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

bluedex

Plus increased excise on fuel among other things.

Apologies if this is covered elsewhere

Cookie_Monster

For what purpose, to piss more away on the welfare state? At what point do we say enough is enough?

Dyr

https://www.boards.ie/discussion/comment/119546274#Comment_119546274

Someones gotta stump up the cash for those asylum chancers forever homes.

bluedex

https://www.boards.ie/discussion/comment/119546274#Comment_119546274

I think that's exactly what will happen. It's also meant to cover our transition to "green" energy, make what you will of that...

Fr Tod Umptious

https://www.boards.ie/discussion/comment/119546644#Comment_119546644

No to mention the free cars they get.

Jizique

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

Just madness, top rate of tax kicking in at 35k and they come up with crap like this; there will be zero point in owning a house - zero point buying a house, paying interest plus capital over 30 years to end up with it being taxed when you die; it works if you assume ever increasing house values but this is unrealistic from here given how stretched they are relative to average incomes; key workers forced to live ever further away from work places so tax them on getting to work - hard to know where to start with this madness

Allinall

https://www.boards.ie/discussion/comment/119546705#Comment_119546705

Just to be clear.

The property isn't being taxed when you die. The person receiving it is.

Big difference.

Geuze

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

I am 100% for higher fuel excise / carbon taxes and property taxes, on the condition that taxes on working are reduced.

After 37k approx, a marginal tax rate (MTR) of 48.5% kicks in.

In my opinion, somebody on below median earnings should face maybe 30% MTR.

The top MTR should start at maybe double average earnings, say 100k.

bluedex

https://www.boards.ie/discussion/comment/119546717#Comment_119546717

Yes, but they suggest increasing the annual property tax too. So you pay higher tax that is not based on your income or ability to pay, plus the person receiving it also pays higher tax.

I presume this "commission" is just focused on possible ways to increase the tax take and is completely disregards societal issues.

JPCN1

https://www.boards.ie/discussion/comment/119546274#Comment_119546274

If FG sign up for any of this then they are finished as a party, which they may well be anyway. They have become addicted to spending and lack a leader with courage or conviction. Good man for a hollow sound bite though.

neris

Basically stiffing the middle income PAYE worker again.

Allinall

https://www.boards.ie/discussion/comment/119547281#Comment_119547281

How did you manage to conflate property and inheritance taxes with middle income PAYE workers?

They’ve no specific links.

You might as well say they’re stiffing women again, or brown haired people.

Ubbquittious

Property tax should be abolished. There would be no need for it if the cost of servicing our national debt wasn't so high and the only reason it is high is due to the incompetence of successive governments.

It's such bollix, you are there for 20-30 years paying off a house and when it's finally done you're still merely renting it off the government.

I really wonder what went through the politicians heads when they were bringing it in. I can imagine the politicians in 2012/13 all sitting around a table with a glass of wine in front of them gleefully hatching their scheme

"Ahh we're stuffed lads, we have no money, what do we do?"

"D'ya see all those ordinary folk living in their fancy houses? well we'll just make them pay every year to hold on to them"

"But what if they have no money themselves?"

"Never mind that, they'll find the money from somewhere, feck em. Make them pay anyway"

"Great plan! Let's do that"

https://www.boards.ie/discussion/comment/119547316#Comment_119547316

The "incompetence of successive governments" to which you refer goes all the way back to the FF/Jack Lynch government which won the 1977 General Election by promising to abolish rates on private houses and car tax among other goodies. If we still had rates then there wouldn't be any need for property tax, water charges, refuse charges or any of the other measures that have been tried in the last 40+ years in a vain attempt to recover that lost revenue source.

Ubbquittious

https://www.boards.ie/discussion/comment/119547370#Comment_119547370

If we still had property tax by another name there would be no need to bring in an additional tax to do the same thing? LOL

There would be no need for the additional revenue if they were just a bit more careful with their spending. If they didnt bother bailing out private banks to the extent they did for example or building a massive motorway network while at the same time telling people to stop using cars because they're bad for the environment

Floppybits

https://www.boards.ie/discussion/comment/119546717#Comment_119546717

But why the inheritance tax in the first place? Punishing people for being left something by a dead relative or friend. If anything inheritance tax should be reduced not increased.

