Rename capital gains tax and estate tax as wealth taxes

Patslatt1

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If under pressure to introduce wealth tax, moderate politicians should rename the estate tax and capital gains tax as wealth taxes. A wealth tax in Ireland would prove damaging to the economy because of dependence on foreign direct investment.
Yet hard left and cynical populist politicians hope to exploit envy, jealousy and economic ignorance of voters by proposing wealth taxes. Many voters who favour this tax may be unaware that Irish capital gains and estate taxes are among the highest in Europe. Sweden, the exemplar of democratic socialism, doesn't have an estate tax because of fears that it would disrupt family owned businesses.
A wealth tax is idiotic because of the extreme difficulty of valuing businesses, valuations that are a moving target requiring the services of investment bankers on six figure salaries; and the fact that a high proportion of businesses earn less than the yield on short government bonds given the concentration of profits among the top 10% and 1% of companies. Even a small local business is subject to hundreds of possible economic and business variables. The same problem arises in valuation for an estate tax but that is a once in a lifetime event and the tax can be high. Most governments who introduced wealth taxes abandoned them as unworkable.
 


Buchaill Dana

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You have excelled yourself. This is heroic and will win the zoo.
 

ShoutingIsLeadership

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I've a better idea, which will require little if any admin from these hard-pressed businesses you reference. Let's introduce a flat levy and call it a wealth tax - that'll keep both perspectives happy.

Well done, Pat.

Now, back to bashing public servants.
 

Buchaill Dana

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I've a better idea, which will require little if any admin from these hard-pressed businesses you reference. Let's introduce a flat levy and call it a wealth tax - that'll keep both perspectives happy.

Well done, Pat.

Now, back to bashing public servants.
There is no inheritance tax on a business.

There is on a property the business may own if it is a certain type of firm, but its almost as if Pat just typed up a brainfart with no research behind it.
 

paulp

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If under pressure to introduce wealth tax, moderate politicians should rename the estate tax and capital gains tax as wealth taxes. A wealth tax in Ireland would prove damaging to the economy because of dependence on foreign direct investment.
Yet hard left and cynical populist politicians hope to exploit envy, jealousy and economic ignorance of voters by proposing wealth taxes. Many voters who favour this tax may be unaware that Irish capital gains and estate taxes are among the highest in Europe. Sweden, the exemplar of democratic socialism, doesn't have an estate tax because of fears that it would disrupt family owned businesses.
A wealth tax is idiotic because of the extreme difficulty of valuing businesses, valuations that are a moving target requiring the services of investment bankers on six figure salaries; and the fact that a high proportion of businesses earn less than the yield on short government bonds given the concentration of profits among the top 10% and 1% of companies. Even a small local business is subject to hundreds of possible economic and business variables. The same problem arises in valuation for an estate tax but that is a once in a lifetime event and the tax can be high. Most governments who introduced wealth taxes abandoned them as unworkable.
If 2 kids are born today in Ireland, why should one be under an obligation to work for the other for all their life, due to the wealth or lack of wealth of their parents?
 

Patslatt1

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If 2 kids are born today in Ireland, why should one be under an obligation to work for the other for all their life, due to the wealth or lack of wealth of their parents?
Correct, that's why we have two wealth taxes that actually work as opposed to the proposed politically cynical,totally impractical wealth tax.
 

Patslatt1

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I've a better idea, which will require little if any admin from these hard-pressed businesses you reference. Let's introduce a flat levy and call it a wealth tax - that'll keep both perspectives happy.

Well done, Pat.

Now, back to bashing public servants.
Levy on property impossibly difficult to value?
 

Patslatt1

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There is no inheritance tax on a business.

There is on a property the business may own if it is a certain type of firm, but its almost as if Pat just typed up a brainfart with no research behind it.
There is capital gains tax on sale of a business. Hardd lefties want a wealth tax on business too.
 

Lumpy Talbot

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No
How do, Pat, I was just wondering where this week's edition was going to come from. However, let's explore this. We could have tax bands for the wealthy.

Ludicrous earnings from dancing/cooking/crochet or the internet +Dick category set at 50%.

Inherited ludicrous wealth = 70% tax on everything

Bono, Denis O'Brien, Ryan Tubridy = 95% rate on the basis that very few people actually like them.
 

