Only the little people pay taxes. 25-year-old inherits €10.5 billion tax free.

smash

osarusan wrote: »

You would think that it would be possible to find space between a lad keeping 10.5 billion through clever accounting and the government taking every penny, but no.

You know it's not 10.5bn in cash that he's been handed. It's mostly the value of the shares he's obtained.

Donald Trump

ScumLord wrote: »

But if a person works their whole life, saving money for their family and family is important to them, why shouldn't they be able to pass it on to their offspring? Examples like this lad getting one lump share for himself aren't the norm. There's usually a few kids, dependants, obligations. In many inheritances by the time the state and solicitors have had their fill there's nothing left of the parents life to pass onto their children. The bottom line for me is if someone decides to pass their stuff onto their own children, the people they've already invested a lion's share of their time and wealth into, then that's their business. The state shouldn't make spiteful attempts to acquire someone else's wealth because that person can't defend their position anymore, if the person has paid the taxes on that money I don't see why the state should get a second go at it.

You appear to assume with certainty that tax would have been paid on it?

Suppose I set up my business. It is very successful and makes a lot of money. I pour all the money back into the business, buying premises and other fixed assets that are owned by the business. I take very little cash out of the business. After all the "expenses" the "profit" is very little and so I pay very little tax. After a while, the company has so many assets that it effectively becomes an asset management company.

Now I'm 65 years old and want to retire. I give my company, now worth 10m to my only child.

Or maybe I'm 50 and want to retire with my 10m company. But I don't want to pay the tax on all those realized profits. So I "gift" it tax free to my son. 2 weeks later he gifts it back to me. No tax due? Nice and clean :-)

um7y1h83ge06nx

The general attitude with some in this country around taxes goes a little something like this:

Step 1: Raise taxes for people richer or different to me. Don't matter as long as I'm not caught in the net.

Step 2: Government receives this money and either directly or indirectly gives me a slice.

Step 3: Profit!

Princess Consuela Bananahammock

Penny Kind Vitamin wrote: »

The general attitude with some in this country around taxes goes a little something like this:

Step 1: Raise taxes for people richer or different to me. Don't matter as long as I'm not caught in the net.

Step 2: Government receives this money and either directly or indirectly gives me a slice.

Step 3: Profit!

That's pretty much everyone, irrespective of what wealth-bracket they're in. As I said to you before: read the post in the opneing quote if you don't believe me.

smash

Penny Kind Vitamin wrote: »

Step 2: Government receives this money and either directly or indirectly gives me a slice.

That's funny.

swimming in a sea

Princess Consuela Bananahammock wrote: »

Correct me if I'm wrong, but the total wealth never actually changes. The amount of it in circulation does. You don't obtain wealth, you exchange something for it.

In order for it to generate something, wealth actually has to move and in many cases (not all, admittedly) with the super-rich don't appear to be moving much of it anywhere.

Case in point: Wallmart - billions in profits, but paid their staff the absolute minimum they can, frequently below State minimum wages. Consequently, employees don't spend as much, les tax is earned by the State in the from of sales taxes, while the bulk of these profits remain stagnant, not generating anything for anyone.

Tricke-down only works when something actually trickles down.

I'm no expert on economics, but I think a lot of what you say is correct. A really great functioning economy is when a high percentage of the money in an economy is circulating, the problem is the super rich don't spend in percentage terms much money.
In America there is still great nostalgia for the 50's when money moved around and the buying power of the average salary was way above today's levels, because the difference between the average salary the the CEO salary was fraction of today's difference(I know WWII had a lot to do with it also)

Now you have trillions stuffed in offshore bank accounts or the only thing they invest in is office blocks in Dubai where the prices are kept artificially high.

Kermit.de.frog

Fair play to her. The discrimination against people, particularly in Ireland, just because they have money is vile. It's her money, left to her by her parents. No one elses business.

um7y1h83ge06nx

smash wrote: »

That's funny.

Indeed, there's more than a few politicians in this country playing that card.

ScumLord

smash wrote: »

You know it's not 10.5bn in cash that he's been handed. It's mostly the value of the shares he's obtained.

And of course if he's asked to pay tax on all those things he'll have to start selling parts of it off to pay the tax man. This is where in the real world for normal people family assets are forced to be sold off because a massive bill got generated on the death of a family member. A couple can spend their whole life working to create a family home that they intend to pass on to their children and grandchildren (the home house) but then one of them dies and suddenly all they money they paid out to own this house is null and void and the state wants it to be paid for it again. So they have no option but to sell the house. It's wrong.

Donald Trump wrote: »

You appear to assume with certainty that tax would have been paid on it?

Suppose I set up my business. It is very successful and makes a lot of money. I pour all the money back into the business, buying premises and other fixed assets that are owned by the business. I take very little cash out of the business. After all the "expenses" the "profit" is very little and so I pay very little tax. After a while, the company has so many assets that it effectively becomes an asset management company.

