Property and inheritance taxes should be raised, says State’s commission on tax and welfare

Economics101

Interesting the drip, drip of news in the past few weeks about the Commission's likely proposals for greater taxes on property and inheritance etc. It makes the Commission look politically naive. I presume the Commission will have other proposals which might lessen the pain of those already mentioned. If not, then the Commission is indeed naive.

Commission membership seems to be weighted more towards interest groups rather than economic or financial expertise IMHO. Did they have to chose a professor of Law from the UK as chair? Not likely to have the political nous required to produce a report which will have any chance of being implemented

So far, if it were a political manifesto, it would be the longest suicide note in Irish political history.

fliball123

https://www.boards.ie/discussion/comment/119608595#Comment_119608595

Its the person giving the inheritance that has earned it, why should there be any more tax paid on it? Why should there be any increase in tax when its wasted. No more taxes there is a lot of fat that needs to be trimmed in both what we pay in welfare and public sector pay and pensions. The idea of upping a tax so it can go into the black hole that is our government spending is Ludacris

MrMusician18

https://www.boards.ie/discussion/comment/119608617#Comment_119608617

The reason inheritance is taxed, aside from raising revenue, is that it prevents the concentration of property and the creation of landed class.

That said, I'm in completely two minds about it and indeed intergenerational gifts. There was an article in the IT yesterday about a couple who wanted to let one of their children live in one of their investment properties for free and the tax implications that might surround that. Turns out that letting the adult child live there would diminish her tax free inheritance, though I was a bit puzzled as how revenue might ever know of an arrangement where cash doesn't change hands.

The way middle income people are taxed here is nothing short of disgraceful.

Podge_irl

https://www.boards.ie/discussion/comment/119608617#Comment_119608617

Whether it is "wasted" or not is a different argument - and if you believe it is wasted why focus on inheritance tax instead of any other one?

The person giving the inheritance is dead, so they are not paying any extra tax. You are paying nothing until after €335,000 and after that its 33% (assuming we are talking about inheritance from a parent here, as seems to be the most common example). That's a lot of money before the taxman comes to even look at his share - and it is now predominantly going towards those in their 50s and 60s who are already disproportionately wealthy.

fliball123

https://www.boards.ie/discussion/comment/119608662#Comment_119608662

I understand the reasoning this thread is about upping the tax and IMO no tax should be upped until our spend side is gutted for all the fat that is in it.

Podge_irl

https://www.boards.ie/discussion/comment/119608662#Comment_119608662

They probably won't know. Living there for a certain period also brings tax advantages on inheritance so its a mixed thing.

Ireland is, in general, not a high tax country but the tax rates are indeed poorly distributed and if there is a desire to reduce taxation it should be on middle earning individuals.

fliball123

https://www.boards.ie/discussion/comment/119608669#Comment_119608669

No its not a different argument. There is too much waste and asking anyone to pay any more in any guise weather its income tax or inheritance tax is wrong. There needs to be some manners put on the government spend they think its phucking monopoly money so its a totally valid argument. Also why should the state feel its entitled to some dead guy/girls hard earned money after working a lifetime to earn it and then if they wish to leave it to their children or whoever the like. The state already got their whack of tax while it was being earned.

MrMusician18

https://www.boards.ie/discussion/comment/119606434#Comment_119606434

Sorry Conor, can't agree with that. No man or family is an island and a family's economic advancement is heavily dependent on the conditions the State creates to allow for it. All the hard work people put in would be for naught of the prevailing conditions were not favourable for wealth creation. The State provides the peace, the education and the infrastructure necessary for all wealth.

Given that the state is a mere three generations away from being a serf or peasant nation reveals the lie that poor people cannot build wealth.

The value in most people's inheritance these days is completely tied to property, and property values are tied to scarcity as well as infrastructure quality - both of which are determined by policy. If someone's house jumps in value because the state opens a rail station nearby, why shouldn't the state get some of that increases in value?

fliball123

https://www.boards.ie/discussion/comment/119608763#Comment_119608763

Because they will have already gotten tax (a life time of tax from this person) from the person giving the money as an inheritance. Remember that train station is built partially because of the tax taken in from people like this. Its a double tax no matter what way you look at it.

PommieBast

https://www.boards.ie/discussion/2058261138/property-and-inheritance-taxes-should-be-raised-says-state-s-commission-on-tax-and-welfare

The gift/inheritance allowances were squeezed as part of the interventions of the Trioka days, so this has to be seen in the context of also having payroll taxation "temporarily" jacked up as a result of the crash. Once again those who are worth something but cannot afford financial trickery are the ones being hit.

cnocbui

https://www.boards.ie/discussion/comment/119608595#Comment_119608595

My children will have had to have put up with me for their entire lifetimes - some might say they have earned every penny. ;-)

0ph0rce0

Given the state of the kip with housing, could they not bring in some sort of deal where parents, grandparents, maybe stretch it to uncles and aunts (seems to happen a lot in the rural counties) can gift their house in their wills or a small plot of land or a side garden to build tax free on condition it becomes the persons permanent residence. Any selling off within so many years, we'll say 10 or 15 years then you'd be due gift tax on the initial inheritance/gift and then CGT on the sale.

