Wealth distribution through property taxation

garhjw

AndrewJRenko wrote: »

There are no sacrifices for inherited money. It is inherited. It gives better-off families an unfair advantage over others, to be able to pay for the education, networking and healthcare that gives them advantages over others.



Don't expect the tax system to subsidise these advantages.

Why is it unfair if some people work a lot harder than other people to earn more money? People choose to do this in order to provide a better life for them and their family. My parents worked very hard all their lives and were very successful. They sacrificed a lot to provide for their family. My siblings and I saw how hard they worked and as a result we all have the same work ethic. Our family is “better off” because of hard work. You don’t seem to understand that.

Obvious Desperate Breakfasts

ml100 wrote: »

No, my money goes to my kids, not yours or anyone elses.

Except if there’s a CGT or CAT liability. Then some of it goes into the tax pot. Yes, I’m stating the obvious here. If your beneficiaries breach the thresholds, they’ll be liable.

Pooinloo

Obvious Desperate Breakfasts wrote: »

Except if there’s a CGT or CAT liability. Then some of it goes into the tax pot. Yes, I’m stating the obvious here. If your beneficiaries breach the thresholds, they’ll be liable.

I like you. You seem the cleverest person in the world.

oceanman

ml100 wrote: »

No, my money goes to my kids, not yours or anyone elses.

but not all of it...like it or lump it.

Voltex

I think Milton Friedman answers this question completely at about 2.15

https://www.youtube.com/watch?v=MRpEV2tmYz4

Mr. Incognito

Mr. Incognito wrote: »

2. CAT is immoral.

Its not. Receiving wealth in excess of 335K and contributing nothing is not how a modern society could function.

It’s absolutely is immoral, 100%.

As for modern society not functioning within it, you should tell that to the many countries who do not apply any inheritance tax and the many more who have far lower rates than in Ireland.

Charles Babbage

garhjw wrote: »

Why is it unfair if some people work a lot harder than other people to earn more money? People choose to do this in order to provide a better life for them and their family. My parents worked very hard all their lives and were very successful. They sacrificed a lot to provide for their family. My siblings and I saw how hard they worked and as a result we all have the same work ethic. Our family is “better off” because of hard work. You don’t seem to understand that.

Many people are not better off because of harder work than other people, but because their ancestors happened to live in an area in demand in the 21st century or because they happened to know someone or be related to someone.

Umaro

garhjw wrote: »

Why is it unfair if some people work a lot harder than other people to earn more money? People choose to do this in order to provide a better life for them and their family. My parents worked very hard all their lives and were very successful. They sacrificed a lot to provide for their family. My siblings and I saw how hard they worked and as a result we all have the same work ethic. Our family is “better off” because of hard work. You don’t seem to understand that.

Quoted the above as an example of this point that keeps popping up in this thread, that "working hard" somehow makes you more deserving of not having to pay taxes.

The taxman doesn't care how hard you or your parents worked, if the wealth is so large that its eligible for CAT then you prospered far more from society than others so you can afford to put more back in.

One of the worst things about this argument is the insinuation that poor people could've had the same wealth, they just didn't work hard and apply themselves. There's plenty of people on the bottom rung of society who are working hard but will never accumulate any substantial wealth.

Not everyone starts life from the same point, that's why we live in a society that tries to redistribute a bit of wealth from the top to those at the bottom.

jrosen

I think people are already paying enough tax, if someone wants more they should work for it.
There are very few people who can actually live off what their parents leave them, those fortunate enough to inherit typically will have to work hard themselves. What small % of people are actually living off an inheritance

garhjw

Umaro wrote: »

Quoted the above as an example of this point that keeps popping up in this thread, that "working hard" somehow makes you more deserving of not having to pay taxes.

The taxman doesn't care how hard you or your parents worked, if the wealth is so large that its eligible for CAT then you prospered far more from society than others so you can afford to put more back in.

