Tax the rich

Monty Burnz · 09-09-2012 06:43PM

Cheerful Spring wrote: »

If there is no benefit for our country with wealthy people staying or going. Well than why are you so worried? Business owners tend to be well off and i will agree it would not be good to see them leaving this country in a panic. But a slight rise in their tax is not going to cause that much of an effect. I believe that. Business leaders of Irish decent especially there not going to uproot their families because of a slight tax increase and move to another country.

France has a higher tax rate is it very high (75%) I can see why the wealthy people of that country would be upset with it. But its unlikely France has done this without looking at the consequences first. Well i hope they have?

Anyways our high tax rate is 35% i believe way lower. Is not likely there will a jump to the French rate here. And how many French who were wealthy left France before this increase. Be interesting to find out. This will be a model to follow and set what happens over there in the coming months and years.

A couple of points:

1. I am not asking about 'slight' increases in taxes, I'm asking about the consequences of increases on the scale proposed by the ULA and others.
2. Our upper rate of income tax is not 35%, it is 41%.

leincar · 09-09-2012 06:48PM

I think Monty Burnz asks a very reasonable and cogent question. Unfortunately until tax rises happen we can't possibly have a definitive answer.

However, we can and probably should look at it in the only possible way, which is anecdotal, assumption, presumption and conjecture.

By any measure of wealth I am in the top 1% of income earners in this country. I am not a businessman or Entrepreneur, I work for a multi-national. The first choice I have made is to live in Ireland. I don't have to. I could choose to live here on a part-time basis and pay no income tax in this State. I do it as I belive I have a moral obligation to pay whatever tax code is put in place by the State in which you reside.

Remember in the late 50's in America under a Republican president (Eisenhower) the top rate of personal tax was in and around 90%. There was no mass exodus and I don't believe there will be this time. Further, as income rates rise in the developed world, high net worth individuals will have fewer places in which they can or are willing to put there money.

People who have wealth should and must pay their share. We cannot have a society that is based on low tax for everyone and everything as the State needs to function. Admittedly this State needs an enema in its public service, a kick in the ass to the unions and a slap on the face to those who advocate low tax. The majority of people who work are 'worker bees' who need to know that if circumstances change for the worse a safety net is available to them.

I find the attitude of some wealthy people to be repugnant. The attitude of 'I'm alright Jack' is well and good, but they will be the first people to cry foul when people go after them.

The same is true of the attitude of ULA/Socialist party/ Sinn Fein. It is politics of envy, plain and simple. The majority of people making their way in the world want to do the best they can for their family and themselves. They, whether in a large or small way are engaged in wealth generating for betterment. These people, if they are cleaners to stock brokers all work for a living and are the working class. ULA/Socialist Party/Sinn Fein don't really care about these people. They care more about the shameless classes, who have no interest in getting up and bettering themselves and will quite happily rely on the State for pretty much everything.

I think the majority of wealthy will stay, possibly or probably not out of a sense of morality, but like most people dislike change, and accept life as a fait accomplí.

Now for the part that will make me leave. If any administration bring in a separate wealth tax on assets, I'm gone. I will not countanence a tax on an asset where I have already bought this asset with money earned net of tax. It is pure theft. They can take capital gains tax if I ever sell it, but an annual charge. Nope.

Cheerful Spring · 09-09-2012 06:57PM

Monty Burnz wrote: »

A couple of points:

1. I am not asking about 'slight' increases in taxes, I'm asking about the consequences of increases on the scale proposed by the ULA and others.
2. Our upper rate of income tax is not 35%, it is 41%.

Still low plus the very rich also get around paying the right amount of tax here because of legal loopholes. The number of wealthy people in Ireland who pay that rate is questionable least to me. But your right 41% is the standard.

What is the scale they propose? I have not been following this story. I just gave an opinion on what was been said in this thread.

ArmaniJeanss · 09-09-2012 07:38PM

Cheerful Spring wrote: »

What is the scale they propose? I have not been following this story. I just gave an opinion on what was been said in this thread.

For information purposes Sinn Fein propose a third band of 48% on income over €100K, and a 1% yearly tax on all assets over a €1M.