Patslatt1

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How do, Pat, I was just wondering where this week's edition was going to come from. However, let's explore this. We could have tax bands for the wealthy.

Ludicrous earnings from dancing/cooking/crochet or the internet +Dick category set at 50%.

Inherited ludicrous wealth = 70% tax on everything

Bono, Denis O'Brien, Ryan Tubridy = 95% rate on the basis that very few people actually like them.
Social democrat Sweden and liberal left Canada don't impose estate taxes because they don't think the yield from the tax is worth the distuption to business. Still, it does seem a tad generous and likely to create an inheritance aristocracy.
 

Buchaill Dana

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There is capital gains tax on sale of a business. Hardd lefties want a wealth tax on business too.
You specifically said inheritance. Now its sale.
 

Buchaill Dana

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We will hire you instead of a team of investment bankers for the extremely complicated valuations involving hundreds of variables.
I have read this numerous times and it still makes absolutely no sense
 

Buchaill Dana

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Nasty hard lefties are crybabies!
I'm sure they are, but it doesn't change the fact you are all over the place complaning about something that doesn't happen.
 

paulp

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Correct, that's why we have two wealth taxes that actually work as opposed to the proposed politically cynical,totally impractical wealth tax.
They actually work? I thought you were also arguing that inheritance tax doesn't work, as demonstrated in Sweden and Canada (and Germany as well??).
I agree with the inheritance tax conundrum - in practice, if family companies spend 10 years focusing on how to minimize inheritance tax every generation, stalling investment etc. they impact to the economy isn't trivial.
I do believe Sweden's property tax is substantially higher than in Ireland, like ~5 times higher (I think). So your €2million home on Shrewsbury road will have a €22.5k annual tax bill - which is akin to a wealth tax - just Irish people are particularly exercised by the idea of a property tax.


Also, the really wealthy don't pay that much in tax. Bill Gates boasts he's paid $10Billion in tax, but he's worth $110Billion. How can you earn $120Billion and only pay $10Billion in tax??

Warren's wealth tax is a proposed 2% annual levy on household wealth above $50 million and an additional 1% tax on wealth above $1 billion.

Sounds reasonable to me.
 

Orbit v2

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I'm pretty sure there is no estate tax in Ireland. There is a capital acquisition tax which is not quite the same.
 

Patslatt1

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I'm pretty sure there is no estate tax in Ireland. There is a capital acquisition tax which is not quite the same.
If it quacks like a duck!
They actually work? I thought you were also arguing that inheritance tax doesn't work, as demonstrated in Sweden and Canada (and Germany as well??).
I agree with the inheritance tax conundrum - in practice, if family companies spend 10 years focusing on how to minimize inheritance tax every generation, stalling investment etc. they impact to the economy isn't trivial.
I do believe Sweden's property tax is substantially higher than in Ireland, like ~5 times higher (I think). So your €2million home on Shrewsbury road will have a €22.5k annual tax bill - which is akin to a wealth tax - just Irish people are particularly exercised by the idea of a property tax.


Also, the really wealthy don't pay that much in tax. Bill Gates boasts he's paid $10Billion in tax, but he's worth $110Billion. How can you earn $120Billion and only pay $10Billion in tax??

Warren's wealth tax is a proposed 2% annual levy on household wealth above $50 million and an additional 1% tax on wealth above $1 billion.

Sounds reasonable to me.
Warren's 2% plus 1% wealth tax proposal is either a politically cynical attempt to exploit envy, or plainly ignorant,or both. Given the extreme concentration of profits in the top 10% and 1% of US public corporations, since 1926 about 60% of them earn less than the return on short term government bonds and a lot less than the roughly 4 to 6% real return after inflation they should earn to compensate for business risk.
If it were possible to impose a tax higher than the subpar returns of the 60% of companies, they would cease investing and many would sell off assets at firesale prices. Unemployment would rocket. In practice, governments that have introduced wealth taxes are forced to accept extremely low valuations because of the these negative impacts and the immense costs of challenging annual valuations.
 

Orbit v2

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If it quacks like a duck!
There's one very big difference. In the UK the estate tax is levied on the estate itself before it is distributed. Whereas here CAT is levied on the people receiving the loot after it is distributed.
 


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