One of the worst things about this argument is the insinuation that poor people could've had the same wealth, they just didn't work hard and apply themselves. There's plenty of people on the bottom rung of society who are working hard but will never accumulate any substantial wealth.

Not everyone starts life from the same point, that's why we live in a society that tries to redistribute a bit of wealth from the top to those at the bottom.

I didn’t say there shouldn’t be tax on inheritance. I was making the point that some people choose to work a lot harder than others.

Some of the posts on this thread seem to resent wealth

elperello

oceanman wrote: »

but not all of it...like it or lump it.

Or plan ahead.

oceanman

elperello wrote: »

Or plan ahead.

well that's true.

Saudades

garhjw wrote: »

My siblings and I saw how hard they worked and as a result we all have the same work ethic. Our family is “better off” because of hard work. You don’t seem to understand that.

That's great but just to be clear, being "better off" is more of a consequence of working smart, rather than hard.

Standing up for 10 hours flipping burgers in McDonald's is also hard work, so is bending your spine all day long being a cleaner and making beds in a hotel, and so is working as a caregiver wiping the anus of a 90 year old with dementia.

Everyone thinks they work hard. The so called "better off" are the ones that worked smart by getting themselves educated and opening up better opportunities.

ml100

elperello wrote: »

Or plan ahead.

Exactly, I will do all I can that's legal to make sure it doesn't go to the revenue to be wasted by whatever government is in power at the time, and having successfully done this from my parents I'll make sure my kids get the right advise!

anewme

elperello wrote: »

Or plan ahead.

Yep my lesson from this thread is It’s a considerable amount that warrants specialist advice.

I’m Not one of the people cribbing about professional services.

AndrewJRenko

Saudades wrote: »

That's great but just to be clear, being "better off" is more of a consequence of working smart, rather than hard.

Standing up for 10 hours flipping burgers in McDonald's is also hard work, so is bending your spine all day long being a cleaner and making beds in a hotel, and so is working as a caregiver wiping the anus of a 90 year old with dementia.

Everyone thinks they work hard. The so called "better off" are the ones that worked smart by getting themselves educated and opening up better opportunities.

Or maybe they're better off because they inherited money that allowed them to buy a better house or pay for their masters or PhD or build the right connections at private school or the golf club?

garhjw wrote: »

Why is it unfair if some people work a lot harder than other people to earn more money? People choose to do this in order to provide a better life for them and their family. My parents worked very hard all their lives and were very successful. They sacrificed a lot to provide for their family. My siblings and I saw how hard they worked and as a result we all have the same work ethic. Our family is “better off” because of hard work. You don’t seem to understand that.

No-one works hard to inherit money. You don't seem to understand that.

beauf

AndrewJRenko wrote: »

Or maybe they're better off because they inherited money that allowed them to buy a better house or pay for their masters or PhD or build the right connections at private school or the golf club?

All of those things will have happened long before the best majority inherit anything. Most people will not inherit any life changing amount of money.

AndrewJRenko wrote: »

No-one works hard to inherit money. You don't seem to understand that.

People have won law suits to prove otherwise.

Fionn1952

beauf wrote: »

People have won law suits to prove otherwise.

Not being smart here, but could you link to a law suit where the judgement was that a person had worked hard for their inheritance? It seems strangely specific to me, and certainly I can't see how it would be directly applicable to the vast, vast majority of inheritances in any way I can imagine a judgement like that being presented.

AndrewJRenko

Fionn1952 wrote: »

Not being smart here, but could you link to a law suit where the judgement was that a person had worked hard for their inheritance? It seems strangely specific to me, and certainly I can't see how it would be directly applicable to the vast, vast majority of inheritances in any way I can imagine a judgement like that being presented.

I guess he's referring to cases where people have cared for an elderly relative on a promise of getting the house or farm in the will. These are very exceptional cases, and are nothing to do with CAT in the slightest.

beauf wrote: »

All of those things will have happened long before the best majority inherit anything. Most people will not inherit any life changing amount of money.

