What Will happen when Generation Rent Retire?

HerrKuehn

https://www.boards.ie/discussion/comment/119129657#Comment_119129657

So, you want the state to provide more in the way of services like susidised housing, but you don't actually want to pay for any of it. Would that about sum it up? I never mentioned anything about carers or unemployed. Low earners in Ireland pay very little if any tax.

riclad

There's retired people, people in school students, people over 65, people under the age of 18, I doubt very much if theres a million adults on welfare paying no tax. At least in dublin 90 per cent of council houses are now owned by the person living there.students going to college pay no tax unless they have a part time job.

theres no two ways about it, we are decades behind in our building of social housing for rent.

part of that is down to selling those houses to begin with

part of it is in the ideology that considers all purpose build social housing areas to be contributors to ghettoisation and has simply put the provision of social housing into direct competition with private purchase

if the govt were to go back to the provision of decent social housing for all types of family unit/age/single who were unable to pay market rate in rent or to save enough or earn enough to get a mortgage to purchase, you wouldnt have the pressure on the one market that we currently see and the social housing applicant/tenant pitted against the working first time buyer or family looking to move up

its an entirely manufactured crisis and the debate around it is always about what we can do this year as a fix, not what did we stop doing that worked in the fifties through to the seventies

Strumms

https://www.boards.ie/discussion/comment/119125266#Comment_119125266

You can’t fix housing for Irish citizens while at the same time inviting hundreds of thousands of people over from xy&z… free money, free healthcare, free housing for them too…..you don’t need a degree in economics to realise that.

Wanderer78

https://www.boards.ie/discussion/comment/119131652#Comment_119131652

we have been gradually moving the need of taxation away from wealth, and more so towards labour and consumption, this approach is now starting to collapse, its simply not possible to keep doing this, as by doing so, will more than likely lead to complete social and economic collapse. the amount of money required to resolve our growing issues simply cannot be resolved by these methods, its mathematically and realistically impossible to do so....

https://www.boards.ie/discussion/comment/119131670#Comment_119131670

once again, you ll find very few citizens pay little or no taxes, as we all pay taxes via consumption!

jo187

https://www.boards.ie/discussion/comment/119131652#Comment_119131652

You said a million people are paying no income tax, so who were you talking about?

Did I say anything about not paying for these services? I pay my taxes unlike Apple.

 Quote Thanks!

Reply

Wanderer78

https://www.boards.ie/discussion/comment/119131742#Comment_119131742

...to be fair to the mnc's, theyre paying it now, but we clearly had to effectively force them to do so!

HerrKuehn

https://www.irishtimes.com/business/personal-finance/why-one-in-three-earners-pays-no-income-tax-1.2841652

Not including unemployed or state pension only recipients. Of course everyone pays VAT on things they buy, but if that is all that they pay, it doesn't go very far to cover housing, health, state pension, schools for kids etc. I found the water charges protests very informative, we will never be a country that is willing to pay to improve services, it is all about what we can get from the state. I paid the water charges, it was to help improve the infrastructure especially in areas where it is very bad (I live in DLR so it has no effect on me).

jo187

That article is from 2016 so the number could be more or less now.

In regards to water tax. If you recall after the bailout we were hit with usc, property tax and then water tax.

It was quite clear this was us paying for the bailout.

If you think the water tax would improve anything you be very naive.

HerrKuehn

https://www.boards.ie/discussion/comment/119132413#Comment_119132413

https://www.irishtimes.com/business/economy/more-than-1-million-workers-will-not-pay-income-tax-this-year-1.3544848

This is 2018, so the trend was definitely continuing. During the bubble FF were always trying to take more people out of the tax net. The bailout was the result of the mismanagement of the economy by the government. They increased spending on salaries based on one off new build housing taxes. They could have brought in LTI rules for mortgages, but it would have been very unpopular. The harsh truth is that the policies that led to our downfall were very popular at the time.

