Half dont pay tax

Richard tea

I have seen or read this a few times now--- around half of Ireland's working population don't pay any tax Is this true? Who are they? I really don't get this.

Regards
Rich

Scofflaw

Richard tea wrote: »

I have seen or read this a few times now--- around half of Ireland's working population don't pay any tax Is this true? Who are they? I really don't get this.

Regards
Rich

About half the working population don't pay any income tax. Ronan Lyons has an interesting couple of posts on the subject:

* Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.
* Almost 770,000 people earned less than €17,000. Understandably, given tax credits, these workers paid a tiny amount of tax, €20m in total. Their average tax rate was about 0.5%.
* It’s in the middle, though, where things seem to go all screwy. The median earner, earning about €25,000, paid just 4% in income tax! As I argued before, we seem to have got ourselves into a situation where the typical Irish worker pays hardly any income tax and yet seems to think they are heavily taxed.

cordially,
Scofflaw

Richard tea

I see, can I assume that a large portion of them are below the threshold?

Scofflaw

Richard tea wrote: »

I see, can I assume that a large portion of them are below the threshold?

Basically so. The government spent most the last decade moving the tax base of the country away from income tax and onto property taxes (well, stamp duty).

That turns out to have been an almost comically bad move. Our government did exactly what banana republics do when the price of bananas is high - reduce the income tax base to gain votes, and bloat the civil service payroll.

cordially,
Scofflaw

monkeypants

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

Mr. Loverman

I remember reading that it's something like 10% of earners who pay 90% of the tax.

The concept of "tax the rich" to get Ireland out of its hole is grossly unfair.

Scofflaw

Another handy survey analysis: http://dublinopinion.com/2009/07/12/wages-and-class-in-ireland-an-analysis-of-the-national-employment-survey-2007/

cordially,
Scofflaw

Boskowski

monkeypants wrote: »

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

How is that shockingly low? The only shocking thing about is that to some it seems shockingly low implying that 500 per week is sh1t money.

On a more serious note:
Wouldn't surprise me one bit since half the country is on either 'money on the hand' or three day weeks plus supplements these days it seems.

daithicarr

interesting points. personaly i would be in favour of more taxs, i wouldnt mind paying a lot more once i could be sure it wouldnt go to bloating the civil service pay.

if we were to extend the tax net and increase the average tax paid from 4 % to 20 % what would the returns be like? is there anywhere you can view a break down of the tax return figures?

thebman

monkeypants wrote: »

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

That isn't low. I used to earn less than that and run a car and still save about 500 a month commuting into city centre.

People need to learn to budget in this country.

hobochris

monkeypants wrote: »

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

That really depends on your occupation, I'd consider that good money for an Admin job, but, a start off wage for a role requiring a degree for entry.

RDM_83 again

Why i the figure 25,000 the link gives a median of 29,000.
I'd also be curious if this figure for those in full time role or simply all adults ih the state.
Also the figure is a bit meaningless as the with everything in statistics you need an average and standard deviations (or simply a nice histogram).
The figure is made doubly meaningless because it is talking about individuals not tax paying units, a family with a breadwinner of GP and a part time secretary is a very well paid unit even though one is earning low wages.

Also on the fact that the richest few % pay the majority of tax is meaningless unless you come back with a statement of what percentage of the countries wealth they control?


http://www.irishtimes.com/newspaper/ireland/2010/0824/1224277445100.html

feicim

Mr. Loverman wrote: »

I remember reading that it's something like 10% of earners who pay 90% of the tax.

The concept of "tax the rich" to get Ireland out of its hole is grossly unfair.

LOL!

Indubitably old chap, god forbid they would have to sell the bentley!

Don't worry the poor wouldn't be getting it, the tax would be taken from the rich and given to the super rich (bank senior bond holders etc etc).

ArphaRima

I think this is the reason that the last few tax increases have been levies.

A levy applies to almost everyone. A straight percentage. Earn more - pay more. I expect to see more levies.

monkeypants

I just thought that it was kind of low for a median figure. If my understanding of median is correct, half of people earn less. Have we not been saying for years that we're paying ourselves too much?

onedmc

Why am I paying 35.9% of my income in tax if the wealthy are only paying 18% and the poor paying 0.5%

changes

1.5 Million Medical Card holders in the country -granted alot of them are children and unemployed. But many are in employment or working part time. They should have to pay the income levy and full PRSI contributions. And a little income tax would do no harm either.

