Retired people are at a much lower risk of poverty than younger people

[The Horseman]

i'm not suggesting that, far from it.

Taxation should apply to all income, to all property and to all wealth.

If you means test the state pension, or free travel, or access to healthcare, then you do impoverish those who saved, or prepared for their retirement.
But, of course, parsimony and diligence are only part of the story. If you have lots of money, lots of property and lots of wealth, you will be able to have a very lavish retirement and so will be able to pay a bit extra for the public services that you use.

if you discourage people from planning for their future and enjoying the "fruits of their labour" then where do they get income from in retirement?

At what point do people take responsibility for themselves financially? I appreciate people should not be left to starve but if they make some decisions in life that don't work out for whatever reason why should those who's decisions work out be expected to help those again who's decision did not work out. Is this not what income tax is supposed to cover?

This is a genuine question?

 

[Allpartied]

if you discourage people from planning for their future and enjoying the "fruits of their labour" then where do they get income from in retirement?

At what point do people take responsibility for themselves financially? I appreciate people should not be left to starve but if they make some decisions in life that don't work out for whatever reason why should those who's decisions work out be expected to help those again who's decision did not work out. Is this not what income tax is supposed to cover?

This is a genuine question?

If the retiree bought his house in 1995, he's sitting on huge capital appreciation. He can use that to fund his retirement.

If the retiree bought his house in 2005, he might, by now, have just about recovered to the price he paid for it. Its possible he has had to extend his mortgage into retirement and will still have to pay it down, when his income is plummeting.

Retiree number one is not any more talented, or brighter than retiree number two. He's just benefited from the cycle of capitalist crisis. So, you can plan all you like, but the system might still shaft you.

 

[joe sod]

If the retiree bought his house in 1995, he's sitting on huge capital appreciation. He can use that to fund his retirement.

If the retiree bought his house in 2005, he might, by now, have just about recovered to the price he paid for it. Its possible he has had to extend his mortgage into retirement and will still have to pay it down, when his income is plummeting.

Retiree number one is not any more talented, or brighter than retiree number two. He's just benefited from the cycle of capitalist crisis. So, you can plan all you like, but the system might still shaft you.

But that "capitalist crisis " as you call it is paying for everything, it pays the social welfare, the public sector wages, the housing assistance payments ,the accommodation for the Ukrainian refugees etc etc.
That is all payed for by and large by our capitalist system. Ireland has benefited more than any country from FDI and it is this that is contributing to the bulk of our taxation.
Without FDI Ireland would be bankrupt because it pays for everything

 

[T McGibney]

Capitalist crisis my nelly. Government tax and spend crisis more like it. And it's about to get infinitely worse.

 

[Allpartied]

But that "capitalist crisis " as you call it is paying for everything, it pays the social welfare, the public sector wages, the housing assistance payments ,the accommodation for the Ukrainian refugees etc etc.
That is all payed for by and large by our capitalist system. Ireland has benefited more than any country from FDI and it is this that is contributing to the bulk of our taxation.
Without FDI Ireland would be bankrupt because it pays for everything

Without wishing to get into an academic argument, I would suggest that labour pays for everything and creates all wealth. Its just that some people are very good at exploiting labour, which means that wealth is poorly distributed. So government has to intervene to ensure a more equitable distribution. Believe me, left to their own devices the multi national, or the million euro salary guys wouldn't hand over one cent.
I used the phrase crisis, because thats what economists call it and I doubt we could call 2008 anything other than a crisis for capitalism.

But capitalist cycle works just as well.
Some people get lucky, some people get burnt.

 

[The Horseman]

If the retiree bought his house in 1995, he's sitting on huge capital appreciation. He can use that to fund his retirement.

If the retiree bought his house in 2005, he might, by now, have just about recovered to the price he paid for it. Its possible he has had to extend his mortgage into retirement and will still have to pay it down, when his income is plummeting.

Retiree number one is not any more talented, or brighter than retiree number two. He's just benefited from the cycle of capitalist crisis. So, you can plan all you like, but the system might still shaft you.

But what if you have two retiree's in your number 1 category one who worked bought his house, invested in a pension, live frugally etc and the other enjoyed life to the full and did not plan for their future. Both had the same opportunities.

Should both be treated the same in your view?

 

[T McGibney]

Without wishing to get into an academic argument, I would suggest that labour pays for everything and creates all wealth. Its just that some people are very good at exploiting labour, which means that wealth is poorly distributed. So government has to intervene to ensure a more equitable distribution. Believe me, left to their own devices the multi national, or the million euro salary guys wouldn't hand over one cent.

Ironically, and to bring this all back on-topic, the best insurance anyone can have against poverty in old age is to be entitled to one of the better public sector pensions.

 

[Purple]

But what if you have two retiree's in your number 1 category one who worked bought his house, invested in a pension, live frugally etc and the other enjoyed life to the full and did not plan for their future. Both had the same opportunities.

Should both be treated the same in your view?

What if the guy who worked hard bought his house, invested in a pension, live frugally etc is the guy who bought the house in 2005?

Taxation and social transfers aren't about fairness, they are about maintaining a reasonably equitable society.