Certainly, most people will not inherit enough for CAT to be an issue. But if setting up their children has already happened, that's a good reason for further taxation, as it's just money to be frittered away really.



If the 'investment' in the next generation has already happened, then it's probably going to go the grandchildren, to let them maintain an advantage over their peers.

beauf

Fionn1952 wrote: »

Not being smart here, but could you link to a law suit where the judgement was that a person had worked hard for their inheritance? It seems strangely specific to me, and certainly I can't see how it would be directly applicable to the vast, vast majority of inheritances in any way I can imagine a judgement like that being presented.

You see it often in the media where someone challenges a will because they had an expectation of inheritance of a business or farm, or similar because they worked on it, or invested in it. Often for many years. It was a verbal contract of sorts and as generally understood, and the aggrieved party was encouraged by the the other party in that understanding. Sometimes its along the lines of a proprietary estoppel.

One common is someone works on a farm all their life, but its left to another sibling who never worked on it, due to some falling out or slight.

Bass Reeves

I think it is interesting that some here are linking education achievement with getting money from parents. First off any person going to 3rd level from lower socio-economic groups get access to not just college fees but to decent cost of living grants.

Even if your parents pay for your education you still need to put in the work yourself. Where the issue lies often is that parents from lower socio-economic groups often refuse to engage with the education system.

As well even people with limited education ability but with a good work ethic can advance in society. It when you lack both that you fail. Go to any restaurant bar or McDonalds and 50% of the staff are college students working unsocial hours for 10 euro/hour.
My son has worked 8-10hour days since he finished college exams and has only been off Christmas day and yesterday. And it will be like that until after the new year.

However I have no issue with present inheritance tax rates. I would like if they were a tad lower and think they are at an effective max at present. To put it in context a person can inherit the equivalent of about 10years of an average ndustrial wages after tax under the present system without any inheritance tax.. On a one million inheritance from a parent even if one carried out no avoidance measures they would receive 772K or pay an effective tax rate of about 23%

If property or business assets were.involved the effective rate would be much lower. Remember as well it is the receiptant that pays the tax not the diner so there is little point often in the donor going to a tax haven as the receiptant in Ireland will still have to pay inheritance tax in Ireland

AndrewJRenko

AndrewJRenko wrote: »

Or maybe they're better off because they inherited money that allowed them to buy a better house or pay for their masters or PhD or build the right connections at private school or the golf club?

Nothing wrong with any of the above, the money gives you an advantage but you still need to work hard, be very smart and know what you are doing to take advantage the money has given you. Getting ahead of other people is not the bad thing you make it out to be, life is not fair and if parents can give their children an advantage they deserve that advantage.

AndrewJRenko wrote: »

No-one works hard to inherit money. You don't seem to understand that.

Nonsense to be fair, a lot of people work very very hard for their inheritances.

AndrewJRenko wrote: »

I

If the 'investment' in the next generation has already happened, then it's probably going to go the grandchildren, to let them maintain an advantage over their peers.

You make that sound like a bad thing, giving as many advantages to your children or grand children so they can get ahead of as many other people as possible should be the aim of every parent or grand parent.

garhjw

AndrewJRenko wrote: »

Or maybe they're better off because they inherited money that allowed them to buy a better house or pay for their masters or PhD or build the right connections at private school or the golf club?



No-one works hard to inherit money. You don't seem to understand that.

I work hard and I inherited money from my parents. I learnt the value or working hard from them. Me working hard and being wealthy has nothing to do with what I inherited from my parents. What don’t I understand?

It seems to me like you don’t know what you are talking about

beauf

AndrewJRenko wrote: »

I guess he's referring to cases where people have cared for an elderly relative on a promise of getting the house or farm in the will. These are very exceptional cases, and are nothing to do with CAT in the slightest.

You never mentioned CAT. You said no one works hard for their inheritance.