Now I'm 65 years old and want to retire. I give my company, now worth 10m to my only child.

Or maybe I'm 50 and want to retire with my 10m company. But I don't want to pay the tax on all those realized profits. So I "gift" it tax free to my son. 2 weeks later he gifts it back to me. No tax due? Nice and clean :-)

I don't think you can gift that amount of money. This is still a lot of whataboutery. You can probably imagine all sorts of scenarios where someone could take advantage. Business people need to be kept on a leash, but there's a time and a place for that (when they're making the money) and scavenging the corpse after their dead is not a fair way of going about it.

Permabear

This post has been deleted.

Geuze

Princess Consuela Bananahammock wrote: »

Correct me if I'm wrong, but the total wealth never actually changes. The amount of it in circulation does. You don't obtain wealth, you exchange something for it.

You are wrong.

Wealth can rise or fall, either due to valuation effects or savings.

Example: I save 10k pa, so my wealth rises by 10k pa.

Or, my house appreciates, so my wealth rises.

Wealth data for Ireland is here:


https://www.centralbank.ie/publications/Documents/The%20Financial%20Position%20of%20Irish%20Households.pdf

Geuze

http://www.centralbank.ie/polstats/stats/summarychart/documents/ie_financial_statistics_summary_chart_pack.pdf

See chart 7 for household wealth in Ireland.

Net wealth is about 600 bn.

Donald Trump

ScumLord wrote: »

I don't think you can gift that amount of money. This is still a lot of whataboutery. You can probably imagine all sorts of scenarios where someone could take advantage. Business people need to be kept on a leash, but there's a time and a place for that (when they're making the money) and scavenging the corpse after their dead is not a fair way of going about it.

I was quoting your post which didn't appear to put any limits on what you thought could be gifted/inherited.

And yes, if I can imagine a a scenario where someone can take advantage, then you can be sure that the person with the money, and good advisors, will think of it and structure it that way too.

I used 10m as an example, as although it is a lot of money, it's not astronomical and everyone probably knows one or two people those sort of assets. Whether it be the man who own the local shopping center or a few shops or maybe a couple of pubs and some apartments.

Geuze

Princess Consuela Bananahammock wrote: »

In order for it to generate something, wealth actually has to move and in many cases (not all, admittedly) with the super-rich don't appear to be moving much of it anywhere.

Much of the wealth in Ireland consists of houses.

Houses don't move, but they do generate "something", known as income.

The income is either rental income to landlords, or imputed rental income to owner-occupiers.

Geuze

Donald Trump wrote: »

Suppose I set up my business. It is very successful and makes a lot of money. I pour all the money back into the business, buying premises and other fixed assets that are owned by the business. I take very little cash out of the business. After all the "expenses" the "profit" is very little and so I pay very little tax. After a while, the company has so many assets that it effectively becomes an asset management company.

The problem here is that purchasing assets does not reduce the profits of a business.

If a business decides to use 1m in cash to buy an asset, that 1m is not allowed as a deduction against gross income.

That 1m does not reduce profits.

This is JC or LC accounting.

BorneTobyWilde

Yep
No one should pay inheritance tax
They should pay tax while alive of course
But not when they're dead
Family should keep what they worked hard for

smash

Geuze wrote: »

Much of the wealth in Ireland consists of houses.

Houses don't move, but they do generate "something", known as income.

The income is either rental income to landlords, or imputed rental income to owner-occupiers.

For an owner-occupiers who does not rent any of the property, they generate nothing and are only an asset if your mortgage is less than what the house is worth. Given the state of the housing market after the bubble burst, for most people who bought in the last 10-12 years a house can't really be considered a part of their wealth.

Princess Consuela Bananahammock

Geuze wrote: »

Much of the wealth in Ireland consists of houses.

Houses don't move, but they do generate "something", known as income.

The income is either rental income to landlords, or imputed rental income to owner-occupiers.

That's what I mean. But if the income never gets spent, it stagnates and des nothing.

steddyeddy

Balance is often missing from these debates. If someone inherits nine billion and people want to tax him they're not necessarily talking about people inheriting their mother's house. There's a huge gap in-between 9 billion and your parental house.

So I think you pay what you can. Everyone has to pay taxes and some of the uses of taxes are more visible than others. I'm not against paying tax in principle and I think those with more should pay more. I much prefer to pay tax on something that's gifted to me than money I actually earn.

jmayo

Je_suis_Jean wrote: »

I don't understand why someone who accumulates wealth, be it property or business interests, and pays income and all other taxes due during their ownership should then have the fruits of their labour pillaged just because they die and pass what they have accumulated onto their family.

