Marginal and effective tax rates

optocynic

dearg lady wrote: »

I'd agree with a lot of what you say, however I think some people feel annoyed as it's often spouted that high earners shouldn't be taxed anymore as they pay a total of 53% of marginal pay over to the government when in fact this is not always the case. they are of course completely legitimate, but that doens't mean we can't take issue with them! I do think now would be a good time for the government to reduce the relief available under some of these schemes

I'm afraid you are very wrong!
Now is NOT the time to take money from the successful to subsidise a bloated and overpaid Public Sector!
Now is the time for the money of the successful to be spent, preferrably in this country!

brianthebard

optocynic wrote: »

How many ways do the whingers in the unions want to spout this hate-mongering jealousy.

Let's keep it simple.. If someone on 100k pays 'only' 25%... isn't that 25k a year?
How is that not enough?

How many ways can the apologists for the rich in this country excuse the lies spoken about them? We could do that all day.

Let's keep it simple. If a minister claims people are paying 53% tax and they are paying half of that or less, should we believe the minister? And if we are told we cannot raise tax levels because people are paying 53% already,but it turns out they are not, why is raising taxes thus not allowed? Is it cause of hate-mongering? :rolleyes:

optocynic

brianthebard wrote: »

How many ways can the apologists for the rich in this country excuse the lies spoken about them? We could do that all day.

Let's keep it simple. If a minister claims people are paying 53% tax and they are paying half of that or less, should we believe the minister? And if we are told we cannot raise tax levels because people are paying 53% already,but it turns out they are not, why is raising taxes thus not allowed? Is it cause of hate-mongering? :rolleyes:

You lost me!
I agree that there are lies being told about rates being paid by the 'rich'

But, answer my question.. is 25k a year not enough to pay for the public services we supposedly consume? Never mind that we usually pay in other direct ways for these services

Garbage = Bin tags,
Roads = motor tax,

brianthebard

What is 'enough'? If 54% or 42% or whatever is the top rate of tax is deemed to be 'enough' then surely these people should be paying that and not just what they deem to be 'enough'? This topic isn't about public services its about how we talk about tax. The minister wants to tell us what the marginal tax rate is an ignore the effective tax rate, I've seen plenty of users here do the same as an excuse for not raising taxes, when in reality the people they are defending aren't paying half the rate claimed.

MaceFace

brianthebard wrote: »

How many ways can the apologists for the rich in this country excuse the lies spoken about them? We could do that all day.

Let's keep it simple. If a minister claims people are paying 53% tax and they are paying half of that or less, should we believe the minister? And if we are told we cannot raise tax levels because people are paying 53% already,but it turns out they are not, why is raising taxes thus not allowed? Is it cause of hate-mongering? :rolleyes:

I think you are being to critical and taking things slightly out of context due to the simplication of the argument.
Of course it is wrong that once you reach a certain treshhold that your tax bill can be substantially reduced, but that is not the full picture.

The ways in which these people are reducing their tax bills is important to understand. If they are offsetting tax by building say conference centers or sports stadium, then that is good as it leads to job creation and cultural enrichment. This all leads to more tax take overall which is important.

If we were to remove all tax breaks, then I wonder would these people either decide to live like us normal PAYE folk, or would they go elsewhere.

This thread actually demonstrates the problems we have on boards.ie - the true villians don't actually participate in discussions here.
Normal PS workers, bank employees, auctioneers, PAYE workers on great pay (~100k) are not the ones to blame and do none of us deserved to be punished.
The ones who are to blame are the people who flipped property just to make a profit, the politicians who failed to appoint a proper regulator and indeed the regulator himself.
As my mother used to tell me - Lifes not fair!

brianthebard

MaceFace wrote: »

The ones who are to blame are the people who flipped property just to make a profit, the politicians who failed to appoint a proper regulator and indeed the regulator himself.
As my mother used to tell me - Lifes not fair!

These are the people in the sort of wage bracket that the survey dealt with. As for blame, I'm not looking to blame anyone. Its simply about two different ways of talking about tax, and which one people use to disguise certain issues. If I believe for a minute that these uber-rich are paying as much or more money through different schemes as would add up to a 53% tax rate (which I do not believe) then that would be fine, if it was stated as such. Others would have us believe that these people pay 53% before ever getting their hands on a cent and then give more money out of generosity, that's not whats happening.

optocynic

brianthebard wrote: »

What is 'enough'? If 54% or 42% or whatever is the top rate of tax is deemed to be 'enough' then surely these people should be paying that and not just what they deem to be 'enough'? This topic isn't about public services its about how we talk about tax. The minister wants to tell us what the marginal tax rate is an ignore the effective tax rate, I've seen plenty of users here do the same as an excuse for not raising taxes, when in reality the people they are defending aren't paying half the rate claimed.

That is all semantics. I don't care about what the idiots in the Dail say!

I ask for the third time.

Is 25k a year not enough for a person on 100k to pay in tax?

brianthebard

optocynic wrote: »

That is all semantics. I don't care about what the idiots in the Dail say!