Of course I am familiar with USC, most of my salary is on the higher 7% rate. They should rename it though as it is not universal. Who do you think should be paying for the bailout if not Irish tax payers? Government just takes money from some people and gives to others. Fundamentally the state is just the people living in it and the institutions. I must say, you have a very typical sort of Irish attitude. It reminds me a bit of the people who voted for Homer Simpson as sanitation commissioner.

jo187

https://www.boards.ie/discussion/comment/119132555#Comment_119132555

Well maybe the banks? Should had paid for the bailout, did you hear the Anglo banks tapes?

riclad

I don't think there's 1000s of people coming here just to sign on the dole, many industry's depend on on non nationals, retail. Hotels, cafes, our government depends on paye, taxs from multinationals, vat , all EU countrys are dealing with inflation, high energy prices, supply chain issues. I think from the 70s onwards people expected if they were working full time they could save and buy a house or an apartment or buy as a couple. This is no longer true. After 2006 we had the crash, the rescue of the banks. NAMA. Since then the no of houses being built is not even close to demand. With the bank bailout the brought in strict rules like 3 to 3.5 ratio for mortgages. I don't think the Irish government can do anything about inflation which is based on international factors. I do.nt think bank lending rules are too strict. I don't know how many houses the government could afford to build per year. One problem is the shortage of building workers. The government has to pay for infrastructure services hse Gardai hospitals roads civil servants that make the system work in order to keep the economy going and to attract outside investors, why are company's like Google Facebook here?

Because Ireland has a stable political pro business environment and is a member of the EU and has a good supply of young workers

If you look through history at least from the 60s young people lived at home and saved up a deposit and bought property until sometime after 2010

people on low incomes lived in flats or bedsits or local authority housing

We have had a housing crisis since 2008 with

Rents House prices were gradually going up the government was in favour of this as it reduced negative equity for people who bought before 2007. So we went from one extreme to another it seems whatever the government does it has no effect or else makes the housing situation worse

I'd like to see a program on this on rte a panel of experts economists ask is there any rational solution to the housing crisis given the government has a limit on how it can borrow it can't just raise taxs more than it collects right now

HerrKuehn

https://www.boards.ie/discussion/comment/119132588#Comment_119132588

The government had 2 options: 1) let the banks collapse, cover the deposits up to 100k, then we are left without a banking system. 2) Bail them out by guaranteeing deposits and taking them into state ownership, wiping out shareholders.

They went with option 2, option 1 would also have been costly. I don't know which would have been better, but they both would have cost a lot. In neither case would we have the banks covering the cost of social welfare when we had 16% unemployment or PS salaries. That was where we ran up the most debt. If we don't run the country well, we don't get to have nice things like high quality subsidised housing (like say Vienna).

Bass Reeves

https://www.boards.ie/discussion/comment/119131670#Comment_119131670

Students going to college with s part time job pay no tax. If you only earn 17k you only pay a very small USC payment of about 160 euro

@20k your dedications are approx 1250 euro

@25k they are approx 3150 approx.

It's surprising the amount of people that do not understand this. This article is from 2017 but would be fairly similar to now

https://www.irishtimes.com/business/personal-finance/why-one-in-three-earners-pays-no-income-tax-1.2841652

Not only that but because the system is structured line that it really pays people who are in business to put children on there payroll as early as legally possible

### sorry just saw that article was quoted already

HerrKuehn

https://www.boards.ie/discussion/comment/119133345#Comment_119133345

From the other article I linked:

"Removing people from the tax net has long been a public policy goal. Back in 2010, for example, 45 per cent of income earners paid no income tax. While the introduction of the USC considerably broadened the tax base, its impact on the low paid has been reduced in recent years by raising the level at which the charge kicks in.

This approach differs from international norms. Ireland imposes a far lower tax burden on the lower paid than other countries do. In Germany, for example, figures from the Irish Tax Institute show that a person on a salary of €18,000 will give up more than €4,700 in income tax. In Ireland a person on that income would lose just €510."

Yet, people expect German level services?

Yurt2

https://www.boards.ie/discussion/comment/119133371#Comment_119133371

With exception of Bavaria (and even then I doubt it) the cost of living in Ireland is a deal more expensive than Germany, and that effect is magnified for the lowest income stratas like you're quoiting above.