Mr. Incognito

I could give a few pointers on this but I haven't seen any of these assertations backed up by links to any real data.

Rich people can afford tax advisors to minimise tax- that's why their rate is so low.

Middle income families get it in the ass.

You don't like it- don't vote for a curropt political party in bed with the developers.

Geuze

Part-time workers, students with summer jobs, etc., loads of reasons why people pay low or zero tax.

Currently, a single person starts paying tax at 18,300. If they pay rent, bins, etc., this could be 21k.

No income tax until 21k is one of the reasons lots of people don't pay tax here.

Also, if one person in a couple is over 65, then they are tax exempt up to 40k. So if they earn 750pw, they pay ZERO tax.

This means there are thousands of retired people paying zero tax, even if they earn 500-750pw.

Geuze

Here is the Revenue's stats report for 2008:

http://www.revenue.ie/en/about/publications/statistical/archive/2008/index.html


Here is the section on income tax:

http://www.revenue.ie/en/about/publications/statistical/archive/2008/income-distribution-statistics.pdf

Happy reading.............

Idbatterim

Why am I paying 35.9% of my income in tax if the wealthy are only paying 18% and the poor paying 0.5%

Why shouldnt you pay through the nose? you have probably gotten yourself a decent education and work hard. Would you not think about those less fortunate than you? who havent done anything to improve their situation?

Scofflaw

onedmc wrote: »

Why am I paying 35.9% of my income in tax if the wealthy are only paying 18% and the poor paying 0.5%

The wealthy aren't only paying 18% - I think you may have read the figure wrong:

* Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.

The average tax rate for the wealthy is 27.5% on their total earnings, not 18% - the latter figure is the proportion of all income tax paid by the top 0.5% of earners.

Are you actually paying 35.9% on your total earnings? If so, you're probably one of the top-rate taxpayers in the country!

slightly puzzled,
Scofflaw

Dob74

Richard tea wrote: »

I have seen or read this a few times now--- around half of Ireland's working population don't pay any tax Is this true? Who are they? I really don't get this.

Regards
Rich

It should be income tax. If you are a PAYE worker you get a tax free allowance of 1830 + 1830 personal allowance.
3660/20%= 18300
so everyone who is a PAYE worker does not pay income tax on the first 18300.
The reason why half of irish workers dont pay income tax is that they earn a fairly poor wage under 18k.
But all these workers still pay all the other taxes VAT, Ex duties, PRSI, income levies etc.

Income tax is a third of total taxes so the other two thirds is paid by everyone else.
Accounting firms that specialise in legal tax avoidance schemes for high earners are constantly being given a free run on radio and in the newspapers to moan about the low paid paying no tax.
Personally I am getting sick of listening to there BS.
If top civil servants and the heads of the semi-states want to moan about there income levels, than they should have have there salaries cut so they can live like the rest of us.

djpbarry

Dob74 wrote: »

The reason why half of irish workers dont pay income tax is that they earn a fairly poor wage under 18k.

I find that pretty hard to believe. According to the CSO, the average worker in this country is earning about EUR 22 per hour. Even those classed as "manual workers" are earning almost EUR 16 per hour.

daithicarr

if thats the average, those atthe top must be earning a hell of a lot because i have never earned near 22 , neither have most of my freinds

A Dub in Glasgo

Which is exactly why 'average' is flawed when compared to the median. Do the CSO do median hourly earnings?

djpbarry

A Dub in Glasgo wrote: »

Which is exactly why 'average' is flawed when compared to the median. Do the CSO do median hourly earnings?

The most recent data (October 2007) showed that the median income in this country was EUR 16.29 per hour.

greendom

Let's not forget VAT. Everyone pays that and as lower income earners spend more of their disposable income it should be included to give a more proportionate view.

sh1tstirrer

djpbarry wrote: »

I find that pretty hard to believe. According to the CSO, the average worker in this country is earning about EUR 22 per hour. Even those classed as "manual workers" are earning almost EUR 16 per hour.

