Is VAT unfair?

[MOB]

"Remember that the fairest societies are those where all people have equal opportunities, not those where all people have equal income."

I agree with this sentiment.

But huge disparities in earnings are in themselves instrumental in reducing equality of opportunity. Capital has a tendency to accumulate from one generation to the next. This has a tendency to produce a wealthy elite class - which is always an obstacle to meritocracy. To be blunt, the children of the Smurfit\O'Reilly\Magniers\Dunne dynasties, (and many others) clearly have economic opportunities which most people in our society do not enjoy.

We poke fun at the British aristocracy, deriding the fact that they treat their elite position as a birthright rather than something earned. But we are in danger of moving the same way and creating a similar class of "Trustafarians" ( I know it doesn't strictly apply to the working wealthy, but I just love that word ) within a couple of generations.

It is not a simple problem. A wise taxation policy should encourage enterprise, but should seek to prevent the concentration of wealth from one generation to the next.

We must encourage the wealthy to breed like rabbits and to father children outside of marriage with gay abandon if we are to build a just society

 

[Purple]

"Remember that the fairest societies are those where all people have equal opportunities, not those where all people have equal income."

I agree with this sentiment.

But huge disparities in earnings are in themselves instrumental in reducing equality of opportunity. Capital has a tendency to accumulate from one generation to the next. This has a tendency to produce a wealthy elite class - which is always an obstacle to meritocracy. To be blunt, the children of the Smurfit\O'Reilly\Magniers\Dunne dynasties, (and many others) clearly have economic opportunities which most people in our society do not enjoy.

We poke fun at the British aristocracy, deriding the fact that they treat their elite position as a birthright rather than something earned. But we are in danger of moving the same way and creating a similar class of "Trustafarians" ( I know it doesn't strictly apply to the working wealthy, but I just love that word ) within a couple of generations.

It is not a simple problem. A wise taxation policy should encourage enterprise, but should seek to prevent the concentration of wealth from one generation to the next.

We must encourage the wealthy to breed like rabbits and to father children outside of marriage with gay abandon if we are to build a just society

Or we could have inheritance tax...

 

[csirl]

Some people work hard in order to give their children an easier life - would these people lose motivation?

I'm not saying I'm in favour of generational wealth transfer as I have meritocrat tendencies, but there is a logic to wealth transfering with successful genes.

 

[ubiquitous]

Or we could have inheritance tax...

Oddly enough, inheritance tax is not really much of a burden in Ireland, once you inherit from your parents and benefit from the €520k+ exemption. It is a major burden if you inherit from an uncle/aunt or from others in which case you're only entitled to €52k/€20k-odd exemption. I've yet to understand the rationale for this inequality.

 

[Purple]

Oddly enough, inheritance tax is not really much of a burden in Ireland, once you inherit from your parents and benefit from the €520k+ exemption.

If you inherit millions it is (since the point was made about the very rich).

 

[ubiquitous]

If you inherit millions it is (since the point was made about the very rich).

It still isn't much of an issue for almost anyone. The combination of agricultural relief, business relief and to a lesser extent PPR relief means that individuals can sometimes transfer estates worth many millions to their children with zero CAT liability.

 

[Purple]

It still isn't much of an issue for almost anyone. The combination of agricultural relief, business relief and to a lesser extent PPR relief means that individuals can sometimes transfer estates worth many millions to their children with zero CAT liability.

Fair enough, you’re the accountant; I bow to your superior knowledge on the subject.

 

[PostTiger]

It is not a simple problem. A wise taxation policy should encourage enterprise, but should seek to prevent the concentration of wealth from one generation to the next.

I dont believe an equitable tax system should penalise those who accumulate wealth, on which they pay tax and subsequently seek to pass that wealth on to the next generation.

Many would think it altruistic to leave ones estate to charity while if an estate was left, for example to an incapacitated child needing life long care, 20% tax would be imposed after the tax free threshold is exceeded.

We must encourage the wealthy to breed like rabbits and to father children outside of marriage with gay abandon if we are to build a just society

How is a truly meritocratic tax system to be achieved? Tax smaller families more for larger inheritences?

 

[MOB]

"We must encourage the wealthy to breed like rabbits and to father children outside of marriage with gay abandon if we are to build a just society "

Just in case anyone is not absolutely clear, the ol' tongue was lodged firmly in the cheek when this comment was made.

There is a funny scene in the comedy "Dirty rotten scoundrels" where Michael Caine tries to educate Steve Martin on the "right" uses to which wealth can properly be put. -100 year old gardens brought back to life; old wine ("of course I'd never drink it") and so on. It caricatures something which is real - being the difference in attitudes to wealth in England and America. I rather suspect that here in Ireland, we have not so much a middle ground between both attitudes, but that we have just have no societal consensus (which is no bad thing). We like and respect 'old' values, but we vaguely resent 'old money'. But we are divided on our views of 'new money' too.

The fact is there is no easy answer to the problem of what (if anything) can or should be done about the accretion of massive wealth to a small number of people. There is no easy answer to the question of whether very very large inheritances are a good thing for those who get them or for the society in which they live. But it is certainly worth continued debate.