Geuze

https://www.boards.ie/discussion/comment/119547316#Comment_119547316

For at least 100 years we have known that property taxes are the best taxes.

We need more property taxes, not less.

We need less tax on workers. It is crazy that workers face 48.5% MTR on 37k+.

Practically every country in the world has property taxes. Why? Because we have known for decades that they are the best taxes.

That's why they are so common.

Geuze

Have a read of Mirrlees on optimal taxation:

https://ifs.org.uk/books/tax-design

See chapter 16 on property taxes:

https://ifs.org.uk/sites/default/files/2022-08/16.%20The%20taxation%20of%20land%20and%20property.pdf

conorhal

Food. water. Shelter.

The very basics of living should not be subject to tax. It's rediculous that inheritance tax here is already among the highest in the world and they want to raise it further. It's especially bad given the crazy cost of property lately. If I were to inherit my folks place it would cost more in tax then the purchace price of my own home 20yrs ago and an unimaginable multiplier of the cost they paid for it in the late 60's.

Personally I don't think any inheritance tax should have to be paid on a family home. I suspect inheriting a property will be the only way many younger generations will ever manage to put a roof over their head and now the government want to make even that impossible.

Allinall

https://www.boards.ie/discussion/comment/119547416#Comment_119547416

How is it punishing people?

Unless you think income tax and VAT are also punishing people?

Its a tax on unearned income, same as all others.

Geuze

https://www.boards.ie/discussion/comment/119547316#Comment_119547316

Civil servants don't think like you suggest (which seems to be a joke)

They analyse decades of economic and tax theories.

I suggest you read the first three pages of chapter 16 of the Mirrlees report on optimal taxation

https://ifs.org.uk/sites/default/files/2022-08/16.%20The%20taxation%20of%20land%20and%20property.pdf

If you are designing an optimal tax system, you should have property taxes in there.

magicbastarder

https://www.boards.ie/discussion/comment/119547416#Comment_119547416

punishing them? if your father leaves you €300k in his will, you currently pay no tax on that.

if they leave 500k, the tax payable is 55k. it's hardly punishment.

one of the benefits of an inheritance tax is to prevent the creation of landed gentry.

Geuze

https://www.boards.ie/discussion/comment/119547434#Comment_119547434

Inheritance tax is a minor tax that hardly anybody pays, due to the exemptions.

Yes, it does generate strong opinions.

Our CAT rate is high, yes, and SF want to increase it further, yes.

But there are exemptions, so few people pay CAT.

https://ifs.org.uk/books/tax-design

Mirrlees chapter 15 covers taxes on wealth transfers:

https://ifs.org.uk/sites/default/files/2022-08/15.%20Taxes%20on%20wealth%20transfers.pdf

"Taxation of wealth is a topic that excites strong passions. Some view it as the most direct means of effecting redistribution and key to achieving equality of opportunity. Others see it as the unjustified confiscation of private property by the state. Given these opposing viewpoints, it is not surprising that this is an area of taxation where international practice differs dramatically. Most OECD countries have taxes on income, spending, corporate profits, and so on, with recognizably similar goals. Practice with taxes on wealth varies widely. Some countries levy taxes directly upon wealth holdings, while others only tax transfers of wealth. There are some countries that do not tax wealth at all."

magicbastarder

https://www.boards.ie/discussion/comment/119547434#Comment_119547434

If I were to inherit my folks place it would cost more in tax then the purchace price of my own home 20yrs ago and an unimaginable multiplier of the cost they paid for it in the late 60's.

what has the cost they paid in the 60s got to do with anything? or the cost of your own house from 20 years ago?

if you're an only child and your parent's home is worth €1m, you have inherited €1m. the fact that that was not €1m sixty years ago is bizarrely irrelevant. you are the beneficiary of a €1m bequest, and you get to keep over €780k of that (if you're an only child).

Manach

So basically more money transfers so as to buy more votes for the government. As well, basing this on the book "What everone needs to know about Taxes" this will have a negative effect on the economy. Having a state body propose this is akin to a fox reviewing chicken coop security.