I ask for the third time.

Is 25k a year not enough for a person on 100k to pay in tax?

If you don't want to talk about semantics you probably shouldn't have looked at this thread. You can ask as many times as you want, but you'll have to tell me how you define 'enough tax' first.

optocynic

brianthebard wrote: »

If you don't want to talk about semantics you probably shouldn't have looked at this thread. You can ask as many times as you want, but you'll have to tell me how you define 'enough tax' first.

OK, I define 'enough tax' as simply paying for the services you consume.

But since I was asking for your honest opinion on the figures I gave, and you know that your response will highlight the flaws in your stance.. you have refused to answer.

I expected more!

ei.sdraob

optocynic wrote: »

That is all semantics. I don't care about what the idiots in the Dail say!

I ask for the third time.

Is 25k a year not enough for a person on 100k to pay in tax?

somebody on 100k would pay close to 50-60% in direct income taxes

the remainder is stealth taxed

optocynic

ei.sdraob wrote: »

somebody on 100k would pay close to 50-60% in direct income taxes

the remainder is stealth taxed

Indeed it is a much greater number than 25%... that is true.

But I still wanted an honest answer/opinion to my question...

Scofflaw

optocynic, you've already received a warning about the style of your posts. Let me reiterate it for you - your posting style is currently mildly aggressive argument without substance and aimed at posters rather than content - if that doesn't change, you'll be out of the forum.

moderately,
Scofflaw

optocynic

Scofflaw wrote: »

optocynic, you've already received a warning about the style of your posts. Let me reiterate it for you - your posting style is currently mildly aggressive argument without substance and aimed at posters rather than content - if that doesn't change, you'll be out of the forum.

moderately,
Scofflaw

Mildyly aggressive arguement... sure I can see that.

As for content, my posts simply question the content that others have. Is that not what debate is for?

Zynks

brianthebard wrote: »

What is 'enough'? If 54% or 42% or whatever is the top rate of tax is deemed to be 'enough' then surely these people should be paying that and not just what they deem to be 'enough'? ...

Will something like this do?

Permabear

This post has been deleted.

Scofflaw

optocynic wrote: »

Mildyly aggressive arguement... sure I can see that.

As for content, my posts simply question the content that others have. Is that not what debate is for?

No, you're supposed to add content yourself, rather than just saying you don't believe other people, or think they're being dishonest. Your contribution tends to consist of saying "yeah right" in a few more words - the difference is that between 'argument' and 'discussion'.

moderately,
Scofflaw

optocynic

Scofflaw wrote: »

No, you're supposed to add content yourself, rather than just saying you don't believe other people, or think they're being dishonest. Your contribution tends to consist of saying "yeah right" in a few more words - the difference is that between 'argument' and 'discussion'.

moderately,
Scofflaw

I'm terribly sorry, but I disagree with you. While I may not spend my whole day searching for facts and figures, I do give my honest opinion on things, and this will lead me to disagree with people. They, in turn, are free to disagree with me too. Perhaps you don't agree with me either, that's fine.

And in this instance, with the other moderator, I simply asked for his opinion on something. Yes, I had the motive of highlighting flaws in his points with his answer.

If I am ever wrong, people should tell me. If they disagree with me, they should also tell me, and tell me why. But to ask for discussion on issues as sensitive as on these boards is a bit hopeful. It will inevitably get people's temperatures to rise.

optocynic

donegalfella wrote: »

This post has been deleted.

Absolutely. I agree. What is an above average wage now days anyway? I have heard that any household earning 100k is considered rich. OK. I fall into that bracket, but myself and my wife can't have a second child, due to the creche fees. Well, we could have one, but it would be VERY tight.

So, is it fair to tax us to the extent that the unions are proposing?
I don't think so.

Scofflaw

optocynic wrote: »

I'm terribly sorry, but I disagree with you. While I may not spend my whole day searching for facts and figures, I do give my honest opinion on things, and this will lead me to disagree with people. They, in turn, are free to disagree with me too. Perhaps you don't agree with me either, that's fine.

And in this instance, with the other moderator, I simply asked for his opinion on something. Yes, I had the motive of highlighting flaws in his points with his answer.

If I am ever wrong, people should tell me. If they disagree with me, they should also tell me, and tell me why. But to ask for discussion on issues as sensitive as on these boards is a bit hopeful. It will inevitably get people's temperatures to rise.

Well, again, there we are - now you're simply arguing with me. And I'm not actually open to you arguing on this point - I am telling you how it has to be.

To make that point, take a couple of days off and read the Charter.

moderately,
Scofflaw

brianthebard

Zynks wrote: »

Will something like this do?

I don't understand what you're trying to prove here. Your picture doesn't appear to be showing up in your post, shame that.

Beasty

There seems to be some confusion here!