So someone with say a €300K salary, a house worth €1.5M and €500K in their bank account would pay a chunk more (roughly €14K I think) in income tax and also €20K in wealth payments every year.

http://www.sinnfein.ie/taxation-measures

Diarmuid · 09-09-2012 08:09PM

An article on France's wealth tax http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010.html

Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998

OMD · 09-09-2012 09:58PM

ArmaniJeanss wrote: »

For information purposes Sinn Fein propose a third band of 48% on income over €100K, and a 1% yearly tax on all assets over a €1M.

So someone with say a €300K salary, a house worth €1.5M and €500K in their bank account would pay a chunk more (roughly €14K I think) in income tax and also €20K in wealth payments every year.

http://www.sinnfein.ie/taxation-measures

Good info. It may be slightly off topic but they say they would introduce a wealth tax of 1% on all assets in excess of 1 million euro excluding homes under 1.2 million, farms and working assets. They say this will raise €800 million a year. Where does this figure come from? It sounds massive. It means there is 80 billion in basically non-performing assets in ths country. Where are they getting this figure? if I have a home worth 2 million but loans of 2 million do I get taxed?

Icepick · 09-09-2012 11:03PM

OMD wrote: »

Good info. It may be slightly off topic but they say they would introduce a wealth tax of 1% on all assets in excess of 1 million euro excluding homes under 1.2 million, farms and working assets. They say this will raise €800 million a year. Where does this figure come from? It sounds massive. It means there is 80 billion in basically non-performing assets in ths country. Where are they getting this figure? if I have a home worth 2 million but loans of 2 million do I get taxed?

The SF figures are made up.

ArmaniJeanss · 09-09-2012 11:37PM

OMD wrote: »

Good info. It may be slightly off topic but they say they would introduce a wealth tax of 1% on all assets in excess of 1 million euro excluding homes under 1.2 million, farms and working assets. They say this will raise €800 million a year. Where does this figure come from? It sounds massive. It means there is 80 billion in basically non-performing assets in ths country. Where are they getting this figure?

As far as I know their figures were proofed by the Department of Finance and accepted as being fundamentally correct (no-one accused them of lying about this so I think we can accept it as correct).
Obviously though many believe (like the OP's premise) there would be a flight of money before such a tax was collected. And the immovable assets, like houses? ; I'd have thought the €2M+ houses would quickly fall in value as demand would surely drop.

OMD wrote: »

if I have a home worth 2 million but loans of 2 million do I get taxed?

I'd be 99% sure that yes you would. The fact that the super-earners like you might have a 3.5x mortgage never seems to be taken into account when we look to 'tax the rich'. We see this attitude in threads were people say that 'no-one in the public service should earn more than €100K, redue everyone to this amount, its still a great salary.' Well if you borrowed sensibly on the basis of your €200K salary then you are life-fcuked overnight.

Good loser · 10-09-2012 12:04AM

Icepick wrote: »

The SF figures are made up.

I would think so.

We had a 1% wealth tax here in the 1970s. It included land and 'productive assets' as far as I know.

My recollection is that it raised less than £5 m per annum.

Does anybody out there know? Sinn Fein research department?:rolleyes:

RBB reckons it will raise €5 bn to €10 bn per annum.

OMD · 10-09-2012 07:32AM

ArmaniJeanss wrote: »

As far as I know their figures were proofed by the Department of Finance and accepted as being fundamentally correct (no-one accused them of lying about this so I think we can accept it as correct).
Obviously though many believe (like the OP's premise) there would be a flight of money before such a tax was collected. And the immovable assets, like houses? ; I'd have thought the €2M+ houses would quickly fall in value as demand would surely drop.

.

So they are saying, excluding all business, farms and houses under 1.2 million, there is an additional 80 billion of assets worth over a million each! That I'm afraid requires backing up. It sounds so fundamentally wrong. Saying someone in Dept of Finance says there sums are correct is not enough. We need some idea of where this money/asset is.