Fine, you want to drag more people into the tax net like the notional person on 18k and want to hit them for 4k more tax, but to what end? You can't draw blood from a stone. You would in effect be driving them into absolute poverty and food / housing insecurity (even taking into account interventions like HAP) and the money will have to bounce back to them via social transfers in any case.

That would be a fairly boneheaded policy.

HerrKuehn

https://www.boards.ie/discussion/comment/119133505#Comment_119133505

I am merely pointing out that if you want the state to provide more in the way of services, then you need to have people paying more tax. I am not looking for the state to provide more in the way of services like subsidised housing etc. Germany is expensive in terms of housing in most of the major cities, not just in Bavaria, so also Cologne, Frankfurt, Dusseldorf, Hamburg etc. I just think here the expectations are a bit off. The majority of workers in Ireland are paying feck all in income tax as it is mostly shifted on the higher earners. The level of services reflect what people pay for them.

In Germany you also have a state pension that has depends on what you have contributed to it. Long term unemployed move into the Harz IV system after the insurance part ends, this is not a very comfortable living and encourages people to actually get a job.

Bass Reeves

https://www.boards.ie/discussion/comment/119133505#Comment_119133505

There is a second issue with the tax. Most services are available at no cost to those on lower incomes. Whether HAP, income support, college support etc.

For instance graduates starting out in Dublin on incomes of 25-35k do not realise that they are entitled to a level of HAP support.

However l personally am advocating that we get to the German rates if tax on incomes at that level. But a 10% tax rate on income from 10-20k should be considered or else reduce the tax credits.

Yurt2

https://www.boards.ie/discussion/comment/119133618#Comment_119133618

Lookit, taking just Dublin and setting it alongside major German cities, it's more expensive to rent by a good degree. That's a hard fact. And that's just one overhead.

You're floating more taxes for lower income workers in Ireland, and you can't articulate why. Because there is really no case to be made for (in your example) imposing 4k more in taxes from a worker on 18k, pushing them into a worse situation than they are already in, and then the state will inevitably have to double-back and serve them with further transfers.

You're not even making the case for superior services, so what is your point beyond grandstanding?

As for your Hartz IV point. We don't have a greater problem with long term unemployment or headline unemployment in Ireland than in Germany.

Trying to lay any of the structural problems at the door of low income workers or even the unemployed is naiive Thatcherite sausage stuff.

Yurt2

https://www.boards.ie/discussion/comment/119133676#Comment_119133676

Again, I'd have to ask to what end? In effect, you're pushing people in a precarious situation over the edge.

Any further tax you impose on that income strata will inevitably find its way back to them via social transfer in one way or another. So what you're suggesting is entirely symbolic.

There is a wider cost to having people in poverty. You can give them a kicking if you want and if it makes you feel good, but a policy like that helps no one. Not even you, the upstanding, up-early-in-the-morning, holding up the sky worker of Leo Varadkar's dreams.

I can see no rational economic point to (for instance) imposing further taxes on a worker on 18k. A worker on 18k in Ireland or Germany, neither is having a good time, but they're having a worse time in Ireland for a host of reasons.

You won't find me arguing in favour of HAP btw, it's a Frankenstein bonhead policy that's out of control.

Wanderer78

https://www.boards.ie/discussion/comment/119133324#Comment_119133324

bailouts are highly complex, and its still highly debated whether they should have been or not, but i suspect both options would have had sh1t outcomes no matter what, the grave mistake we made was not enforcing strict conditionality along with them. its clearly obvious the financial sector completely fcuked up, and now we have effectively exonerated the whole sector from future fcuk ups, so we re destined for more serious fcuk ups from this sector again!

again, we truly need to get over this inherent fear of running deficits, as its now clearly obvious, running your country primarily on credit, will more than likely lead to a serious crash, along side other serious social and economic problems

there actually is a pubic option available to us in relation to banking, its called public banking, but we re unwilling to accept this also, instead, we keep defaulting back to the alternatives, which are destined to fcuk up again!

by not implementing such things, we re destined to not ever having 'nice things', or things that are critically needed to maintain a functioning society and economy!