The analysis in question is available here:
http://www.finance.gov.ie/documents/publications/reports/2009/analytaxrestrict09.pdf

It simply covers all (not a sample) of the individuals who were impacted by the restrictions imposed in the 2006 and 2007 Finance Acts. The changes in those acts introduced limitations on tax relief available to those high earners who chose to take advantage of tax reliefs, to ensure they still paid an overall tax rate of approximatley 20%. for those earning over €500k per year in total.

Only 439 individuals had claimed reliefs that were affected by the new rules in 2007. 214 of them earned over €500k, and their effective tax rate was 20.08% - ie the intention of the new legislation was met

Others, earning up to €500k who also took advantage of these schemes, paid an overall effective tax rate of 13.63%.

The analysis really does not tell us anything else. In particular it makes no statement of those (presumably many thousands) of individuals who may be considered "high-earners", but did not avail themselves of these reliefs. In their cases, the effective tax rate (ignoring PRSI and Health levies) would have been approaching 40%.

The basic message is there are relatively small number of individuals who earn these amounts that take advantage of these reliefs, and this has been partly clawed back by the new legislation. However there are likely to me a much larger number of individuals who earn these amounts who take no advantage of these reliefs, and contributed (in 2007) approaching 40% of their total income to the government in the form of tax (and additional amounts of PRSI and health levies). This second category of individuals are contributing 50%+ of their income (including levies) in the current year.

brianthebard

I'm not saying you're wrong Beasty but the blog where I first came across the document called it a survey, and the document itself doesn't seem to clearly state whether it is a survey or all of the people that were impacted as you say. Do you have another link from the dept of finance perhaps that would clarify?

Alcatel

There are two simple realities to bear in mind here:

1. The income from taxing the relatively few 'uber rich' who get away with tax reliefs etc, will not plug the gap. Not nearly. In business I focus my attention on the quick wins before I look to the smaller details that are more complicated and nuanced. The state has to work the same, in the real situation we're in.

2. If I'm rich, I can just bugger off elsewhere if you want to tax me that much. Then you lose the 13% you're already getting off my signifigant wealth. Meanwhile, a lot of the reliefs are there to encourage me to spend my money on things that will earn me more money - investing in business, and in jobs and so forth.

I'm not saying give the rich a free pass. I'm just saying that for the same reason that 12.5% corp tax makes sense, so does low taxes on rich people willing to invest their money into job creating sectors.

Scofflaw

Beasty wrote: »

There seems to be some confusion here!

The analysis in question is available here:
http://www.finance.gov.ie/documents/publications/reports/2009/analytaxrestrict09.pdf

It simply covers all (not a sample) of the individuals who were impacted by the restrictions imposed in the 2006 and 2007 Finance Acts. The changes in those acts introduced limitations on tax relief available to those high earners who chose to take advantage of tax reliefs, to ensure they still paid an overall tax rate of approximatley 20%. for those earning over €500k per year in total.

Only 439 individuals had claimed reliefs that were affected by the new rules in 2007. 214 of them earned over €500k, and their effective tax rate was 20.08% - ie the intention of the new legislation was met

Others, earning up to €500k who also took advantage of these schemes, paid an overall effective tax rate of 13.63%.

The analysis really does not tell us anything else. In particular it makes no statement of those (presumably many thousands) of individuals who may be considered "high-earners", but did not avail themselves of these reliefs. In their cases, the effective tax rate (ignoring PRSI and Health levies) would have been approaching 40%.

The basic message is there are relatively small number of individuals who earn these amounts that take advantage of these reliefs, and this has been partly clawed back by the new legislation. However there are likely to me a much larger number of individuals who earn these amounts who take no advantage of these reliefs, and contributed (in 2007) approaching 40% of their total income to the government in the form of tax (and additional amounts of PRSI and health levies). This second category of individuals are contributing 50%+ of their income (including levies) in the current year.

Good piece of analysis there. I'd agree that the information isn't presented as a survey, but as an analysis of the impact of restrictions on the people availing of them: "Analysis of High Income Individuals’ Restriction 2007" is the title. Within the analysis, individuals likely to be impacted were indeed surveyed, but that doesn't in any sense make it a survey of the effective tax rates paid by high earners, which is how the blog Brian refers to appears to have treated it. It is specifically a survey of those high earners who have reduced their effective tax rate by availing of exemptions, and purposefully doesn't include those who haven't.

In a sense, that really ought to be "thread over", because the initial premise is flawed. It won't be, of course.

cordially,
Scofflaw

Beasty

brianthebard wrote: »

I'm not saying you're wrong Beasty but the blog where I first came across the document called it a survey, and the document itself doesn't seem to clearly state whether it is a survey or all of the people that were impacted as you say. Do you have another link from the dept of finance perhaps that would clarify?

I think the language used throughout the report makes it clear, and as Scofflaw points out, there is a major clue in the title.

The original blog you referred to made the simple mistake (that has been repeated throughout this thread) that this was a sample of all higher earners. Looking at the blog, I guess the interpretation they adopted suited a political point they were trying to make:)

Permabear

This post has been deleted.