[Article] Irish tax burden is lowest in EU

Victor

Hmmmm, so much for this government being 'pro-work', "direct taxes in 2002 ..... providing 40.8 per cent of the overall burden", but admittedly at the same time social security contributions are second lowest in the EU. In essence, social security (or lack thereof) is subsidising the rich.

http://home.eircom.net/content/irelandcom/topstories/3517435?view=Eircomnet

Irish tax burden is lowest in EU
From:ireland.com
Saturday, 3rd July, 2004

The Republic has retained the mantle of lowest-taxed state in the EU, even within an enlarged 25-member Union.

A new analysis from Eurostat shows that, in 2002, the Republic's overall tax burden was the equivalent of 28.6 per cent of gross domestic product (GDP).

This compared to an average EU-25 tax-to-GDP ratio of 40.4 per cent in the same year. Sweden had the highest ratio of 50.6 per cent.

Apart from the Republic, Lithuania boasted the lowest ratio of 28.8 per cent.

Even though the Republic had the lowest overall tax burden, it was shown to have levied the heaviest proportion of indirect taxes of all the then EU and accession states.

Eurostat found that indirect taxes - which include VAT and excise duties - represented 43.7 per cent of the overall tax burden in Ireland in 2002. For the 25 EU states as a whole, the equivalent figure was 34.8 per cent, while in the 15 member-states in 2002 indirect taxes accounted for 34.6 per cent of the tax burden.

The Republic also had a relatively high level of direct taxes in 2002, with business and personal taxation providing 40.8 per cent of the overall burden. The EU-25 average on this measure was 33.1 per cent, with Poland at the bottom of the table with 18.7 per cent.

The level of social security contributions in the Republic was fairly low too, with such payments representing just 15.5 per cent of the overall tax burden. This compared to 32.1 per cent for the EU-25 and was the second-lowest level recorded.

The study shows that, in the EU-15 as a whole, labour taxes were the largest source of tax revenue in 2002, contributing about 50 per cent of total tax receipts. Taxes on capital, meanwhile accounted for about 20 per cent of the total, while consumption taxes provided the remainder. The effective tax rate on labour across the 15 EU states stood at 36.3 per cent in 2002, down from 36.8 per cent in the previous year. In the Republic, this rate was 25.9 per cent, down from 27.5 per cent.

On capital, the effective tax rate in the Republic in 2002 was 32 per cent, compared to 28.4 per cent for the EU-15.

Figures for tax rates for 2004, meanwhile, show that the Republic continues to apply the lowest corporation tax of the entire EU with a rate of 12.5 per cent. The highest corporation tax rate of 38.3 per cent is levied in Denmark.

spongebob

This hoary old chestnut means nothing Victor.

Ireland is the Only EU country whose GDP is higher than its GNP . If the league tables were done showing tax take vs GNP we would be mid table or Average . Someone did it once but I can not find the figures.

Our civil service is large (we carry health where other countries use insurance and keep it out of the public sector that way) and our cost controls are dismal....the PD ministers are as bad as the FF mob at hiring useless consultants at exorbitant rates to advise on feck all.

Stats like that one you quoted allow Harney and Parlon to waste lots of OUR money on THEIR mates while pretending all is tickety boo.

M

AngelofFire

What sickens me most is that the government are willing to cut funds from the likes of CE employment schemes and 3rd level education just to keep it the lowest. if they government is short of money there is still plenty of scope to raise taxation without putting too big a burden on the taxpayer.

Cork

Originally posted by AngelofFire
if they government is short of money there is still plenty of scope to raise taxation without putting too big a burden on the taxpayer.

We have no third level fees.

High tax rates is a disincentive to work. This government has given people the freedom to spend they money that they earn.

Before, Charlie McCreevy people paid taxes thru the nose for poor & inefficent public services.

People now have the power to spend their hard earned money themselves.

therecklessone

Originally posted by Cork


Before, Charlie McCreevy people paid taxes thru the nose for poor & inefficent public services.