Markcheese · 10-09-2012 11:15AM

Screw taxing the rich ( although I would up the minimum tax take on high earners)
Tax rich pensioners.... Punitively if someone is on a high defined benefit pension, or a pension linked to who-ever currently does they're old job... Senior bank officials... Developers/ builders who got huge tax breaks to have protected pension pots....
..... Sliding scale for those drawing pension of say 30/40 grand becoming seriously high for those earning over 100 grand....
You can't easily move a pension pot... And the largesse of the boom is being payed for now by those with big mortgages and kids ....

Geuze · 10-09-2012 11:57AM

OMD wrote: »

So they are saying, excluding all business, farms and houses under 1.2 million, there is an additional 80 billion of assets worth over a million each! That I'm afraid requires backing up. It sounds so fundamentally wrong. Saying someone in Dept of Finance says there sums are correct is not enough. We need some idea of where this money/asset is.

No problem, the CBI publishes Household Financial wealth stats.

http://www.centralbank.ie/press-area/press-releases/pages/quarterlyfinancialaccountsforirelandq12012.aspx

Household Net Worth is 100,000 per person, or 448 bn in total.

Geuze · 10-09-2012 12:01PM

Household wealth = 636 bn approx, accroding to the CBI.

This includes property and financial assets.

Household debt = 188.5 bn.

Net worth = 448bn.

Monty Burnz · 10-09-2012 12:02PM

Geuze wrote: »

No problem, the CBI publishes Household Financial wealth stats.

http://www.centralbank.ie/press-area/press-releases/pages/quarterlyfinancialaccountsforirelandq12012.aspx

Household Net Worth is 100,000 per person, or 448 bn in total.

This 448 bn is composed of:

Household net worth is calculated as the sum of household housing and financial assets minus their liabilities. The Central Bank of Ireland estimate of housing assets is based on the size and value of housing stock. Data on the value of housing is obtained from the CSO’s ‘Residential Property Price Index’ (RPPI).

So it includes property (and SF and ULA are opposed to property taxes) as well as pension funds, life assurance and savings.

Geuze · 10-09-2012 12:04PM

Households according to Census = 1,654,000

So here are the wealth per houshold figures:

Gross wealth = 384,500

Net wealth = 270,000

OMD · 10-09-2012 03:02PM

Geuze wrote: »

OMD wrote: »

So they are saying, excluding all business, farms and houses under 1.2 million, there is an additional 80 billion of assets worth over a million each! That I'm afraid requires backing up. It sounds so fundamentally wrong. Saying someone in Dept of Finance says there sums are correct is not enough. We need some idea of where this money/asset is.

No problem, the CBI publishes Household Financial wealth stats.

http://www.centralbank.ie/press-area/press-releases/pages/quarterlyfinancialaccountsforirelandq12012.aspx

Household Net Worth is 100,000 per person, or 448 bn in total.

Still no good I'm afraid. SF are saying assets over 1 million totals 80 billion excluding business assets and houses. Those figures do not show that.

Geuze · 10-09-2012 03:20PM

Then that is an estimate by SF, and so open to dispute and debate.

I have never seen a breakdown of wealth data into deciles, or into different amounts of wealth.

OMD · 10-09-2012 03:35PM

Geuze wrote: »

Then that is an estimate by SF, and so open to dispute and debate.

I have never seen a breakdown of wealth data into deciles, or into different amounts of wealth.

Well sinn fein must have it unless of course they are full of crap. Something tells me they might be.

Icepick · 11-09-2012 05:17PM

ArmaniJeanss wrote: »

As far as I know their figures were proofed by the Department of Finance and accepted as being fundamentally correct

source?

mollymosfet · 11-09-2012 07:08PM

If this was true, then higher tax economies like those in the Nordic model would be faring worse rather than better. Also note that taxes, for example, in the US are at an all time low for the very wealthy, yet it's not helped at all.

Either way allowing the rich to hold the country to ransom if the poor don't bear their burden is pretty ludicrous - there must be a better way.

mollymosfet · 11-09-2012 07:09PM

KyussBishop wrote: »

Heh, this is a recurring fallacy which is so weak, that every time it is brought up no bad consequences are stated, just that "they'll leave" with the implication that it's a bad thing; what exact bad events will happen? (and back them up with proof)

We're talking about income tax here, not corporation tax; it's not like an entire company is going to up and leave, causing a large loss of jobs, just one person whose job opening will soon be filled by someone else, causing no loss in tax intake.

