Great Moments in International Taxation – By Dan Mitchell.
Back in 2013, I wrote about a gay guy adopting his long-time lover in order to escape the evil and pernicious death tax. I speculated that this would cause confusion and angst in some circles.
- Traditional leftists would want to applaud the adoption because of their support for gay rights, but they would be conflicted because of their support for the death tax.
- Traditional conservatives, by contrast, would dislike the way adoption laws were being used, but presumably like the fact that the reach of the death tax was being curtailed.
Now we have a somewhat similar example of the death tax leading people to take an unusual step.
Here are some excerpts from a report in the Belfast Telegraph.
Two best friends in the Republic of Ireland who have decided to get married to avoid paying inheritance tax… Michael O’Sullivan, a father of three,
is set to marry his friend Matt Murphy in January. …Friends for almost 30 years they have made the decision so that Michael will inherit Matt’s home in Stoneybatter, Dublin when he dies. …Neither man is gay and say they are like brothers.
Not only will this save them money, it will be beneficial for other taxpayers as well.
Both men say they are currently on a small pension and say their idea is “saving the State money”. Michael said: “We found out from a friend of mine that she is paying €1,760 a week to stay in a nursing home, okay I could put Matt in a nursing home and then people would be paying their tax to look after him in the nursing home. “I don’t have much money and Matt can’t pay me to look after him but we tried to find out how much it would cost for a 24-hour care, you’re talking about a couple of thousand a week. “We are saving the State money.”
By the way, this story also may be an indirect example of excessive regulation.
It seems the guys could have received a subsidy from the government so that Michael could take care of Matt, but that would have triggered so much hassle and red tape that it wasn’t worth it.
“We didn’t go for the Carer’s Allowance because Matt would have to be examined, the house would have to be looked at.
Amen. Nobody welcomes a bunch of nosy bureaucrats poking through their life.
Now let’s zoom out and consider some broader policy implications.
I like and defend Ireland’s policy of aggressively using low corporate taxes to attract jobs and investment, but that doesn’t mean other policies in the country are favorable for taxpayers.
Indeed, there’s plenty of evidence that other taxes in that country are too high and it’s quite clear that the burden of government spending also is excessive.
The story doesn’t give details about the extent of the death tax, but it obviously must be punitive if two straight guys are marrying each other to dodge the levy.
In any event, it belongs in my collection of odd moments in international taxation.
- Bizarrely foolish tax policies, such as the German tax on online coffee sales that loses money for government.
- Heartening protests against government greed, such as Irish taxpayers refusing to pay a housing levy.
- Quirky examples of tax avoidance in Ukraine, Finland, Scotland, and Catalonia.
- Inexplicable taxation rules, such as porn being taxed at lower rates than high culture in Spain.
Strange forms of tax enforcement, such as transgender tax collectors in Pakistan.- Governments get very creative, such as a German plan to tax prostitutes with parking meters.
- Clever forms of tax avoidance, such as the Spanish theatre that gave free passes to patrons who bought lightly taxed carrots.
- X-rated tax protests, such as the brothel owner in Austria who provided free “services” to lower his tax bill.
It doesn’t really belong in this collection, but I think the oddest tax story I’ve ever read is that a bureaucrat from the tax-loving European Commission criticized France for excessive taxation.