"Tax the rich."

OK, we will tax people on the value of their property, and the rich will pay more because their properties are valued higher.

"Ah no I don't want to pay tax though."

This sums up the problem in this country, too many people think they should pay no tax and that the rich can carry the burden. Too many people pay little to no tax, as was proven during the covid pandemic when income tax collections didn't drop in proportion with the amount of jobs that were lost or furloughed.

Nermal

https://www.boards.ie/discussion/comment/119547472#Comment_119547472

Farming and business assets are effectively exempt from CAT, which more or less amounts to a tax on Dublin property.

If we're aiming to prevent the creation of landed gentry, we're doing a rather poor job of it.

cnocbui

Ireland already has possibly the worlds highest inheritance taxes. There is absolutely no reason or justification in raising them as it's not like Ireland isn't already the top tax gouger in th this area, as it also is with CGT. VAT is also one of the higest rates around and I'm not aware of any other country with DIRT tax. And then there is VRT, again, a massive gouge of a tax that puts Ireland in a class of it's own internationally.

Maybe this country could learn to live within it's means by not already having the second highest paid civil servants in the EU and then going and having talks aimed at paying them even more.

This is why the commissioner wants to raise taxes, so the state can afford to pay civil servants even more than they are already getting.

As for raising excise on fuels - in a country where the operating costs of a car are already almost the highest in the EU, that is not justifiable:

"Ireland tops the league for the cost of taxing and insuring a car, and is second only to Holland for the cost of buying a new car."

Liz Truss is suggesting a VAT cut to compensate for the spiralling cost of energy, and some boof head here wants to increase the cost of energy. An absolute head case disconnected from reality.

https://www.boards.ie/discussion/comment/119547639#Comment_119547639

This commission realise we are far too reliant on the tax take from 10 companies that in 2021 paid over 50% of the Corporation Tax receipts collected. And 100 companies paid over 80% of the Corporation Tax collected last year. https://www.irishtimes.com/business/economy/top-10-companies-now-pay-more-than-half-of-corporate-tax-1.4553695

I completely agree with you that current spending needs to be reigned in rather than increasing tax rates as proposed, but how the hell do we do this given the news this week of the latest public sector pay rise.

KaneToad

Not so sure about property tax. But definitely inheritance tax needs to increase. "Family money" is the biggest single factor in maintaining socio economic inequality in Ireland.

cnocbui

https://www.boards.ie/discussion/comment/119547881#Comment_119547881

"Ireland has the highest death taxes in world" https://www.independent.ie/business/irish/ireland-has-the-highest-death-taxes-in-world-30158169.html

So what do you see as the justification in increasing death taxes when they are already very high? If they were low to begin with... but they aren't.

Socio economic inequality: What you are on about is socialism. Ireland already has an incredibly generous social welfare system and low paid Irish workers are the lowest taxed in the EU.

Ireland is 148th in the world for social inequality. Australia is better at 158th.

Australia doesn't have any death taxes, so it would seem they aren't the magic bullet you think they are.

magicbastarder

i'd be curious to know what the average value of an estate is in ireland, when passed on in a will. because i suspect a considerable majority of irish people pay no to little inheritance tax on inheriting a parent's estate.

I'll use myself as an example, typical enough 1970s born with two siblings. my parents estate would have to be worth over €1m before we'd get a whiff of having to pay inheritance tax.

if the estate was worth €2m, we'd have to pay €110k each; think of how many of the world's smallest violins we'd be able to afford with the €1.65m we'd be left with, to play to ourselves.

Isn’t it an error to call it death tax? The persons estate who has died is not taxed, it is the person receiving the money, so it is an inheritance tax.

mid someone does and leaves their €1m house to their four kids, no one pays any tax, but in a lot of countries, the full €1m would be taxed and the leftovers divided out among the four offspring.

magicbastarder

i don't think i've heard it referred to as a death tax outside of boards; IIRC cnocbui is australian so is probably using the australian term.

cnocbui

https://www.boards.ie/discussion/comment/119548440#Comment_119548440

Yes, I think the Australian term is more appropriate. That was an Irish newspaper headline I quoted wherein it was referred to as death taxes.

bluedex

The commission output made reference to the re-distribution of wealth, property tax and CAT being some of the mechanisms to do so. Another poster also referenced it. This is socialism. Many people may agree with it but it brings its own multitude of problems, as history has shown, including the lack of incentive for entrepreneurship or basically lack of incentive to do anything more than the bare minimum.