Past a certain income bracket, we would mostly be talking about overpaid management/executive positions at large companies as well; these are pretty heavily invested job positions, taking significant time to move up the ladder (and usually easily replaceable), so there aren't exactly going to be similarly paying jobs waiting for them as soon as they move to another country.

The general crux of the fallacy is that the jobs will leave, and there's just no proof of this at all.

Yes. Rich people do not equal jobs. While the Rich can invest they can also be a drain on the economy in other ways by hording wealth rather(as opposed to it being passed around).

mollymosfet · 11-09-2012 07:12PM

ResearchWill wrote: »

I read recently need to find it again, that less than 12,000 people in this state pay 18% of the income tax collected. That scarry.

http://www.ronanlyons.com/2009/07/28/a-little-quiz-on-irelands-income-tax/

That depends entirely on how much of the wealth they own. If they owned, for example, 40% of the wealth(Which is very possible, and I believe at least 25% may be accurate), then it would actually be fairly low. Also please note that he doesn't reference where he gets his stats and several other inconsistencies are pointed out in the comments. He does post a link to something on the revenue website but the link is now broken so there's no way of verifying it.

mollymosfet · 11-09-2012 07:21PM

Some damning info in this -

http://robertnielsen21.wordpress.com/2012/07/26/rich-get-richer-poor-get-poorer/

The top earners actually have more disposable income than pre-recession.

Wow.

mollymosfet · 11-09-2012 07:25PM

Cheerful Spring wrote: »

Still low plus the very rich also get around paying the right amount of tax here because of legal loopholes. The number of wealthy people in Ireland who pay that rate is questionable least to me. But your right 41% is the standard.

What is the scale they propose? I have not been following this story. I just gave an opinion on what was been said in this thread.

35% may be more realistic as to what they actually end up paying though. There are tons of loopholes we could close.

mollymosfet · 11-09-2012 07:27PM

Diarmuid wrote: »

An article on France's wealth tax http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010.html

Capital in the country is not the same as money in the economy. I don't see much reason to trust that piece anyway.

Monty Burnz · 11-09-2012 09:17PM

mollymosfet wrote: »

Yes. Rich people do not equal jobs. While the Rich can invest they can also be a drain on the economy in other ways by hording wealth rather(as opposed to it being passed around).

I think this suggests that you don't understand this area very well. How do you suggest that they hoard wealth and stop it being passed around?

mollymosfet · 11-09-2012 09:24PM

Monty Burnz wrote: »

I think this suggests that you don't understand this area very well. How do you suggest that they hoard wealth and stop it being passed around?

Looking at 90% of what you've said in this thread you don't understand this at all.

The fact is that when you give more money to poorer people(tax the rich, increase welfare/minimum wage etc.) they are more likely to spend all of it very soon. Rich people often have far more money than they're realistically going to spend. So basically you get more money back from the poor than the rich.

Monty Burnz · 11-09-2012 09:39PM

mollymosfet wrote: »

Looking at 90% of what you've said in this thread you don't understand this at all.

The fact is that when you give more money to poorer people(tax the rich, increase welfare/minimum wage etc.) they are more likely to spend all of it very soon. Rich people often have far more money than they're realistically going to spend. So basically you get more money back from the poor than the rich.

Right, and what do you think rich people do with their money?

Icepick · 11-09-2012 10:59PM

mollymosfet wrote: »

Looking at 90% of what you've said in this thread you don't understand this at all.

The fact is that when you give more money to poorer people(tax the rich, increase welfare/minimum wage etc.) they are more likely to spend all of it very soon. Rich people often have far more money than they're realistically going to spend. So basically you get more money back from the poor than the rich.

wealth is not a limited pot so this does not matter as much as you think

Monty Burnz · 11-09-2012 11:10PM

Icepick wrote: »

wealth is not a limited pot so this does not matter as much as you think

In fact, it doesn't matter at all.

Tax the rich

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