This has been a great discussion - thanks to all who joined in and I invite others to do so. Also, please tell your friends about the pod. Sharing it is the best compliment. Many thanks!
Recalling the previous discussions around whether we have a right of centre party at all in Ireland (I agree that we don’t really have one); can we say we have any truly orthodox left parties of significance?
There are very few parties which have policies for meaningful taxes on wealth in Ireland for example, including SF. They have a token gesture of taxing the extreme wealth of the very too of the pyramid (who can easily avoid it) but that’s about it. SF oppose Local Property Tax and water charges (i.e. the wealthier you are, the more water you use and the more you get taxed - wealth tax). Those polices are not very left wing policies either! So if they’re not left what are they?
SF are reactionary populists, and are willing to sail with the prevailing wind of public opinion. But it’s much easier to do that in opposition, where you sit back, see how the mob react, and then piggyback off their opinion passing it off as your own. You can’t do that when you’re in power setting policies first.
Also, in opposition you can pretend there’s an alternative utopia where the laws of realpolitik, with difficult choices and zero sum games, are suspended. For example, in opposition SF can waffle on about “housing models” but in power, regardless of how house building is funded, there’s only so much that the same finite construction resources in the state can produce and if that’s not enough in aggregate then supply is what it is and the waffle gets exposed for what it is.
Ireland has significant wealth taxes including Capital Gains Tax (at a high rate), Inheritance Tax (at a high rate and a low threshold), Property Tax and Gift Tax. Wealth is well taxed in Ireland by any international comparison and an attempt by SF or PBP to introduce a net wealth tax will drive massive wealth and investment outflows as such a tax did in France until Macron unwound it and replaced it with a property tax similar to Ireland's.
And all direct and indirect taxes in Ireland are high, especially at the marginal level.
Only standard Corporation Tax is, sensibly, at the low end, with a massive and increasing yield for Ireland.
Property tax is low in Ireland. I’m not sure what yardstick you’re measuring that against. For example UK council taxes are far higher, but their threshold for the 40% income tax rate is far higher also.
It’s difficult to benchmark capital gains tax internationally because it actually depends on the base, but in Ireland for example with entrepreneurial tax relief the CGT is just 10%.
Taxation of inheritance and gifts is controversial. My personal opinion (as a meritocrat) is that it’s unjustifiable to reduce taxation on generational handed down wealth at the expense of providing opportunity to those who wish to make the most of life - either the opportunity to earn more net income through one’s hard work or opportunities for education and development. For example, I don’t see why in an environment where half of all earnings over a messily 40k go to the state we would allocate tax cuts to help wealth get handed down to the children who didn’t earn it.
For economic health, productivity is everything in the long run, and work has to pay. Incentivising that needs to come at the expense of handing down wealth in my opinion.
I agree that income tax thresholds are way too low.
Property tax in Ireland is a house value tax when it should be a site value tax.
My issue with high inheritance tax is if I’ve earned money, paid high income tax on it and saved the balance, I’d prefer to give it to my kids and grandkids when I pass than give (too much of) it to the state to waste. Take health spending for example: adjusted for age profile, we have one of the most expensive health services in the world, but not the services to show for it. Vested interests strangle service delivery. By and large I don’t think politicians of any flavour will be able to fix this.
Firstly, SF don’t have any meaningful wealth taxes because they’re so unpopular. That’s why I don’t think they’re a typical left wing party.
With respect, a site value tax may as well be called a Dub tax. It’s madness to think you could build a mansion in the middle of nowhere and incur no property tax, whereas somebody with a one bed in the city centre incurs a tax bill.
Picking up on what you said it’s seems to me that you take issue with incurring tax again having paid income tax already. Is that fair to say? Presuming I’ve picked that up right (apologies if not) I would put it to you, umpteen taxes work that way, not just inheritance. If we held that principle, there would be no VAT revenue for example. There’s no shortage of precedent for this - so for me that’s not reason enough to not charge inheritance tax.
Although I appreciate you personally would prefer to pass your money down to the next generation, I personally would prefer not to be paying so much tax on my income. And I certainly take issue with giving tax concessions to wealthy retirees to pass down wealth to their family, who, with respect to them, didn’t have to graft to get that money. Why should a birthright be rewarded ahead of hard graft?
We have more retirees than ever in the state and that trend is continuing. They are expected to live longer every year, and that’s due to the state providing more and more healthcare, of greater sophistication at the cost rising by 4% above inflation. It’s not only unfair but completely unsustainable to place no taxation burden on retirees for that.
I suspect we may have to agree to differ on this.
Chris & Jim, I wonder if you have any thoughts on the topic.
Your points are well made, as is Mark’s comment about existing wealth taxes. The fact is that Ireland does have a pretty strict inheritance tax regime. The tax-free thresholds for passing on your estate are relatively low. SF’s purported love of wealth taxes and resistance to property taxes is pure populism. Ireland’s wealth is mostly tied up in property and pensions. The fat cat untaxed billionaire exists by exception only - taxing her would make no fiscal difference but might make shinners feel better about themselves. Property taxes should be higher and should be country-wide. I pay, I’m the UK, circa €4000 a year on a modest house far away from any large town or city. Most Irish people would be astonished at the level of property taxes in the US, Canada, France etc.