If we make wealth creation a punitive exercise and demotivate people from starting businesses etc who's going to create the jobs we need to provide incomes for those who want to work?

Your whole premise is a crock of ...

Daddy inherited most of it in 1979.
Daddy didn't have to bust his nuts accumulating all of this as it has been passed down through the generations.
So please stop trying to compare this to some guy who built a business from nothing and then his family doesn't get the fruits of his long hard work.

Via Grosvenor Estates, the business he inherited along with the dukedom in 1979, the Duke was the richest property developer in the United Kingdom and one of the country's largest landowners, with property in Edinburgh, Liverpool, Oxford, Cambridge, Southampton and Cheshire, including the family's country seat of Eaton Hall, as well as 300 acres (0.47 sq mi) of Mayfair and Belgravia in Central London.[2] The business also has interests in other parts of Europe. According to the Sunday Times Rich List 2016, the Duke was worth £9.35 billion (c. US$13 billion), placing him sixth in the list and making him the third-richest British citizen.

Chromosphere wrote: »

This is actually far more extreme than just your typical inheritance. It's pretty much what remains of the feudal system. All of those lands were inherited and passed down a long line of aristocrats' families for centuries.

Basically what you're looking at is the British class system in action and it's one of the reasons I am very glad we left the UK. For all the outward appearances of a modern society, the UK is still almost feudal when it comes to how land is owned.

This kind of thing is nothing to do with accumulation of wealth from business or from enterprise, it's just pure privilege based on family lines and a formalised, legally protected class system.

Exactly.
Most of the huge estates are now set up as trusts so that they don't have to be broken up to pay taxes when passed onto the next generation.
Much like the little people have to do.
It is one thing protecting a farm estate and a country pile that is often falling down, this is protecting a massive property empire. :rolleyes:
Actually I can see this one instance changing things down the road.

Donald Trump

Donald Trump wrote: »

And yes, if I can imagine a a scenario where someone can take advantage, then you can be sure that the person with the money, and good advisors, will think of it and structure it that way too.

Getting tax advise is not reserved for the "super rich" (whatever that is defined as). Plenty of normal everyday people get tax advise on how to structure their affairs to mimimise tax. 1000 euro will get a good bit of work done by a tax adviser for example and will probably save multiples of that in tax.

Even something as simple as knowing about the 3k small gift exemption per year makes a big difference, and most people don't know or don't understand it correctly. As a simple example a persons parents can gift 12k per year tax free to their child and their childs partner/gf/wife without it being taxed or using any life time threasholds.

jmayo wrote: »

Your whole premise is a crock of ...

Daddy inherited most of it in 1979.
Daddy didn't have to bust his nuts accumulating all of this as it has been passed down through the generations.
So please stop trying to compare this to some guy who built a business from nothing and then his family doesn't get the fruits of his long hard work.

So what, why shouldn't every generation of the family keep benefiting to the max from the family's wealth? It sure as hell more entitled to it than outsiders or the government.

steddyeddy

I think who's taxed is important but more important is what a country spends its tax on. Is a large tax take in Ireland justified? I don't think our infrastructure, education and health service indicates we're getting the best deal. Everyone, rich and poor should be concerned about what they're paying for.

ScumLord

Donald Trump wrote: »

I was quoting your post which didn't appear to put any limits on what you thought could be gifted/inherited.

I'm not saying there should be no limits. But they can't view an estate as one lump sum of money and ask for a chunk of it. A house that's been bought and paid for and is being used by the family should be exempt unless it's being used as a business, and even then they should be very careful that the act of collecting any amount of tax doesn't put the family business under. The whole thing should be streamlined so the solicitors can't work at their own pace eating up what the state don't take.

And yes, if I can imagine a a scenario where someone can take advantage, then you can be sure that the person with the money, and good advisors, will think of it and structure it that way too.

There's probably no way of stopping those people though. They tend to break other laws and get caught. They will always try to find ways of circumventing the rules. We can't break everybody's legs to stop them running away.

talking_walnut

FA Hayek wrote: »

That language is popular now. The AAA/PBP rhetoric is catching on, as if people with money actually have it in holes in the ground. Wealth is kept as assets which by their virtue works its way around the economy.

It is the basis of everyday life, part of the food you eat (farm land), the car you drive (automotive shares), the house you live in (mortgages backed by deposits), the job you work in (started by venture capitalists), the plane you holiday in (fuelled by oil, a commodity) to teacher that teaches your kid (paid for by the bond market)

See, all this requires some semblance of thought, critical analysis and effort but its much easier to go all Trump on this and look for populist nonsense solutions that even your pet hamster would dismiss. We are living in the age of populism and posts like above prove it.

That sounds like "trickle-down" economics you're describing (a system Trump is in favour of by the way). That only seems to increase the wage gap, not decrease. There's loads of articles out there about it but this one seems like a nice quick breakdown.