I wish I was one of these Charlie McCreevy people. Are they like Pan's People?

Originally posted by Cork
This government has given people the freedom to spend they money that they earn.

People now have the power to spend their hard earned money themselves.

Low income tax/high indirect tax regimes affect those on or below the average industrial wage to a greater extent. This government's taxation policy is far from progressive.

And I say that as somebody who earns well above the average industrial wage.

Cork

Charlie MCCreevy has brought down both the standard and high tax rates. He has transformed the tax system by introducing tax credits. This has brought fairness into the whole tax system. Prior to this, people on higher incomes got better tax advantages from personal allowances than those paying tax at the standard rate.

The Irish indirect tax rates don't vary much from rates that our EU neighbours pay. We don't pay vat on food - let us not forget.

Sand

This government's taxation policy is far from progressive.

So? Ive never seen the attraction of progressive taxation as a policy objective to be honest. Even under flat taxation, someone earning more will be paying more tax than someone earning less. Thats as progressive as it needs to be imo.

And I say that as somebody who earns well above the average industrial wage.

Give more to charity then, or campaign for voluntary citizen contributions to the exchequer if you feel youre not paying enough tax.

therecklessone

Originally posted by Cork


The Irish indirect tax rates don't vary much from rates that our EU neighbours pay. We don't pay vat on food - let us not forget.

Did you even read Victor's post? Here's a brief re-post for your own sake:

Even though the Republic had the lowest overall tax burden, it was shown to have levied the heaviest proportion of indirect taxes of all the then EU and accession states.

Eurostat found that indirect taxes - which include VAT and excise duties - represented 43.7 per cent of the overall tax burden in Ireland in 2002. For the 25 EU states as a whole, the equivalent figure was 34.8 per cent, while in the 15 member-states in 2002 indirect taxes accounted for 34.6 per cent of the tax burden.

therecklessone

Originally posted by Sand
Even under flat taxation, someone earning more will be paying more tax than someone earning less. Thats as progressive as it needs to be imo.

Not in the half-arsed way its implemented here. Lowering direct taxation while increasing indirect taxation to balance the books has a far greater effect on those on lower incomes.

Originally posted by Sand
Give more to charity then, or campaign for voluntary citizen contributions to the exchequer if you feel youre not paying enough tax.

Ooh, hark at her...

I do my bit dahling.

Cork

Originally posted by therecklessone
Lowering direct taxation while increasing indirect taxation to balance the books has a far greater effect on those on lower incomes.

Indirect tax has increased by one or two points. Do you mean exise dutys on fags - which are used more by people on lower incomes?

Direct Income Tax Rates have been cut considerably.

It has acted as a incentive to work. When people had to pay 50 plus % in taxes - there was no incentive to work.

therecklessone

Originally posted by Cork


It has acted as a incentive to work. When people had to pay 50 plus % in taxes - there was no incentive to work.

Funny that, I thought it was the lack of jobs acted as a disincentive to work myself, but then I distinctly remember both my parents working because even with 50%+ income tax they still had a family to feed and bills to pay.

Cork

Originally posted by therecklessone
Funny that, I thought it was the lack of jobs acted as a disincentive to work myself, but then I distinctly remember both my parents working because even with 50%+ income tax they still had a family to feed and bills to pay.

They had no choice but to pay high tax rates. Nodays the government is putting more into peoples pockets.

therecklessone

Originally posted by Cork
Indirect tax has increased by one or two points. Do you mean exise dutys on fags - which are used more by people on lower incomes?

No, I mean everything from increases in ATM/Laser/Credit Card stamp duty to increases in local authority service charges.

I mean increases in local authority development levies which are paid by building firms but are passed on to house buyers, many of whom are first-time buyers who cannot avail of the now defunct first time buyers grant.

I mean increases in car tax, and the increasing use of road tolls.

I mean increases in the TV license fee.