The CSO are bluffing I know of plenty workers at the moment earning less than €10/hour.

mrgaa1

http://www.bbc.co.uk/news/uk-politics-11464300 can we follow suit?

onedmc

Scofflaw wrote: »

The wealthy aren't only paying 18% - I think you may have read the figure wrong:



The average tax rate for the wealthy is 27.5% on their total earnings, not 18% - the latter figure is the proportion of all income tax paid by the top 0.5% of earners.

Are you actually paying 35.9% on your total earnings? If so, you're probably one of the top-rate taxpayers in the country!

slightly puzzled,
Scofflaw

Ok I understand 27.5 isn't as bad as 18 and Yip thats what it looks like to me. (Takehome/(Gross-Pension))*100=35.9

djpbarry

sh1tstirrer wrote: »

The CSO are bluffing...

To what end? To scare off potential investors?

conor678

As far as I know low earners pay bout €9 a week PRSI. This is the case with friends of mine who are classified as low earners.

However I do believe that the tax bracket will be extended in the forthcoming Budget meaning that low earners will start paying a small amount of tax.

In my opinion its only fair that every gets taxed accordingly and fairly but unfortunately this is not the case in this fine country!

sh1tstirrer

djpbarry wrote: »

To what end? To scare off potential investors?

Maybe if you posted a more up to date link instead of a 2007 one :rolleyes:

djpbarry

sh1tstirrer wrote: »

Maybe if you posted a more up to date link instead of a 2007 one :rolleyes:

I already did. It shows that mean earnings were higher in Q1 2010 compared to 2007.

Dob74

djpbarry wrote: »

I find that pretty hard to believe. According to the CSO, the average worker in this country is earning about EUR 22 per hour. Even those classed as "manual workers" are earning almost EUR 16 per hour.

The CSO only use stats from employers who respond so the figures will be high because PS and larger companies will respond(61%). They for the most part pay alot higher than the small disorganised companies who cant fill out the CSO questionaire.

Anyway even if the average is 16 an hour, for all those who job share that's only 16k a year. Include all those who work part-time and low earners and I am sure you will have half the employed not liable for income tax.
So the question is do you want to get rid of tax credits?
At the moment everyone employed as a PAYE worker doesnt have to pay the first 3660 of income tax. So do you want to scrap tax credits?

dunsandin

People should remember that when talking about the "wealthy" paying the highest amount of tax, these are just the highest paid employees, the truly wealthy are generally shielded from income tax through the use of investment vehicles and share options. You will often hear of a company owner stating that "I took no pay last year whatsoever", or some other very modest sum.
Their wealth is accruing in the value of their holdings and shares/options and these are not readily taxable. It is those within the paye system who are easiest to tax, and therefore taxed the most. The latest IBEC proposal for those on the MW are all very well - the rate proposed is fairly modest, but the flip side is that for every Euro raised that is another Euro removed from circulation within the real economy and another euro to be frittered by the state.

daithicarr

except IBEc dont seem to mind if that euro is removed from the minimum wage earners either through cuts in minimum wage or tax on minimu wage, while rejecting any taxs or cuts their members may face.

dunsandin

daithicarr wrote: »

except IBEc dont seem to mind if that euro is removed from the minimum wage earners either through cuts in minimum wage or tax on minimu wage, while rejecting any taxs or cuts their members may face.

Generally speaking, vested interests have a desire to protect their vested interests. IBEC is a bit of a vested interest. Don't be surprised when they try to protect them - their vested interest that is. I think that's that point made anyway.

szjon

djpbarry wrote: »

I find that pretty hard to believe. According to the CSO, the average worker in this country is earning about EUR 22 per hour. Even those classed as "manual workers" are earning almost EUR 16 per hour.

Look at the service sector and a supervisor is lucky to earn €9 an hour. As a supervisor in a 5 star hotel responsible for 15 staff my pay was €23000 a year. After deductions it is about €390 a week. Working split shifts and no overtime, just extra hours pay. The middle class need to realise how much petrol station attendants, deli counter staff, hotel workers and all the other multitudes of people who do a fair days work for barely a subsistence wage are NOT spongers living off the taxes of the rest. They make the coffees, beds, breakfast rolls etc. This is a massive part of the economy.