When we work the State takes a cut of the returns on our labour. How is that more equitable than it taking a cut on wealth generated through capital appreciation that most people had no active role in creating?

 

[The Horseman]

What if the guy who worked hard bought his house, invested in a pension, live frugally etc is the guy who bought the house in 2005?

Taxation and social transfers aren't about fairness, they are about maintaining a reasonably equitable society.

When we work the State takes a cut of the returns on our labour. How is that more equitable than it taking a cut on wealth generated through capital appreciation that most people had no active role in creating?

Try answering the question I asked.

 

[Groucho]

@Groucho "hedonistic lifestyle " out of curiosity was it food, sweet things or alcohol related that your diabetes originated from?

All of the above - in addition to little or no exercise. A lethal combination.

 

[Sophrosyne]

Nothing is free, it is all paid for, either individually or communally.

The way to address inequalities is via a progressive taxation system.

If older retired people are drowning in cash then tax their income.
If they hold mutlitple properties then tax those properties.
If they have an income stream from investments or equities, then tax those sources too.

If retired people are dying with millions in the bank, then raise death duties too.

1. If their income from all sources exceeds €18,000 (single) or €36,000 (married), there is no exemption and they are taxed in the normal way
2. They pay property taxes based on property value
3. If they have investment income - see 1.

 

[Purple]

Try answering the question I asked.

Okay.

Should both be treated the same in your view?

Yes, because;

Taxation and social transfers aren't about fairness, they are about maintaining a reasonably equitable society.

I've been working fulltime for over 30 years and during that time I've averaged well over 50 hours a week. I pay half my total income in tax. I've no real problem with that as I'm well paid and taxes are the price of civilisation. I do have a problem with the amount of my money the State wastes but that's a different issue.

The current structures around wealth tax suit me as I got on the property ladder before the boom and I had a pension before QE started. Timing has made me over a half a million euro in capital appreciation. I don't think it is fair that I should get that tax free when labour is taxed so heavily. It is a recipe for a very unequal society.


Your turn.

 

[Purple]

1. If their income from all sources exceeds €18,000 (single) or €36,000 (married), there is no exemption and they are taxed in the normal way

But with higher allowances and fewer taxes levied than on younger people.

1. They pay property taxes based on property value

Property tax (the only wealth tax that can realistically be collected) is extremely low in this country.

 

[Allpartied]

Ironically, and to bring this all back on-topic, the best insurance anyone can have against poverty in old age is to be entitled to one of the better public sector pensions.

Thats true, in the sense that it protects against poverty. But the average public sector pension is around 10k, on top of the state pension. So, a pretty modest income.

 

[LS400]

I got on the property ladder before the boom and I had a pension before QE started. Timing has made me over a half a million euro in capital appreciation. I don't think it is fair that I should get that tax free when labour is taxed so heavily.

Why, you took the (risk) investment, were you told you would earn half a mill when you took on the challenge of purchasing the property?

Property tax (the only wealth tax that can realistically be collected) is extremely low in this country.

In isolation, maybe, but grouped with all other taxes? Really

 

[Peanuts20]

I do think the title of the thread is potentially a little misleading.

Reality is that some retired people are well off, many are not, especially those on the state pension only. In a lot of cases, they were never given the opportunity to work or contribute to a private pension simply because they were women and the culture of Ireland and the law (the ban on married women working) meant their job was to mind the house, husband and kids.

Those who are well off, paid off their mortgage, got a good pension or invested their time and money wisely pay income tax on that income.

Many have their asssets and income taken as part of the fair deal scheme (I'm not complaining about that but it is a fact and the one thing I've learnt in the last number of years is the importance of retirement planning and potentially gifting/moving assets so they fall outside of the remit of that scheme

 

[Purple]

Why, you took the (risk) investment, were you told you would earn half a mill when you took on the challenge of purchasing the property?

No, I bought somewhere to live. I did buy my first place prior to EMU because I though that prices would go up but not by as much as they did.

In isolation, maybe, but grouped with all other taxes? Really

No, but that's the point I was making. We tax wealth creation at a very high rate but we don't tax capital appreciation on wealth retention much at all. I like to see that rebalanced.

 

[Purple]

Reality is that some retired people are well off, many are not, especially those on the state pension only

Most live on more than the State pension. The minority who rely on it alone are certainly not well off.

 

[Bluefin]

No, I bought somewhere to live

This is the critical point Purple...we all just bought a home to live in. Our main concern was ensuring we were employed and could afford the mortgage payments. I'd imagine most of us never really thought about capital appreciation... It has happened. Just because there's equity in our homes,this does not make these people wealthy

Imagine if these people were logical...take all the equity from their home and live way beyond their means in the early stages of retirement (which is quite easy to do..think 3 star versus 5 star, fab hols, top ev car, meals out etc)

Money is all gone quite quickly..they fall back on the state for all there needs.. Utopia!

 

[Purple]

Just because there's equity in our homes, this does not make these people wealthy

But it does. If we own our own home then we don't have the cost of rent or mortgage payments. It gives us money to leave to our children. It gives us the option of downsizing. It gives us options and financial freedom.