Annasopra

https://www.boards.ie/discussion/comment/119548824#Comment_119548824

Yrs but then if your parents dies at year 10 and leave an estate you would pay tax on the entire estate because your exemption has been used.

MrMusician18

https://www.boards.ie/discussion/comment/119608876#Comment_119608876

That's not the case. Say the state decides to build a rail line to Terenure and the funding for this comes from taxation. The person in Cork earning 60k will contribute as much as the person earning 60k in Terenure, but one will see far more benefit. The person benefitting most however is the homeowner in Terenure. They could see a 20-30% uplift in the value of their property, no matter what they've contributed in their lifetime.

It is only fair that the State gets to recoup some of the value we all have created for this person.

AndrewJRenko

Just curious, do all those people who object to paying inheritance tax out of previously taxed income also object to paying VAT on every shop purchase?

https://www.boards.ie/discussion/comment/119606450#Comment_119606450

Compare the costs of accommodation, food, transport in the Isle of Man.

https://www.boards.ie/discussion/comment/119606497#Comment_119606497

Why would you expect the levy to cover the costs of the pension? The levy was imposed retrospectively on people who had an existing contract of employment, including salary and pension conditions. No other employer could legally impose a cut like this, but government has done - and still no sign of the cut being restored.

You don't get to punish public sector staff who signed up to a particular contract.

Quitelife

https://www.boards.ie/discussion/comment/119609629#Comment_119609629

Many private employers closed their DB scheme after the crash in 2008 and their staff could do nothing about it .

public sector workers are one of the few left with a DB pension for a modest 5 % a month contribution. public sector workers don’t know how good their pensions are

Geuze

PS pension conts are 6.5% plus 10% ASC on any income over 34k.

conorhal

https://www.boards.ie/discussion/comment/119609420#Comment_119609420

Have you heard of local property taxes? An already value based tax on properties that supposedly pays for local infrastructure? Just how many times does government get to squeeze the same coin before people tell them to cut their cloth to match their measure first?

No grand infrastructure project increased the value of my folks home to an unaffordable fantasy for most, just the incompetence of our government policy, that's the reality. If you actually saw an ounce of value out of what gets forked over people might be less resentful.

https://www.boards.ie/discussion/comment/119608662#Comment_119608662

If the government is concerned about the concentration of too much land in the hands of a wealthy elite the government should be equally concerned about the REITS crowd, or before NAMA came along, that the largest land owner in the state was sheikh Muhammad al Maktoum. They seem to have no issue with the wealthy hoovering up vast tracts of land, as long as they are foreign landlords.

There is no ideological basis for this proposal, it's just the government spending like drunken sailors and looking to ensure that the gravy boat is topped up.

screamer

I don’t know how this can be seen as anything other than a grab. Why bother to work for anything in Ireland? I know they’ve put in generous schemes to ensure young farmers pay little to no inheritance on the family farm, which can be worth millions, but tax the ordinary persons family home out of existence? Just ridiculous again, middle Ireland get screwed.

https://www.boards.ie/discussion/comment/119552415#Comment_119552415

Nothing stopping you having loads of sprogs.

https://www.boards.ie/discussion/comment/119554497#Comment_119554497

The previous system saw the children pay north of €1200 A WEEK for nursing home care. Seems like a fair deal in comparison.

https://www.boards.ie/discussion/comment/119555018#Comment_119555018

And what makes you think Apple, and others like them, wouldn't go elsewhere, if they think they could be hit with a tax bill in the billions?

BrianD3

https://www.boards.ie/discussion/comment/119610747#Comment_119610747

The main advantage of the Fair Deal is that the family home doesn't need to be sold to pay for care as the patient's contribution related to their home can be deferred until after death. The State still gets its cut.

Previously, there was widespread cute hoorism and corruption around who was admitted to public nursing homes and a shambolic means tested subvention system for those who had to go to private NHs. The means test included the family home and there was no deferral system. You wouldn't get subvention if you had assets and you wouldn't be able to sell your house if you didn't have the mental capacity to do so. Then the family were into things like Ward of Court applications etc.

While the old system was terrible, the new one also hammers those with assets and income, those who have done the responsible thing and saved for their old age while being far from extravagantly wealthy

House worth 500k? That'll be 720 quid per week.