Usually treated like an underclass by the customers too, I can tell you how hard it is to keep that smile up when dealing with customers.

Godge

onedmc wrote: »

Ok I understand 27.5 isn't as bad as 18 and Yip thats what it looks like to me. (Takehome/(Gross-Pension))*100=35.9

Are you sure that you are claiming all your tax credits? Given that there is an amount of tax-free income available to everyone, as well as an amount of lower-rate tax income, in order to have an effective tax rate of 35.9%, you would have to be earning up around 100,000 as a single person with no mortgage with no steps taken to reduce your tax liability. Strange.

djpbarry

Dob74 wrote: »

Anyway even if the average is 16 an hour, for all those who job share that's only 16k a year. Include all those who work part-time and low earners and I am sure you will have half the employed not liable for income tax.

The CSO reports include data on hours worked – I’m not seeing anything to suggest that large numbers of people are working 17-hour weeks (I presume that’s how you arrived at 16k). I don’t doubt that there are people who fall into the above bracket, but half of all workers? No chance.

Dob74 wrote: »

So the question is do you want to get rid of tax credits?

I think it’s a given that the PAYE system is in need of reform. I don’t know whether that should involve a reduction of tax credits (although it probably will), an increase of tax rates or a shifting of the tax bands.

djpbarry

szjon wrote: »

The middle class need to realise how much petrol station attendants, deli counter staff, hotel workers and all the other multitudes of people who do a fair days work for barely a subsistence wage are NOT spongers living off the taxes of the rest.

€23k is a subsistence wage? Are you kidding me? Dude, I worked in a convenience store once upon a time and I can tell you that I was taking home substantially less than €9 per hour.

And what’s this “middle class” bollocks? “Middle class” kids don’t work in shops and delis? “Working class” people are doomed to a life of serving coffee and pumping petrol? Please...

szjon

I have a simple solution. Seize assets of bankers, houses, cars and bank accounts, use the criminal assets guys. Go back through the last 20 years tax records, those who made lots of money during the boom, tax them more. Put a 50% of value windfall tax on any second homes. Those who kept up with inflation, tax them less. Graduate it across the board and we will see a return to normality.

Oh, and tax consumption, starting with a mobile phone handset tax. Anyone who feels the need to have a new phone every few months as a fashion item should pay more, tax overseas travel. get the people who demand more wages to pay for lifestyles they don't seem to realise are luxurious. Tax bottled water too. Watching a westerner buying crates of bottled (usually tap) water makes me sick to my stomach.

In other words, take back from the rich, tax the spending of the middle classes, problem solved.

rumour

The following is a party political broadcast from a left wing supporter who if I was to guess will eventually support labour. This will be the labour mandate.

szjon wrote: »

I have a simple solution. Seize assets of bankers, houses, cars and bank accounts, use the criminal assets guys..

Great idea...

szjon wrote: »

Go back through the last 20 years tax records, those who made lots of money during the boom, tax them more...

We believe that someone somewhere made loads of money and we want it. This is a plausible way of getting...I'm voting for you.

szjon wrote: »

Put a 50% of value windfall tax on any second homes. ...

Windfall...I like that word....yes windfall tax on the rich...

szjon wrote: »

Those who kept up with inflation, tax them less....

The working class don't do economics but we know what inflation is so this should sell!!:pac:

szjon wrote: »

Graduate it across the board and we will see a return to normality.....

Indeed...protect the average worker at all costs make the rich pay.

szjon wrote: »

Oh, and tax consumption, starting with a mobile phone handset tax.

Capitalist scumbags consuming the planet.

szjon wrote: »

Anyone who feels the need to have a new phone every few months as a fashion item should pay more,

Gereral guidance for taxing.....identify feelings and impose tax...not bad.

szjon wrote: »

tax overseas travel.,

All travel especially those rich business types.

szjon wrote: »

get the people who demand more wages to pay for lifestyles they don't seem to realise are luxurious..,

I'm not sure what economic or social model this belongs to, guess it will work.

szjon wrote: »

Tax bottled water too. Watching a westerner buying crates of bottled (usually tap) water makes me sick to my stomach...,

Better still tax sickness guaranteed source of income...only the rich of course.

szjon wrote: »

In other words, take back from the rich, tax the spending of the middle classes, problem solved.