That video linked to earlier made another point. We live in a family society not an individual society. You keep underestimating ad disparaging the value, the force multiplier of family. I don't just mean financially. Its the dominant arrangement for many aspects of life for many reasons. Its why a team is usually more efficient than an individual.

AndrewJRenko wrote: »

Certainly, most people will not inherit enough for CAT to be an issue. But if setting up their children has already happened, that's a good reason for further taxation, as it's just money to be frittered away really.


If the 'investment' in the next generation has already happened, then it's probably going to go the grandchildren, to let them maintain an advantage over their peers.

You can't have it both ways. You can't say you a person gained advantage if they frittered it away, or it ended up with the grandchildren. This implies that the adults who inherited it didn't need it. They were already established before they inherited. If they don't need it, then it means the grandchildren didn't need it, as their parents already are well enough off before the inheritance, to give the grandchildren an advantage.

I'd guess that families who maintain their wealth through many generations are rarer than those who don't. There are big estates that get passed down through generations. But there are vastly more that don't.

Fionn1952

beauf wrote: »

You see it often in the media where someone challenges a will because they had an expectation of inheritance of a business or farm, or similar because they worked on it, or invested in it. Often for many years. It was a verbal contract of sorts and as generally understood, and the aggrieved party was encouraged by the the other party in that understanding. Sometimes its along the lines of a proprietary estoppel.

One common is someone works on a farm all their life, but its left to another sibling who never worked on it, due to some falling out or slight.

While certainly interesting, I don't see how it's relevant to the concept of taxation on inheritance. Disputing a will isn't an argument that inheritance tax is unfair or unwarranted. Exceptions exist already for principal places of residence etc, so I can't see how a legal case surrounding the ownership of a family farm relates to the actual issue.

The majority of the time, an inheritance is not something that has been worked for, as in the example of a family farm. Even then, I pay tax on what I earn in my work - why should you not pay tax on what you inherit for your work?

hmmm

I'm far from a socialist, but in my view Income tax should be reduced, and CAT increased to pay for it.

The kid from a poor family who gets up early in the morning to flip burgers on minimum wage should not be taxed more than someone receiving an inheritance. It is completely unfair that we penalise working, yet allow large wealth transfers to go untaxed.

beauf

Fionn1952 wrote: »

While certainly interesting, I don't see how it's relevant to the concept of taxation on inheritance. Disputing a will isn't an argument that inheritance tax is unfair or unwarranted. Exceptions exist already for principal places of residence etc, so I can't see how a legal case surrounding the ownership of a family farm relates to the actual issue.

The majority of the time, an inheritance is not something that has been worked for, as in the example of a family farm. Even then, I pay tax on what I earn in my work - why should you not pay tax on what you inherit for your work?

It wasn't an argument that inheritance tax is unfair etc.
It an argument against that inheritance is never worked for. Context.

Inheritance is taxed. The tax free allowance is around about the cost of a family home. The idea being I assume that someone will not be forced to leave their family home or farm if they inherit it on their own, or perhaps to recognize the economic and social value of inheritance and stability.

beauf

hmmm wrote: »

I'm far from a socialist, but in my view Income tax should be reduced, and CAT increased to pay for it.

The kid from a poor family who gets up early in the morning to flip burgers on minimum wage should not be taxed more than someone receiving an inheritance. It is completely unfair that we penalise working, yet allow large wealth transfers to go untaxed.

Someone who flips burgers gets taxed very little. Maybe you'd prefer everyone was taxed equally. Then the rich would pay less income tax, the those flipping bugers would pay more.

beauf

How much is inherited is way over stated. Most people don't inherit anything and most that do don't inherit very much, and most it relatively late in life.

https://www.moneywise.co.uk/news/2018-10-30%E2%80%8C%E2%80%8C/average-inheritance-hits-ps11000-those-aged-55-64-are-most-likely-receive-one

beauf

Of course people always have the option to move to where you think you will be treated best and they have tax regime that you agree with.