Yes, I hear regularly that ‘I’ve already paid tax and I don’t want to pay twice’. That flies in the face of the principles of taxation and how taxes actually work. Income is taxes multiple times. High earners pay marginal rates of tax well into the 70+% in Ireland once income taxes, VAT and excise duties are added in. 52% is only the true marginal rate if you don’t drive, drink, own a home or buy anything that attracts VAT.
There is now a very unhealthy symbiosis between Ireland’s very redistributive welfare system and it’s low productivity/low wage domestic economy. Everything affects everything else in the real world.
Thanks Sean but I’ll let my initial points rest there and opt out of this conversation. My key point is that SF are Far Left (read their manifesto and last year’s budget submission) and their economic policies if implemented will damage our economy. Over & out.
But these points are less relevant than the key point which is that we have plenty of wealth taxes here already and the introduction of a net wealth tax by SF will drive massive wealth and investment out of the country.
In order to establish a sovereign wealth fund you’d have to cut spending somewhere, which beggars the question: where? The realpolitik prevents this happening.
I think the only reason this was successful in Norway is the sheer scale of their oil wealth. Per capita it is only surpassed by the likes of Arab oil states. Our corporation tax or indeed the UK’s North Sea oil doesn’t compete with that. Per capita it’s higher than Saudi Arabia (according to my Google search).
In the coming decades, I can see generational politics becoming far more prominent, which may transcend the traditional left-to-right political thinking. As life expectancies continue to improve over time, each improvement is tacked onto the end of life which is the retirement phase - as opposed to each phase of one’s life increasing in proportion (e.g. by raising the retirement age!). Over the long term, medical inflation tends to run at around 4% above core inflation in Europe. So that’s medical costs soaring, with more retirees demanding medical care and not contributing towards the costs of it. Meanwhile, with security of home ownership and fixed income they tend to have, and their strength in numbers, leaves them free to elect any party that protects their interests at the expense of country’s economic health and prosperity of younger generations. I feel a storm brewing on this.
Your intergenerational point is right. It’s a mystery why the old tend to vote more than the young - the latter should vote to assert their interests over the former, something the old are very good at. Every extra penny received in excess of budget should now be saved. At the very least. Run budget surpluses until the recession hits.
This has been a great discussion - thanks to all who joined in and I invite others to do so. Also, please tell your friends about the pod. Sharing it is the best compliment. Many thanks!
You’ve got them pegged totally, Sean!!
You have to hand it to Marylou and crew ... they are getting “the old brigade” to do their dirty work for them!!
Or could FG/FF be Machiavellian enough to bring the country to its knees before SF get in and then watch them try and recover ???😂
Recalling the previous discussions around whether we have a right of centre party at all in Ireland (I agree that we don’t really have one); can we say we have any truly orthodox left parties of significance?
There are very few parties which have policies for meaningful taxes on wealth in Ireland for example, including SF. They have a token gesture of taxing the extreme wealth of the very too of the pyramid (who can easily avoid it) but that’s about it. SF oppose Local Property Tax and water charges (i.e. the wealthier you are, the more water you use and the more you get taxed - wealth tax). Those polices are not very left wing policies either! So if they’re not left what are they?
SF are reactionary populists, and are willing to sail with the prevailing wind of public opinion. But it’s much easier to do that in opposition, where you sit back, see how the mob react, and then piggyback off their opinion passing it off as your own. You can’t do that when you’re in power setting policies first.
Also, in opposition you can pretend there’s an alternative utopia where the laws of realpolitik, with difficult choices and zero sum games, are suspended. For example, in opposition SF can waffle on about “housing models” but in power, regardless of how house building is funded, there’s only so much that the same finite construction resources in the state can produce and if that’s not enough in aggregate then supply is what it is and the waffle gets exposed for what it is.
Ireland has significant wealth taxes including Capital Gains Tax (at a high rate), Inheritance Tax (at a high rate and a low threshold), Property Tax and Gift Tax. Wealth is well taxed in Ireland by any international comparison and an attempt by SF or PBP to introduce a net wealth tax will drive massive wealth and investment outflows as such a tax did in France until Macron unwound it and replaced it with a property tax similar to Ireland's.
And all direct and indirect taxes in Ireland are high, especially at the marginal level.
Only standard Corporation Tax is, sensibly, at the low end, with a massive and increasing yield for Ireland.
Property tax is low in Ireland. I’m not sure what yardstick you’re measuring that against. For example UK council taxes are far higher, but their threshold for the 40% income tax rate is far higher also.
It’s difficult to benchmark capital gains tax internationally because it actually depends on the base, but in Ireland for example with entrepreneurial tax relief the CGT is just 10%.
Taxation of inheritance and gifts is controversial. My personal opinion (as a meritocrat) is that it’s unjustifiable to reduce taxation on generational handed down wealth at the expense of providing opportunity to those who wish to make the most of life - either the opportunity to earn more net income through one’s hard work or opportunities for education and development. For example, I don’t see why in an environment where half of all earnings over a messily 40k go to the state we would allocate tax cuts to help wealth get handed down to the children who didn’t earn it.
