Why are Capital Gains taxed at a lower rate than Income?

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DazedInPontoon said:
Not necessarily in Ireland though. The higher the rate the greater the motive for people with unrealised gains to relocate before realising them.
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Yes, exactly. If you have gains in the millions it is well within your self interest to head off to a favorable jurisdiction & take up tax residence there before you cash out. In fact you wouldn't even have to be in the million bracket.
 
Horatio said:
Yes, exactly. If you have gains in the millions it is well within your self interest to head off to a favorable jurisdiction & take up tax residence there before you cash out. In fact you wouldn't even have to be in the million bracket.
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Only works if the gains are derived from non-Irish situated assets.
 
Brendan Burgess said:
Hi Bow tie

If your argument is valid, then it would be an argument against Capital Gains Tax itself.

"I bought my shares in CRH out my taxed income. I paid tax on the dividends. So I should not pay tax again on the capital gain when I sell them."

But double taxation is common.

I pay income tax on my income.
I paid VAT on the purchase of my home.
I pay property tax on the value of my home.



Again, a slightly different argument. It could be argued that that there should be a lifetime exemption of [€20,000] worth of capital gains. ( I feel another submission coming on...). And after that, 33% tax.

Brendan
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I'll lay my cards on the table- if the assets are for corporations, REITs etc. then there should possibly be a more punitive tax on profits.
If the asset is a PAYE worker pension, a PPR/farm left to children etc. then yes, the family/ social nature of the wealth should be left alone to distribute.
I think corporate Ireland has gone far enough at this stage, and personally inherently disagree with multiple punitive taxes until much of a persons cumulative wealth reverts to the state.
 
What you seem to miss Brendan is fairness has to be associated with any tax... CGT/CAT/Inheritance taxes are clearly unjust in this country... CGT allowance of €1280 is a clear example of this. With the demands that will be placed on the exchequer over the next couple of years, you might seek fairness between these taxes and income tax but most people on here would see no adjustment to income tax but cgt moving to the same level..
 
Bluefin said:
CGT/CAT/Inheritance taxes are clearly unjust in this country... CGT allowance of €1280 is a clear example of this.
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Why?

"justice" and "fairness" or subjective.

I might suggest that paying 52% tax on marginal income is very unjust. It certainly seems more unjust that someone paying no CGT just because they die.

Brendan
 
Bow tie said:
I'll lay my cards on the table- if the assets are for corporations, REITs etc. then there should possibly be a more punitive tax on profits.
If the asset is a PAYE worker pension, a PPR/farm left to children etc. then yes, the family/ social nature of the wealth should be left alone to distribute.
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The tax system should never ever be used as a tool to punish anyone. You do realise that you're probably advocating punitive treatment of your own pension fund?
 
T McGibney said:
The CGT code as presently constituted is riddled with injustices,
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Hi Tommy

You should make a pre-Budget submission on this to highlight them.

Most of the submissions are from representative bodies calling for less tax or more spending.

I am going to make a submission which will be overall tax neutral - calling for elimination of anomalies.

Brendan
 
Brendan Burgess said:
Hi Tommy

You should make a pre-Budget submission on this to highlight them.

Most of the submissions are from representative bodies calling for less tax or more spending.

I am going to make a submission which will be overall tax neutral - calling for elimination of anomalies.

Brendan
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You seriously think I've the time for that, Brendan? And others have been highlighting them for years.

Your suggestion will, if it's seen at all, will be welcomed by the "more tax" lobby. In Ireland, there is never such thing as a tax-neutral tax change.
 
Hi Tommy

All it takes is an email. You don't need to write to write a comprehensive review.

Even if you just pick the most glaring injustice and send an email to Minister@finance.gov.ie it will actually be considered.

If others make a similar suggestion, then it might prompt some action.

You have nothing to lose but the 5 minutes it takes you to write the email.

Brendan
 
It's ok Brendan, I don't intend to participate in and thus legitimise a charade. It's been obvious ever since Brian Cowen was Finance Minister that Revenue pretty much write each annual Finance Bill.
 
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