The tax burden on the average person in Ireland isn't actually all that high; IIRC you have to be earning over 120k or so before your total tax burden is high for Europe. It's heavily biased towards the top.
> truly obscene structures like deemed disposal (taking 41% of your _unrealized_ gains in ETF's).
The thing about deemed disposal is, it's essentially a wealth tax, but it's a fairly well-targeted one as they go; generally it only makes sense to invest in ETFs after you've maxed pension contributions, because the tax relief on pension contributions is so generous. Anyone buying ETFs outside of a pension can be assumed to be decently well-off.
The trouble with deemed disposal is that it is difficult to administer. It was originally introduced to deter a form of tax avoidance where people would accumulate money, and gains, in gross roll-up funds (ie non-dividend paying accumulating funds) administered by life companies, forever, then use other engineering to pass it onto descendants largely untaxed, thereby allowing very wealthy people to avoid _ever_ having to pay tax on gains. As such, it wasn't designed with ETFs in mind. People do I think _overstress_ the difficulty of administration a bit, but it could certainly be made easier (for instance by forcing brokers to administer it, as some other European countries do for _their_ weirder taxes).
One quirk is that even _distributing_ ETFs, both gains and dividends, are taxed under exit tax; in practice, this means that in most circumstances no-one should ever buy a distributing ETF (if you're taxed as if you're in a gross rollup product, might as well take advantage of the gross rollup), but, exit tax being lower than income+usc+prsi, there are edge cases for heavily dividend-oriented ETFs where this treatment is actually beneficial.
> Want to put €100 in to a retirement plan? Well, we're going to take €5, just because, and also 1% of your investment every year, all so we can underperform a simple index fund
Is this an occupational pension?! If so you should raise it with your employer; those fees are very, very bad in this day and age. If it's a PRSA just move to a proper provider. Most occupational pensions and PRSAs should allow some form of passive index investment. My entire pension is in a fund tracking the MSCI AWCI index; I also have ETFs which track the MSCI World index. They perform similarly, both pretty close to the indexes (which are slightly different; 'World', confusingly, is developed-world only); the fees on the pension provider fund are a little higher than the ETF, though.
> BUT! Your primary residence? You can sell that for 10 million more than you paid for it and not owe a cent in taxes.
Of course, then you'll have to buy somewhere else to live...
I think the early-naughties housing crisis _was_ fuelled by bad tax policy; there were at the time in practice quite a few incentives to invest in buy-to-let property. The current crisis, though, not so much; taxation of buy-to-let has been tightened up a lot, and small landlords are leaving the market.
Then, and particularly now, anyone who is investing in property in preference to fully funding a pension invested in equities wants their head examined. I'd argue more or less the same for anyone investing in property _after_ maxing the pension, tbh, but I think there's maybe _some_ room for argument there?
> truly obscene structures like deemed disposal (taking 41% of your _unrealized_ gains in ETF's).
The thing about deemed disposal is, it's essentially a wealth tax, but it's a fairly well-targeted one as they go; generally it only makes sense to invest in ETFs after you've maxed pension contributions, because the tax relief on pension contributions is so generous. Anyone buying ETFs outside of a pension can be assumed to be decently well-off.
The trouble with deemed disposal is that it is difficult to administer. It was originally introduced to deter a form of tax avoidance where people would accumulate money, and gains, in gross roll-up funds (ie non-dividend paying accumulating funds) administered by life companies, forever, then use other engineering to pass it onto descendants largely untaxed, thereby allowing very wealthy people to avoid _ever_ having to pay tax on gains. As such, it wasn't designed with ETFs in mind. People do I think _overstress_ the difficulty of administration a bit, but it could certainly be made easier (for instance by forcing brokers to administer it, as some other European countries do for _their_ weirder taxes).
One quirk is that even _distributing_ ETFs, both gains and dividends, are taxed under exit tax; in practice, this means that in most circumstances no-one should ever buy a distributing ETF (if you're taxed as if you're in a gross rollup product, might as well take advantage of the gross rollup), but, exit tax being lower than income+usc+prsi, there are edge cases for heavily dividend-oriented ETFs where this treatment is actually beneficial.
> Want to put €100 in to a retirement plan? Well, we're going to take €5, just because, and also 1% of your investment every year, all so we can underperform a simple index fund
Is this an occupational pension?! If so you should raise it with your employer; those fees are very, very bad in this day and age. If it's a PRSA just move to a proper provider. Most occupational pensions and PRSAs should allow some form of passive index investment. My entire pension is in a fund tracking the MSCI AWCI index; I also have ETFs which track the MSCI World index. They perform similarly, both pretty close to the indexes (which are slightly different; 'World', confusingly, is developed-world only); the fees on the pension provider fund are a little higher than the ETF, though.
> BUT! Your primary residence? You can sell that for 10 million more than you paid for it and not owe a cent in taxes.
Of course, then you'll have to buy somewhere else to live...
I think the early-naughties housing crisis _was_ fuelled by bad tax policy; there were at the time in practice quite a few incentives to invest in buy-to-let property. The current crisis, though, not so much; taxation of buy-to-let has been tightened up a lot, and small landlords are leaving the market.
Then, and particularly now, anyone who is investing in property in preference to fully funding a pension invested in equities wants their head examined. I'd argue more or less the same for anyone investing in property _after_ maxing the pension, tbh, but I think there's maybe _some_ room for argument there?