I mean perpetual increases in VHI levies (voluntary, but you'd be better off having it 'cos of the state of our health service)

Need I go on?

therecklessone

Originally posted by Cork
Nodays the government is putting more into peoples pockets.

No Cork, thats not how it works.

Your employer puts that money in your pocket, in return for your labour. Unless of course you're a civil servant, in that case you're right...

Do I really need to point out that the government takes less from one pocket, but every time you put your hand in the other pocket there's Charlie's grubby fingers pinching 21%?

therecklessone

Originally posted by Cork
They had no choice but to pay high tax rates.

So high taxes aren't a disincentive to work then? Or had they another "choice"?

Cork

RTE licence Fee - RTE must pay its "stars".

People like Joe Duffy and Gerry Ryan have to be paid.

If it was up to me - I'd privatise RTE and abolish the licence fee.

VHI increases - Shop around - Bupa is cheaper.

Bin Charges - Recycle, Reduce and Re-use. If you don't - why should the state pay to cart your garbage away?

Credit Card Stamp Duty - I don't even think FF brought in this tax.

People have more disposable income today. Kids are walking around with mobile phones. I remember when I was at school - ringing home via a payphone.

Tax Reductions have benefited all workers.

Credit where Credit is due.

bonkey

Originally posted by Cork
Credit where Credit is due.

But equally : criticism where criticism is due, Cork - a concept you seem unable to apply evenhandedly.

jc

halkar

What planet are you on Cork?
Tax tax tax is everywhere. Not that I mind paying if I can see something coming out of it but while your Mr. Greedy gave us by spoon took back by ladle last few years. Sure he knocked of few %s of income tax while introducing many stupid taxes and abolishing usefull things like first time buyers grant and I think he was thinking like you do.
Our nation has more dept to banks now then ever.

therecklessone

Originally posted by Cork

Bin Charges - Recycle, Reduce and Re-use. If you don't - why should the state pay to cart your garbage away?

Some local authorities charge a set fee, regardless of how much you produce. But nice way to try and change the subject.

Originally posted by Cork
Credit Card Stamp Duty - I don't even think FF brought in this tax.

I didn't say they had. Note the word increases in the relevant post. They have increased it. Would you at least accept that?

Originally posted by Cork
Tax Reductions have benefited all workers.

Some far more than others.

I do find myself wondering Cork, how it is that you are incapable of seperating the standard government guff from the facts. People like yourself are a godsend to this administration.

AngelofFire

Originally posted by Cork




Before, Charlie McCreevy people paid taxes thru the nose for poor & inefficent public services.

People now have the power to spend their hard earned money themselves.

Actually in Denmark and sweeden more people have more disposable income as essential services such as healthcare,dental care and childcare are already paid for by their taxes thus having more income to splash out on leisure etc.Ok the taxation is consderabley higher than ours but at least the services are good.

RainyDay

Originally posted by Cork
Credit Card Stamp Duty - I don't even think FF brought in this tax.

They did increase it from €15 to €40 and changed the rules to make it payable for every card held during the year, instead of every card held on 1st April - which creates a big disencentive to shopping around for better value cards. So much for Mata Harney's 'shop around' advice.

Originally posted by Cork
High tax rates is a disincentive to work. This government has given people the freedom to spend they money that they earn.

Before, Charlie McCreevy people paid taxes thru the nose for poor & inefficent public services.

People now have the power to spend their hard earned money themselves.

Nice theory - unfortunately it collapses when you realise that everyone does NOT have equal access to employment, generally because everyone does NOT have equal access to decent education.

DublinWriter

Originally posted by Cork
The Irish indirect tax rates don't vary much from rates that our EU neighbours pay. We don't pay vat on food - let us not forget.

...yes, but they don't pay punative VRT on imported cars, or added duty on spirts. We also have the higest VAT rate in Europe (17% in the UK). The UK don't pay VAT on food either, and they don't have to pay tens of thousands in stamp duty when they buy a house.