This ends the party political broadcast from a left wing supporter who if I was to guess will eventually support labour. This will be the labour mandate.

ArphaRima

szjon
I find it hard to believe that a 15 year old with no grasp of even basic economics and holding a penchant for communist doctrine has just joined boards, made 8 posts and then awaited a revolution.

When you get a job one day you'll get over your mobile phone envy. Ryanair should be able to lose your bags enroute to alicante too so you can be like everyone else.

efb

I was informed and stand corrected that the top 5% of earners in Ireland earn 90% of the income

thebman

szjon wrote: »

In other words, take back from the rich, tax the spending of the middle classes, problem solved.

Of course without that spending, the stores they spend in go under, making more people unemployed ...

djpbarry

szjon wrote: »

I have a simple solution. Seize assets of bankers, houses, cars and bank accounts, use the criminal assets guys. Go back through the last 20 years tax records, those who made lots of money during the boom, tax them more. Put a 50% of value windfall tax on any second homes. Those who kept up with inflation, tax them less. Graduate it across the board and we will see a return to normality.

By “return to normality”, I presume you mean “enactment of DeV’s puritanical, socialist wet dream”?

szjon wrote: »

Oh, and tax consumption...

Consumption is already taxed. It’s called VAT and our rate is already higher than most other EU states.

szjon wrote: »

In other words, take back from the rich, tax the spending of the middle classes, problem solved.

If the problem was “how do we discourage people from bettering themselves”, then yeah, that would be a terrific solution.

Fat_Fingers

szjon wrote: »

I have a simple solution. Seize assets of bankers, houses, cars and bank accounts, use the criminal assets guys. Go back through the last 20 years tax records, those who made lots of money during the boom, tax them more. Put a 50% of value windfall tax on any second homes. Those who kept up with inflation, tax them less. Graduate it across the board and we will see a return to normality.

Oh, and tax consumption, starting with a mobile phone handset tax. Anyone who feels the need to have a new phone every few months as a fashion item should pay more, tax overseas travel. get the people who demand more wages to pay for lifestyles they don't seem to realise are luxurious. Tax bottled water too. Watching a westerner buying crates of bottled (usually tap) water makes me sick to my stomach.

In other words, take back from the rich, tax the spending of the middle classes, problem solved.

Oh dear.....

Lockstep

djpbarry wrote: »

And what’s this “middle class” bollocks? “Middle class” kids don’t work in shops and delis? “Working class” people are doomed to a life of serving coffee and pumping petrol? Please...

I'd view myself as middle class, and I've a long history of working in delis, shops, hotels, bars and supermarkets. However, I'm lucky enough to be able to use this money to pay my way through education. I'm probably not going to be there my whole life.
However, in every single one of these places I worked in, there were workers who'd been there for decades and not as managers either. If you're there for life, you're lifestyle is probably going to be working-class unless you're a manager or have other independent funding.

However, I found middle class customers far more odious and disrespectful than the less affluent ones. When I was working in the Dunnes in Westside (Galwegians will know what I'm referring to) you had the occasional kids trying to nick trolleys and so on but the customers treated me infinitely nicer than the predominantly middle class ones in Knocknacarra/Rahoon where they viewed me as their personal shopping assistant. One woman treated me as her personal shopping assistant and ordered me to push her trolley around the entire store while she shopped. Generally it's assumed that as retail workers, we must be stupid or unqualified.
I remember one thread on Boards RE the ****e retail staff put up with where a sales assistant posted where one woman was loudly talking to her daughter about how her daughter was going to study law in Trinity. She mockingly asked the assistant did she go to college to work there and the sales assistant made the woman's jaw drop when she replied "Yes, I got my law degree from Trinity last year".
Likewise, working in bars in 4 star hotels involved glasses, cans and bottles being thrown at me by inebriated rich people and occasional groping by drunken women.