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Income tax to drop

  • 21-11-2010 10:38pm
    #1
    Dannyboy83
    Registered Users, Registered Users 2 Posts: 4,236 ✭✭✭


    :confused:
    http://www.rte.ie/news/2010/1121/economy.html
    Taoiseach Brian Cowen, has confirmed that a major financial assistance plan for Ireland has been agreed with the EU.

    Income tax levels would be returned to 2006 levels he said.

    It will hardly come as a surprise to hear of massive spending cuts, altho I'm surprised to hear income tax is going to drop.

    Is this an attempt to stimulate spending?


Comments

  • #2
    eigrod
    Registered Users, Registered Users 2 Posts: 7,687 ✭✭✭eigrod


    Dannyboy83 wrote: »
    :confused:


    It will hardly come as a surprise to hear of massive spending cuts, altho I'm surprised to hear income tax is going to drop.

    Is this an attempt to stimulate spending?

    Eh ? Is this a wind up ? 2006 levels were higher.


  • #3
    thetonynator
    Closed Accounts Posts: 5,234 ✭✭✭thetonynator


    Isn't that an increase?? unless he drops the lower rate and adds a third rate or something . . .


  • #4
    namloc1980
    Registered Users, Registered Users 2 Posts: 18,379 ✭✭✭✭namloc1980


    I think you got the wrong end of the stick. Income tax is going up and as usual middle income PAYE workers are going to get hammered.


  • #5
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,690 Mod ✭✭✭✭Stheno


    Income tax is going to rise,

    2006 rates
    32,000 @ 20%
    Balance @ 42%

    2010 rates
    €36,400 @ 20%
    Balance @ 41%

    Basically on the €4,400 difference @ 20% you will now pay an additional 22% tax of €80 per month or €960 per year if that change comes in.


  • #6
    thetonynator
    Closed Accounts Posts: 5,234 ✭✭✭thetonynator


    Stheno wrote: »
    Income tax is going to rise,

    2006 rates
    32,000 @ 20%
    Balance @ 42%

    2010 rates
    €36,400 @ 20%
    Balance @ 41%

    Basically on the €4,400 difference @ 20% you will now pay an additional 22% tax of €80 per month or €960 per year if that change comes in.

    And another extra 1% on everything over €36,400.


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  • #7
    Dannyboy83
    Registered Users, Registered Users 2 Posts: 4,236 ✭✭✭Dannyboy83


    Stheno wrote: »
    Income tax is going to rise,

    2006 rates
    32,000 @ 20%
    Balance @ 42%

    2010 rates
    €36,400 @ 20%
    Balance @ 41%

    Basically on the €4,400 difference @ 20% you will now pay an additional 22% tax of €80 per month or €960 per year if that change comes in.

    Sorry, now I understand, the SRCOP is going to return to 2006 levels.
    (I had predicted this elsewhere - d'oh!)
    http://www.boards.ie/vbulletin/showthread.php?t=2056067328

    Will the levies remain then?
    I was assuming, from the article, they would drop.
    Altho I suspect they will simply be consolidated.


  • #8
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,690 Mod ✭✭✭✭Stheno


    Dannyboy83 wrote: »
    Sorry, now I understand, the SRCOP is going to return to 2006 levels.
    (I had predicted this elsewhere - d'oh!)

    Will the levies remain then?
    I was assuming they would drop.

    I would imagine that the health and income levies are going to be integrated into one levy, and the rate increased by 1-2 percent. Just my opinion mind!


  • #9
    Dannyboy83
    Registered Users, Registered Users 2 Posts: 4,236 ✭✭✭Dannyboy83


    Stheno wrote: »
    I would imagine that the health and income levies are going to be integrated into one levy, and the rate increased by 1-2 percent. Just my opinion mind!

    Yep, my sentiments exactly.


  • #10
    earlyevening
    Registered Users, Registered Users 2 Posts: 1,332 ✭✭✭earlyevening


    My understanding of this is that income tax levels will return to 2006 levels. This not the same as returning to 2006 rates.

    Rather rates, credits and thresholds will be reset to ensure the TOTAL income tax take returns to 2006 levels (when there was virtual full employment).


  • #11
    Dannyboy83
    Registered Users, Registered Users 2 Posts: 4,236 ✭✭✭Dannyboy83


    earlyevening wrote: »
    My understanding of this is that income tax levels will return to 2006 levels. This not the same as returning to 2006 rates.

    Rather rates, credits and thresholds will be reset to ensure the TOTAL income tax take returns to 2006 levels (when there was virtual full employment).

    I hope not! - you are talking about draconian tax increases if that is the case!:eek:


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  • #12
    earlyevening
    Registered Users, Registered Users 2 Posts: 1,332 ✭✭✭earlyevening


    Unfortunately, yes.

    Desperate times etc..


  • #13
    noxqs
    Registered Users, Registered Users 2 Posts: 413 ✭✭noxqs


    So everything above 32,000 will be taxed at full rate?

    ..

    How about taxing alittle on the 50% who currently dont pay tax.

    Either that or start dropping the cost of living, didnt notice any drastic price drops myself. So all in all I feel pretty much screwed by everyone.


  • #14
    MagicMarker
    Banned (with Prison Access) Posts: 32,865 ✭✭✭✭MagicMarker


    Stheno wrote: »
    Income tax is going to rise,

    2006 rates
    32,000 @ 20%
    Balance @ 42%

    2010 rates
    €36,400 @ 20%
    Balance @ 41%

    Basically on the €4,400 difference @ 20% you will now pay an additional 22% tax of €80 per month or €960 per year if that change comes in.
    Not to mention a decrease in tax/paye credits.


  • #15
    Yitzhak Rabin
    Banned (with Prison Access) Posts: 7,225 ✭✭✭Yitzhak Rabin


    Why not add an extra band at 50% tax for those earning over, say, 70k?


  • #16
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,690 Mod ✭✭✭✭Stheno


    yekahs wrote: »
    Why not add an extra band at 50% tax for those earning over, say, 70k?

    Between income tax, PRSI, health and income levies, people on over 75k approx pay more than 50% currently.

    You've tax at 41%, PRSI and Health levies at 8% then 4% income levy iirc

    More than 50% of people earning pay no tax. I recall 1997 when an income in excess of more than £10,000 (€12700) meant you paid tax of 46% on anything above that €12700!


  • #17
    roashter
    Registered Users, Registered Users 2 Posts: 179 ✭✭roashter


    Yeah, I like the idea of a third band for those on high earnings.

    Don't know if it would bring in a lot of extra revenue for the government but at least it be more equatable and gives a better message that everyone has to take some pain and not just low/middle earners


  • #18
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,690 Mod ✭✭✭✭Stheno


    roashter wrote: »
    Yeah, I like the idea of a third band for those on high earnings.

    Don't know if it would bring in a lot of extra revenue for the government but at least it be more equatable and gives a better message that everyone has to take some pain and not just low/middle earners

    This argument drives me bats in relation to PAYE workers.

    Under our current tax system, someone on 25k pays a total of €2576 of their income in tax inclusive http://www.deloitte.ie/tc/Results.aspx which is 10.03% of their gross income, yet someone on PAYE @ 75k pays €26882 http://www.deloitte.ie/tc/Results.aspx which is 35.842% of their gross income!

    Or to put it better one person earning 75 k pays the same amount of tax as ten people earning 25k
    So because they earn three times as much they pay pretty much three point fives times as much tax!


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