For economic health, productivity is everything in the long run, and work has to pay. Incentivising that needs to come at the expense of handing down wealth in my opinion.
I agree that income tax thresholds are way too low.
Property tax in Ireland is a house value tax when it should be a site value tax.
My issue with high inheritance tax is if I’ve earned money, paid high income tax on it and saved the balance, I’d prefer to give it to my kids and grandkids when I pass than give (too much of) it to the state to waste. Take health spending for example: adjusted for age profile, we have one of the most expensive health services in the world, but not the services to show for it. Vested interests strangle service delivery. By and large I don’t think politicians of any flavour will be able to fix this.
Firstly, SF don’t have any meaningful wealth taxes because they’re so unpopular. That’s why I don’t think they’re a typical left wing party.
With respect, a site value tax may as well be called a Dub tax. It’s madness to think you could build a mansion in the middle of nowhere and incur no property tax, whereas somebody with a one bed in the city centre incurs a tax bill.
Picking up on what you said it’s seems to me that you take issue with incurring tax again having paid income tax already. Is that fair to say? Presuming I’ve picked that up right (apologies if not) I would put it to you, umpteen taxes work that way, not just inheritance. If we held that principle, there would be no VAT revenue for example. There’s no shortage of precedent for this - so for me that’s not reason enough to not charge inheritance tax.
Although I appreciate you personally would prefer to pass your money down to the next generation, I personally would prefer not to be paying so much tax on my income. And I certainly take issue with giving tax concessions to wealthy retirees to pass down wealth to their family, who, with respect to them, didn’t have to graft to get that money. Why should a birthright be rewarded ahead of hard graft?
We have more retirees than ever in the state and that trend is continuing. They are expected to live longer every year, and that’s due to the state providing more and more healthcare, of greater sophistication at the cost rising by 4% above inflation. It’s not only unfair but completely unsustainable to place no taxation burden on retirees for that.
I suspect we may have to agree to differ on this.
Chris & Jim, I wonder if you have any thoughts on the topic.
Your points are well made, as is Mark’s comment about existing wealth taxes. The fact is that Ireland does have a pretty strict inheritance tax regime. The tax-free thresholds for passing on your estate are relatively low. SF’s purported love of wealth taxes and resistance to property taxes is pure populism. Ireland’s wealth is mostly tied up in property and pensions. The fat cat untaxed billionaire exists by exception only - taxing her would make no fiscal difference but might make shinners feel better about themselves. Property taxes should be higher and should be country-wide. I pay, I’m the UK, circa €4000 a year on a modest house far away from any large town or city. Most Irish people would be astonished at the level of property taxes in the US, Canada, France etc.
Yes, I hear regularly that ‘I’ve already paid tax and I don’t want to pay twice’. That flies in the face of the principles of taxation and how taxes actually work. Income is taxes multiple times. High earners pay marginal rates of tax well into the 70+% in Ireland once income taxes, VAT and excise duties are added in. 52% is only the true marginal rate if you don’t drive, drink, own a home or buy anything that attracts VAT.
There is now a very unhealthy symbiosis between Ireland’s very redistributive welfare system and it’s low productivity/low wage domestic economy. Everything affects everything else in the real world.
Thanks Sean but I’ll let my initial points rest there and opt out of this conversation. My key point is that SF are Far Left (read their manifesto and last year’s budget submission) and their economic policies if implemented will damage our economy. Over & out.
But these points are less relevant than the key point which is that we have plenty of wealth taxes here already and the introduction of a net wealth tax by SF will drive massive wealth and investment out of the country.
In order to establish a sovereign wealth fund you’d have to cut spending somewhere, which beggars the question: where? The realpolitik prevents this happening.
I think the only reason this was successful in Norway is the sheer scale of their oil wealth. Per capita it is only surpassed by the likes of Arab oil states. Our corporation tax or indeed the UK’s North Sea oil doesn’t compete with that. Per capita it’s higher than Saudi Arabia (according to my Google search).
In the coming decades, I can see generational politics becoming far more prominent, which may transcend the traditional left-to-right political thinking. As life expectancies continue to improve over time, each improvement is tacked onto the end of life which is the retirement phase - as opposed to each phase of one’s life increasing in proportion (e.g. by raising the retirement age!). Over the long term, medical inflation tends to run at around 4% above core inflation in Europe. So that’s medical costs soaring, with more retirees demanding medical care and not contributing towards the costs of it. Meanwhile, with security of home ownership and fixed income they tend to have, and their strength in numbers, leaves them free to elect any party that protects their interests at the expense of country’s economic health and prosperity of younger generations. I feel a storm brewing on this.
Your intergenerational point is right. It’s a mystery why the old tend to vote more than the young - the latter should vote to assert their interests over the former, something the old are very good at. Every extra penny received in excess of budget should now be saved. At the very least. Run budget surpluses until the recession hits.
Downloaded for plane to Rhodes.analysys to follow👍😊