There's serious risk involved in investing in shares that's not properly factored in when setting cg tax rates and the way gains/losses are offset by revenue rules is not very fair.... Revenue always benefit on the upside.. I can completely understand why people leave there hard earned cash on deposit with banks..Not if she inherited it. If that happened she may have paid no tax on it but at most she paid 33%. If it's from the sale or stock or shares then she'll have only paid 33%.
If she worked and actually created wealth through her labour then she will probably have paid over 50% on it. I've a problem with that imbalance.
That's a different question. In my opinion the State already receives more than enough to provide every service and support and build every piece of infrastructure than is needed. It, and the people who work for it, just choose to waste it.
You have answered your own question. if you did not earn in the first place you would not have purchased a property and invested in a pension.I'd like to explore the proposition that all wealth is earned unless it is inherited. This idea doesn't stand up to the most basic scrutiny.
I've been working full time since I was 17. For the first 15 years of my working life I did an average of over 60 hours a week and usually worked 6-7 days a week. I'm 50 now and well off so I fall into the "I've worked hard all my life" category. But... but, most of my actual wealth is unearned. Over the last 12 years, due entirely to the results of Quantitative Easing, the value of my pension has doubled and the value of my property assets has also doubled. I have only a token tax liability on the property assets and no liability on by pension until I draw it down.
So plenty of rich older and middle aged people have worked hard all their lives (and plenty haven't) and plenty of them are rich (rich means you have wealth, not necessarily a high income) but most of them didn't earn their wealth, it's just due to housing and pension values inflating.
I have a very good income on which I pay over 50% in tax.
The tax rate on the creation of wealth is 50%. The tax rate on the accumulation of wealth through inheritance and asset value inflation is extremely low. That doesn't make for an egalitarian society. Either does our welfare system.
The problem is that we over tax earned income and under tax wealth while having amongst the highest rates of welfare in the world.
My problem with McWilliams is that he's a populist and doesn't have the backbone to say that if we want lower housing costs and less nepotism we need significantly higher property taxes and a ban on the State funding the purchase of any private house.
Yes, but the wealth that resulted from that investment was unearned.You have answered your own question. if you did not earn in the first place you would not have purchased a property and invested in a pension.
No, I was lucky and had skin in the game before a massive property boom and later a decade and a half of QE.You paid via your earned income to be in the position you are.
So do most working people. We are lucky enough to have been earing money when the value of labour relative to capital was much higher.I am a similar vintage to you. Most of my contemporaries are exactly like you and I. We worked for what we have and sacrificed to get where we are.
That's exactly my point; older people who are rich and think they earned it despite the fact that they quite clearly didn't. Their entitlement is astounding, especially as we bailed ourselves out of the 2008 crash by mortgaging our children's future. Our behaviour, and more so the behaviour of our parents was reprehensible. And now we wag our fingers at those same young people we sold out. It's just appalling.Unfortunately we have an entitlement culture prevalent in Ireland were people feel they are entitled to something without sacrificing to achieve it.
And they'll sacrifice way more than we did because their homes are way more expensive than ours were relative to income. And that's our fault.My nieces and their partners are in their 20's with modest incomes but were able to purchase property without family financial support. They sacrificed to get to purchase property.
There's way more of a risk in setting up a business and employing people. That actually creates real wealth, but the income from it is taxed at over 50%.There's serious risk involved in investing in shares that's not properly factored in when setting cg tax rates and the way gains/losses are offset by revenue rules is not very fair.... Revenue always benefit on the upside.. I can completely understand why people leave there hard earned cash on deposit with banks..
Agree... These people need to be incentivised as well.There's way more of a risk in setting up a business and employing people. That actually creates real wealth, but the income from it is taxed at over 50%.
My nieces and their partners are in their 20's with modest incomes but were able to purchase property without family financial support. They sacrificed to get to purchase property.
And QE has artificially inflated the cost of capital way beyond what it should be relative to labour.Our system is high income tax, low (no) wealth taxation. The reason they had to sacrifice was that the burden of taxation was stacked against them (and their generation) as it favours capital over labour. In order to access wealth, income has to be earned first. Lowering the barriers to acquire wealth i.e. shifting the burden from generating wealth on to realising wealth is surely better for society as a whole.
The rate on taxation on the creation of wealth (work) is over 50%.Or should that wealth be taxed again and again and again? To bring this to its conclusion then why bother trying to better oneself to accumulate wealth at all?
Agree with everything you've said here, but just to be a bit pedantic for the sake on an honest discussion, most people are not paying 50% on their income. On say €150k your effective income tax rate is 42%, and you'll probably be making up to 25% pension contributions bringing your effective rate below 30%.The rate on taxation on the creation of wealth (work) is over 50%.
The rate of tax on the retention and capital appreciation of wealth ranges from 0% to 33%. I find that inequitable and socially undesirable.
The problem is that any additional income is taxed at over 50%. That's a disincentive to work harder and create more wealth.Agree with everything you've said here, but just to be a bit pedantic for the sake on an honest discussion, most people are not paying 50% on their income. On say €150k your effective income tax rate is 42%, and you'll probably be making up to 25% pension contributions bringing your effective rate below 30%.
Okay, a coupe on €150k a year will pay €50k in income taxes of various sorts.Then I would wonder if there might be a question of lifestyle and priorities. I say that as a member of a household who "survived" and manage to save and invest on half of this for most of the decade having bought during the Celtic Tiger.
Agree with everything you've said here, but just to be a bit pedantic for the sake on an honest discussion, most people are not paying 50% on their income. On say €150k your effective income tax rate is 42%, and you'll probably be making up to 25% pension contributions bringing your effective rate below 30%.
Except that they really didn't.It will be interesting to see that happenings when all the Build to Rent apartments in RTZ become unprofitable due to inflation + interest rates increases, long term maintenance costs, and not being able to increase rents etc. I suppose the government will 'relax' the RTZ rules, just like they did the new build apartment standard requirements.
Actually he has, I was at a private event he spoke at a few months ago and he more or less espoused Georgism and explained it to the audience. He was also asked a question about a likely Sinn Féin government and he was surprisingly cynical about them (this was a private audience of people who work in financial services, mind).The tax rate on the creation of wealth is 50%. The tax rate on the accumulation of wealth through inheritance and asset value inflation is extremely low. That doesn't make for an egalitarian society. Either does our welfare system.
The problem is that we over tax earned income and under tax wealth while having amongst the highest rates of welfare in the world.
My problem with McWilliams is that he's a populist and doesn't have the backbone to say that if we want lower housing costs and less nepotism we need significantly higher property taxes and a ban on the State funding the purchase of any private house.
So he does it in private but not in public. Okay.Actually he has, I was at a private event he spoke at a few months ago and he more or less espoused Georgism and explained it to the audience. He was also asked a question about a likely Sinn Féin government and he was surprisingly cynical about them (this was a private audience of people who work in financial services, mind).
Or inheriting them directly from Granny. With reducing family sizes and more intergenerational wealth this will become more of a factor.That is just one group - this is adult children being gifted entire homes or having them bought for them by wealthy parents, or with money they have acquired from wealthy parents
In the context of encouraging wealth creating effective tax rates are irrelevant.Its a fair point on effective taxation, that usually gets missed.
Classic McWilliams. He's very good at telling whatever audience that's in front of him what they want to hear.So he does it in private but not in public. Okay.
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