.

Let us check:

https://www.cso.ie/en/releasesandpublications/ep/p-silc/surveyonincomeandlivingconditionssilc2019/


2.3% of people over 65 are in consistent poverty.

That compares with 5.5% of the whole population.

Geuze

irelandrover wrote: »

the entry point to teh top rate of tax in ireland is low. however the top rate of tax is low.
ireland, top rate of 40% kicks in at 35300
netherland, top rate kicks in at 68,500, however that rate is 52%, the rate of 41% kicks in at 34000
italy, top rate kicks in at 75000, however that rate is 43%, the rate of 41% kicks in at 55000

Ah now, USC is a tax.

So the top rate in Ireland is 44.5% at 36k.

Plus what about the 4% PRSI? That makes it 48.5%

It is not correct to say "the top tax rate is low".

OK, fair enough, our top rate of tax is not high, compared to some other EU countries.

Mongfinder General

Geuze wrote: »

Ah now, USC is a tax.

So the top rate in Ireland is 44.5% at 36k.

Plus what about the 4% PRSI? That makes it 48.5%

It is not correct to say "the top tax rate is low".

OK, fair enough, our top rate of tax is not high, compared to some other EU countries.

The resilience of the Government’s main tax head must be examined. The pandemic put hundreds of thousands of workers out of work for long stretches last year. But the income tax receipts barely fell. Why is this?
I believe we have a massive black economy here. Nixer culture has always been prevalent. Everybody wants a service or product as cheaply as possible. I suspect that there are many self employed people who simply aren’t declaring their true income.
In effect the almost 50% tax/levy rate the rest of us higher tax rate payers pay is subverting those who don’t pay. We’re quick enough to criticise corporations but there are many individuals who don’t pay their “fair share”.

Geuze

Mongfinder General wrote: »

The resilience of the Government’s main tax head must be examined. The pandemic put hundreds of thousands of workers out of work for long stretches last year. But the income tax receipts barely fell. Why is this?

No income tax until 16,500.

Many tens of thousands of students / young people working PT in pubs/cafes/hotels, etc., never pay income tax.


Lay off 100,000 of these workers, no direct impact on income tax receipts.



Also, look at PRSI.

No PRSI under 352 pw, but you do get the PRSI credit.

To be clear, once you earn 38 pw, you are credited with a PRSI contribution, to get benefits.

But your contribution is zero until 352pw.


Example: work every week, earn 300 pw, pay zero tax, pay zero PRSI, get a State Pension, great country!!!!

jcon1913

Tax take in Ireland relative to other countries is here



https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_to_GDP_ratio


The tax take in Ireland is approx 30% according to this list



Ireland compares well to the UK 34%, France 47.9% and Germany 44.5%, Italy 43.5%


I dont know what the OP is on about really.