I'm not AAAer (not even close) but trickle-down economics is the biggest con the US were ever sold. Propagated by the myth that if you work hard enough, you too will be rich.

Deleted User

No

Deleted User wrote: »

If you "benefit directly", well then the conclusion is either you are a property rich voter in South East Dublin...or your summary is nonsense. I'd go with the latter.

I said "will benefit directly"; we are talking about a recent Fine Gael change in the law to benefit people inheriting from 2016 on. Need to brush up on the comprehension there.

Deleted User wrote: »

I think few rich property owners whooped because their €225,000 portfolio would not attract inheritance tax. Do you actually think it was a move designed to benefit the rich in green and leafy Dublin, or would you not admit that it benefits far more, and far more "ordinary" situations, than that?

You read it wrong: it was raised in October 2015 from €225k to €280k. And yes it very, very much was designed to benefit people in south-east Dublin and other wealthy areas more than anywhere else. If, for instance, somebody has four children and leaves them a house worth €1.2 million (of which there are very, very many such houses in Dublin) these four children have collectively been given an extra €220,000 in assets tax free by this change in the law by Fine Gael. This increase will not affect as many people outside Dublin for the simple reason that houses are nowhere near as expensive.

So, yes, like the Fine Gael support for the €100 million subsidy for fee-charging schools, this is assuredly the Blueshirts looking after their own crowd by redirecting public wealth (this change is expected to cost the exchequer €33 million in 2016) towards them a few months before an election. You'd have to be desperately naïve to deny this.

As for this misguided nonsense that "ordinary" people are benefiting; before the legislation in the above example, the "ordinary" family with four children could be left an estate of €900,000 (€225k each) tax free. How many "ordinary" families have that much wealth across Ireland? Since this change, in the above example of four children "ordinary" families with an estate of €1.22 million will inherit tax free.

No

All the supporters of rewarding people for not working/inheriting tax free while hard-working people have their income taxed, will evidently be pleased to know that it is Fine Gael's intention "within the next three to five years" to increase the tax-free limit up to €500,000 per recipient. So in the above example, an "ordinary" family of four children who are left an estate of €2,000,000 will be able to have the entire thing tax free. I can understand somebody who would benefit from this supporting it; it's the people who will never benefit from it - the vast majority of people here - that are definitely strange defending it.

Fine Gael aims for €500,000 tax-free threshold for inheritance

Anyway, back to giving out about (less wealthy) people "living off the state"...

smash

Deleted User wrote: »

All the supporters of rewarding people for not working/inheriting tax free while hard-working people have their income taxed, will evidently be pleased to know that it is Fine Gael's intention "within the next three to five years" to increase the tax-free limit up to €500,000 per recipient. So in the above example, an "ordinary" family of four children who are left an estate of €2,000,000 will be able to have the entire thing tax free.

Quit your hard-working people bullshít.

A single child of parents with a house with €500,000 wont have to pay tax either. So what's your point?

steddyeddy

No

steddyeddy wrote: »

I think who's taxed is important but more important is what a country spends its tax on. Is a large tax take in Ireland justified? I don't think our infrastructure, education and health service indicates we're getting the best deal. Everyone, rich and poor should be concerned about what they're paying for.

And on this very point, there's an uncomfortable article in The Irish Times about how much people are actually really paying for their private (and even state) pension - and the answer is they really aren't paying much at all even though they might like to contend they'd "paid for their pension". The author points out the obvious: the massive subsidy from the taxpayer to fund private pensions. Having just received a nice cheque for 40% of my latest AVC contribution, I can't say I disagree with it. The rest of the population is in effect subsidising people who have private pensions and this is a central reason why the whole system is unsustainable.

The Irish Times: Two myths about our unfair pensions system

Discussion about pensions on Today with Seán O'Rourke this morning

smash

No

smash wrote: »

Quit your hard-working people bullshít.

A single child of parents with a house with €500,000 wont have to pay tax either. So what's your point?

So, it's "bullshít" to point out that a person who earns €280k from his work has to pay (a lot of) tax on it, while a person who inherits €280k by doing no work at all - like your single child example - pays no tax? Most people would say that's actually an unfair system for the state to subsidise/maintain. If the state is going to give tax breaks they should be given to small businesses, people who are producing something for the economy.

smash

[Deleted User] wrote: »

So, it's "bullshít" to point out that a person who earns €280k from his work has to pay (a lot of) tax on it, while a person who inherits €280k by doing no work at all - like your single child example - pays no tax? Most people would say that's actually an unfair system for the state to subsidise/maintain. If the state is going to give tax breaks they should be given to small businesses, people who are producing something for the economy.

Most people earning €280,000 will be happy with this as it means that their children will benefit from their hard work.