To be blunt and very simplistic, why should people who do well have their wealth re-distributed to wasters?

bluedex

The commission also recommended a rise in PRSI payments by the self-employed, a levy on holiday homes, a congestion charge and higher excise duty on home-heating oil.

I'd love to inherit a gaff.

I'd to break my bollix for years working, whilst paying rent, to get the deposit for the gaff I bought. Next plan is to pay it off during the next 30 years..

Geuze

https://www.boards.ie/discussion/comment/119548369#Comment_119548369

It is called CAT, as it applies to gifts and inheritances.

Allinall

https://www.boards.ie/discussion/comment/119548657#Comment_119548657

People who do well don't have their wealth distributed anywhere, other than whoever they decide should get it.

Their beneficiaries will have part of the wealth distributed, but they could well be wasters.

magicbastarder

one of the outcomes of the system is that your father or mother could pay you €33,500 p.a. to sit on your ass doing nothing, and you'd get that money tax-free, for up to ten years.

and the PAYE chump working a job and contributing to the economy, getting the same income, would be paying approx €5.5k of that every year. but we're saying it'd be immoral to expect the person getting the money for free to have to pay more.

bluedex

https://www.boards.ie/discussion/comment/119548803#Comment_119548803

Yes they do, they pay taxes which go into the exchequer and are used to fund things like social welfare. Which is how it should be to a certain extent.

I think the question is, how far should that go? When is too much taken and subsequently re-distributed?

blanch152

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

Actually, because of the single year €3,000 exemption, they could pay you €39,500 p.a. tax free.

KaneToad

https://www.boards.ie/discussion/comment/119548074#Comment_119548074

https://www.irishtimes.com/business/personal-finance/reform-inheritance-tax-to-ease-inequality-says-oecd-1.4561893

The OECD see it differently. There is a very generous tax free allowance before anything at all is paid.

Call it what you want but the unequal distribution of wealth is a problem. There are structural biases that exist to ensure the status quo and the wealth imbalance remain. Inheritance being one of them.

People also often think it is their own brilliance or their own hard work that has them so financially secure when there are many more brilliant and more hard working who never got the leg up that they got.

Do you think Michael O'Leary got to where he is by brilliance & hard work alone? Or did his very wealthy parents, his education in one of the country's most expensive boarding schools and his friendships made there with contemporaries (Tony Ryan's two sons), play any part?

ticktickboom

They can **** off to be honest.

crossman47

https://www.boards.ie/discussion/comment/119547418#Comment_119547418

You're completely right. At last some common sense here.

Curious as to how people won't pay increased taxes? Local Property Tax compliance is extremely high, so that will be a difficult one to avoid. Acquisitions Tax is self assessed but if it goes through probate it will again be very difficult to avoid.

Murph85

Why raise PS pay, why not a pay rise for all with USC abolition? New petrol and diesel cars should have way higher motor tax rates. Increase LPT substantially or abolish the token gesture it is entirely.... hospitality vat rate for hotels increased to the original rate. Scratching the surface of tax raising measures I would introduce to massively reduce middle to high income earners excessive tax burden. 50 percent marginal tax rate that you get hit with at not much more than the living wage is a disgrace!

bluedex

https://www.boards.ie/discussion/comment/119549343#Comment_119549343

You have to incentivise innovation and entrepreneurship in general, to have a successful and consistently improving economy and society. Not punish it. Just because some people have geographic or family advantages doesn't change that. The begrudgery in Ireland to success is f**ing mind-blowing.

bluedex

https://www.boards.ie/discussion/comment/119550125#Comment_119550125

No, we need a broader tax base. It would be interesting to see some empirical evidence as to why some people feel taxes on property are successful in doing anything.

SC024

Interesting that there is no mention of the state trying to be more cost efficient, "ah sure we'll tax them some more "