https://www.boards.ie/discussion/comment/119133345#Comment_119133345

once again, we cannot maintain this approach of not taxing wealth appropriately, and forcing this requirement more so towards labour and consumption, it ll simply never work!

https://www.boards.ie/discussion/comment/119133618#Comment_119133618

again, most of the workforce is tapped out in relation to taxation, yes there are some small areas that could be addressed, but the money required to resolve our issues simply cannot be pulled from the workforce, it simply just isnt possible, we have got to urgently rectify our overall approach to taxation, primarily in regards wealth

HerrKuehn

https://www.boards.ie/discussion/comment/119133753#Comment_119133753

I am "floating" the idea as you say because if people want the state to provide better services then they will have to pay for them. I am not advocating for it myself as I am not looking to be housed by the state and I don't believe in the states ability to provide a decent health service. I think the issue is that a lot of people seem to think the state should provide a lot and they should pay nothing. That is the issue as far as I am concerned. We already have the most re-distributive tax system in Europe. The 52% rate kicks in at 70k which does not compare favourably with other European countries especially given what you get for it. Ireland is about as far from Thatcherite as you can imagine.

Wanderer78

https://www.boards.ie/discussion/comment/119133848#Comment_119133848

it will be impossible for any government to implement such an approach, i.e. increasing taxes, even though the logic makes sense, it just wouldn't fly with the electorate, and potentially could crash the economy, the debts have to come first, and that means running deficits!

Yurt2

https://www.boards.ie/discussion/comment/119133848#Comment_119133848

This is Thatcherite gobbledegook and I think you know it.

HerrKuehn

https://www.boards.ie/discussion/comment/119133872#Comment_119133872

Keep believing that you can have all sorts provided by the government and not have to pay towards it. If you look at any European country that has decent services, you will see that everyone is contributing towards it. It really isn't complicated to understand. Have everyone contribute and have the state take a long term view investing in social housing over decades rather than pull people out of the tax net. It is always short term here and the electorate reward it. If anything I am advocating here for something more like the social democracies in Europe. What I am not willing to do is foot the bill for it with even higher taxes while we keep those looking for the services out of the income tax net.

moritz1234

https://www.boards.ie/discussion/2058245863/what-will-happen-when-generation-rent-retire

Ask Germany, they mostly rent. The obsession with buying in Ireland is unhealthy

Yurt2

https://www.boards.ie/discussion/comment/119133861#Comment_119133861

The logic doesn't even make sense.

What the poster is really driving at, and this is what Thatcherites ultimately always drive at, is that if you put low income workers on an economic diet, that everything will magically get more productive (despite the fact Ireland has among the most productive workers in the world, yes, even the low income ones) in the economy because you're threatening them with outright poverty and street urchins and the indolent will suddenly start pulling themselves up by the bootstraps - and it will logically flow that somehow this will convince the government they should pay less tax.

It's boneheaded bitter sentiment and finger pointing

Yurt2

https://www.boards.ie/discussion/comment/119133891#Comment_119133891

"All sorts"

You're short on detail and long on pathos Herr.

There is no economic or social arguement to be made for pulling the lowest income into the tax net in the way you describe.

You will generate poverty, increase social dysfunction, and ultimately, transfers will have to flow back towards that working cohort.

It's bonehead land.

EDIT: just noticed the part of your post "you think government should provide for you" etc.

I'm in the higher tax bracket you so bemoan in case you're getting confused.

HerrKuehn

https://www.boards.ie/discussion/comment/119133934#Comment_119133934

Thanks for the insults. So keep doing what we are doing and expect a different outcome I suppose. Maybe we can keep all the good bits like low tax AND have a Finnish education system, Viennese social housing and a Dutch health system. It makes perfect sense!

Wanderer78

https://www.boards.ie/discussion/comment/119133913#Comment_119133913

again, yes i completely agree with you, but you must also understand where such thinking comes from, we re still coming through the thinking of primarily funding our economies via credit, but this has completely failed, another major failure in this thinking is deficits are bad, but this is simply not true. such thinkers and believers, simply believe balancing budgets is the best way to run an economy, but this is simply untrue, but in order to balance budgets, taxes must be increased to do so....