100k in savings? Another 144 per week

Pension of 30k p.a.? Another 461 per week

Etc.

fliball123

https://www.boards.ie/discussion/comment/119609420#Comment_119609420

So you think we should all be living in the same shape, size and type of house and maybe they should all be stacked on top of each other as that is the only fair way for someone not to have their property price go up in value over another?? Your talking absolute b0ll0x the person in Cork will get use the infrastructure that is built in Cork and if they ever need it they can avail of the rail line in Terenure, the person in Terenure will probably not use the infrastructure in Cork in any meaningful way but its there if they need it. Both areas will have infrastructure built from the pot of money paid in by and used by both persons (the person in Terenure and Cork). The state cannot function with tax. The idea that because the state made a decision to build something like a rail line because it would greatly benefit a large cohort of people then people should pay more tax for it, really its never worked like this ever and then you have to deal with other unforeseen benefits such as people driving through the area will see less traffic so do we up motor tax on all of those drivers driving past the train line as well? Ye know just for fairness as they are benefitting from being in less traffic and using less petrol? Also what if the government build something that brings your property price down ?? How is the person compensated??

If we are going down the road you want lets start with our spend side and things like the public sector paying the full cost of their pensions ye know they get the benefit so they should pay the full cost. All the ladies who have the state being their baby daddy cut off and get the actually daddy to step up and pay. What about people renting who think they can stay there for 4 years without paying get them out. Or people who are living in "the family home" for 10 years without paying lets start with that. I said it before and I will say it again there are a lot of sh1te our taxes pay for that should be looked at and cut before any other tax is upped or new taxes introduced. We pay more than enough

The state will have had a lifetime of taxes paid by this individual and their partner and then their kids will also be paying so they already got their pound of flesh and will be getting more from the kids. I mean you only have to look at the taxes (USC, PRSI, Income tax, Property tax, stamp duty, VAT, Carbon tax, Car tax to name but a few its very rare for any individual to live a day and not pay tax in some guise). Your view is the true nature of this country, we have gone so far left its unreal. At what point can someone get on in life, work hard be someway successful (paying a life time of taxes and doing things the right way) and trying to leave something behind for their kids and people like you feel ah its open season on that pot of money. Its a disgrace

MrMusician18

https://www.boards.ie/discussion/comment/119610657#Comment_119610657

You are aware that you don't work for an inheritance, it's a gift. You also know there are no pockets in a habit.

fliball123

https://www.boards.ie/discussion/comment/119611293#Comment_119611293

You are aware that the person giving the gift has worked very hard for it and paid a lifetime of taxes in order to build that after tax money up. The money that is being inherited has already been cut down in size due to the taxes paid.

MrMusician18

https://www.boards.ie/discussion/comment/119611310#Comment_119611310

No, the person giving the gift is dead. It will not make any material differences to their existence who pays what taxes after their death.

The problem we have here is twofold, some people see it as their right to have the assets of their parents, that what others earned is theirs. This is obviously not true. Unless you married the deceased, you have no right to an inheritance. The other problem is broader, that in the absence of an inheritance windfall, people will not be able to afford the same lifestyle of their parents, something which they were led to expect they would have. Inheritance is not a solution to the latter, but requires broad reform of the property market - the kind of thing that rather ironically would be fought by the people they would inherit from.

amacca

https://www.boards.ie/discussion/comment/119611484#Comment_119611484

You ain't living in the real world I'm afraid.

If you got to follow your ideas to their logical conclusion I could see a civil war occurring tbh

MrMusician18

https://www.boards.ie/discussion/comment/119611766#Comment_119611766

A civil war fought with what? Over making houses more affordable? Don't be ridiculous.

So on the one hand you have people complaining that housing is unaffordable, yet will oppose ways of making it less expensive? Oppose development and intensification in their neighbourhood. It's the same attitude with inheritance,"what I have, I hold and I keep for ourselves. I'll tell the lie and believe I built this all by myself".

It's an inconvenient truth that inheritance and the taxes charged keep property circulating. It prevents a landed class from forming.

conorhal

https://www.boards.ie/discussion/comment/119611766#Comment_119611766

This is where we are as a society, the very concept of 'family' and the concept of 'home' have been devalued so much that the prevailing view of your children is that they are 'just another PPS number' no different to any other, so why should one PPS number (you) be entitled to transfer wealth to another PPS number instead of all the PPS numbers. It's a sociopaths view of society.

I remember warning about this shift during the boom years when people were encouraged to stop viewing their 'home' in the traditional manner and your home became 'your asset', something to be monetized, leveraged against and taxed into oblivion. Now there is no family, there is no home there is no community there are only monetizable assets to be exploited.