FF being the party of low taxation = Big Fat Ugly Lie.

About 70% of PAYE workers are now caught in the high tax band.

I pay about €550 a year to BUPA *and * I pay PRSI in the thousands. What's that all about?

My French, Belgian and German friends might pay slightly higher tax, but they are not also shelling out thousands of Euro on private health insurance for their families and they also know that if they or theirs get ill that they won't be stuck on a hospital trolley for days.

..and BUPA are only marginally cheaper and usually hike up their premiums a few months after the VHI do. Shop around me a*se. What a waste of €6million that ad-campaign was.

Cork, the only shopping around that we'll be doing is for a new government in 2007.

bonkey

Originally posted by DublinWriter
I pay about €550 a year to BUPA *and * I pay PRSI in the thousands. What's that all about?

My French, Belgian and German friends might pay slightly higher tax, but they are not also shelling out thousands of Euro on private health insurance for their families and they also know that if they or theirs get ill that they won't be stuck on a hospital trolley for days.

Just as a counterpoint...

here in Switzerland, we have privately-funded health insurance, which is mandatory. So you can shop around, but you must have health insurance.

I pay a monthly cost of just over €150 for this, and it doesn't cover dental or optical, the first €350 per year, nor certain costs like anasthetics in operations, and some other side-costs.

On the plus side....the concept of a waiting list doesn't exist. A mate of mine went to a doc last year with a hip problem which had been niggling him for years. His doc told him to go schedule an MRI with the local hospital for whenever suited him. Subsequent to that, there was a need for an op, which was again to be scheduled to suit the person needing it.

The biggest delay was in getting his work insurance and personal insurance companies to decide between them who was footing the bill.

Having said all that...I recall reading last summer that the Irish now pay more per capita on health-care than any other nation in Europe.

Its not just a question of how much you spend. Its a question of how it is spent. Saying we pay a comparatively low total is meaningless if we're not getting value from what we pay, or - as some have pointed out - if its kept low by artificial means.

jc

Meh

Originally posted by DublinWriter
We also have the higest VAT rate in Europe (17% in the UK).

Incorrect. Belgium, the Czech Republic, Denmark, Hungary, Finland and Sweden all have VAT rates equal to or higher than Ireland. http://europa.eu.int/comm/taxation_customs/publications/info_doc/info_doc.htm#VAT

The UK don't pay VAT on food either, and they don't have to pay tens of thousands in stamp duty when they buy a house.

Uh, the UK has stamp duty too. http://www.inlandrevenue.gov.uk/so/current_sdlt_rates.htm.
Plus they have to pay thousands of pounds in council tax every year. Swings and roundabouts.

ishmael whale

Originally posted by Muck
Our civil service is large (we carry health where other countries use insurance and keep it out of the public sector that way) and our cost controls are dismal....the PD ministers are as bad as the FF mob at hiring useless consultants at exorbitant rates to advise on feck all.

Agreed, and they are proposing to make the public sector more inefficient by scattering offices about the country for no particular reason.

http://www.finance.gov.ie/viewdoc.asp?DocID=2270

FWIW, if anyone’s interested, in the first six months of this year the Government raised 16.5 billion in tax.

VAT 5.3 billion
Income tax 4.9 billion (mostly PAYE)
Corporation Tax 2.4 billion
Excise 2.3 billion (vehicles, fuel, alcohol, tobacco)
Stamp duty .9 billion (presumably mostly property related)

So, in summary, the government takes money chiefly from consumers and employees, with additional taxes on those that smoke and drink, and supplements it with contributions from companies, motorists and property buyers.

They spent 14.7 billion on services so far this year and about 1.5 billion on servicing national debt. Expenditure is more diversified, but the five main areas accounting for three quarters of all expenditure are:

Health 4.3 billion
Education 3 billion
Social Welfare 2.9 billion
Justice .9 billion
Transport .7 billion

What we're paying most for is health. Whether we're getting what's been paid for is another matter.