Why does a single tax-payer pay less than One-Income Married tax payer?

tails_naf

I saw something last night which stated that the 4-year plan changes would have the following effect (after the 4 years is up)

Single Tax Payer on 55k - 1,800 euro less take-home pay than today.
One-Income Married Tax Payer on 55k - 2,1000 euro less take home pay.

Seems a bit upside down - at least give parity ffs!

Are these numbers correct?

gonedrinking

its the other way about, married people pay less tax than single people

tails_naf

Do you have numbers to back that up?
Because I've heard it repeated many times that it is married, one income pay more than a single person alone.

perhaps married, with 2 incomes pay less than one person on an income equal to the sum of the 2 incomes, but in cases where there is just 1 income, married people loose out (plus have to support dependents = double loss!)

ardmacha

Do you have numbers to back that up?
Because I've heard it repeated many times that it is married, one income pay more than a single person alone

Where would you hear such nonsense? A married person would pool his income and have double credits and so forth and so pay a lot less.

The budget proposals reduce slightly the advantage of the married person as credits are reduced.

droidus

ardmacha wrote: »

Where would you hear such nonsense? A married person would pool his income and have double credits and so forth and so pay a lot less.

The budget proposals reduce slightly the advantage of the married person as credits are reduced.

I saw it too. Primetime graphic last night.

Arciphel

Same here I saw it too... I will get a screen grab from the RTE player.

ArmaniJeanss

I don't see the problem ye are having with this.
Single Person €1800 worse off.
Married Person €1050 worse off. (or €2100 if you combine their amounts)

So the married people still do significantly better than the single person, which is what you want?

Arciphel

Here you go, screengrab from RTE Player.

rev2.0

ArmaniJeanss wrote: »

I don't see the problem ye are having with this.
Single Person €1800 worse off.
Married Person €1050 worse off. (or €2100 if you combine their amounts)

So the married people still do significantly better than the single person, which is what you want?

But its a single income family?

The Muppet

I saw this too.

"for a single person on €55,000 by 2014 they will be down about €1860.

for a married one income family on €55000 the reduction is €2,310"

I though it strange too , perhaps it's a mix up.

ardmacha

The budget proposals reduce slightly the advantage of the married person as credits are reduced.
I saw it too. Primetime graphic last night.

People are getting confused on this thread.

Do single income married people pay more tax than single people? No, they pay less

Will single income married people be affected more by the proposals than single people? Yes, they will, as credits will be reduced then if you have two credits you'll be worse hit, see screenshot above

Will single income married people then be paying more tax than single people? No they will still pay quite a bit less


[/end] thread

mikewest

These figures are taken directly from the 4 year plan (Page 89 I think). If you think there has been a mix up in the numbers then contact Brian who I am sure will set you straight.

ArmaniJeanss

mikewest wrote: »

These figures are taken directly from the 4 year plan (Page 89 I think). If you think there has been a mix up in the numbers then contact Brian who I am sure will set you straight.

There is no mixup with the numbers. Just a mixup by a few people here who are interpreting it incorrectly. Been explained by Ardmacha and myself.

koHd

Arciphel wrote: »

Here you go, screengrab from RTE Player.

ArmaniJeanss wrote: »

There is no mixup with the numbers. Just a mixup by a few people here who are interpreting it incorrectly. Been explained by Ardmacha and myself.

Sorry, but I'm still completely lost.

I saw this yesterday too. It quite clearly states a single person pays less tax than a one income married couple.

I read the explanation above how that is not the case, but the info from the plan is telling us quite simply one income married couples pay more.

Welease

koHd wrote: »

Sorry, but I'm still completely lost.

I saw this yesterday too. It quite clearly states a single person pays less tax than a one income married couple.

I read the explanation above how that is not the case, but the info from the plan is telling us quite simply one income married couples pay more.

No it doesnt.. As Ardmacha and others have stated..

That graphic doesnt show how much tax is paid.. It shows how much the tax credit allowances changes will effect them.. You are assuming the paid the same amount of tax previously.. they didn't..

Stheno

koHd wrote: »

Sorry, but I'm still completely lost.

I saw this yesterday too. It quite clearly states a single person pays less tax than a one income married couple.

I read the explanation above how that is not the case, but the info from the plan is telling us quite simply one income married couples pay more.

It's due to the changes in tax credits, a one income married couple can choose to have all of the PAYE credits for both spouses as part of the credits for the person earning. I.e. if the credits are decreased by 500 per person, then a single income married couple lose 1000 as opposed to the 500 an individual loses, as that is now taxable income.

So if the credits for individuals are decreased, then the credits for both the spouses are decreased hence the double whammy so to speak compared to an individual who just has the individual decrease.

A single person pays €1,860 more per person
A married person pays €1,155 more per person - the couple pays €2,310

ArmaniJeanss

koHd wrote: »

Sorry, but I'm still completely lost.

I saw this yesterday too. It quite clearly states a single person pays less tax than a one income married couple.

I read the explanation above how that is not the case, but the info from the plan is telling us quite simply one income married couples pay more.

Howz about this then?

Say every single tax credit in the system was reduced by 20%, which would be I think all will agree a relatively fair change.
But those who get the least tax credits (single person with no special circumstances) would get the least overall reduction in their pay. And those who get the most credits (married,kids,carers, whatever the other credits are) would see the most reductions.

But whilst the single person would see the smallest reduction under this plan he/she is still the person who gets proportionally the biggest tax bill, because he/she doesn't have the credits in the first place.

dreenman

Well the intention of the 4 year plan is to really put the squeeze on the less well off which this does.

Also I they will probably abolish child allowance in the budget which really will hit poorer couples and not effect well off singles (well maybe some). And of course now that we can use condoms without guilt I expect more people to remain childless for many years to come as they wont be able to afford kids!

They must also think that couple on 55K between them are probably less likely vote FF than a single person on 55K. This is how FF works!

tails_naf

I see what ardmacha, et all are saying - that when you count up all taxes, the single person is still paying more in total - just the gap between what a single person and a single income married couple would pay has narrowed, because the delta change in taxes proposed has hit the married couple harder by roughly 300 euro.

That said - why not at least make these delta changes the same in both cases.
Makes little sense to do the opposite.

Welease

tails_naf wrote: »

I see what ardmacha, et all are saying - that when you count up all taxes, the single person is still paying more in total - just the gap between what a single person and a single income married couple would pay has narrowed, because the delta change in taxes proposed has hit the married couple harder by roughly 300 euro.

That said - why not at least make these delta changes the same in both cases.
Makes little sense to do the opposite.

I imagine the sums being thrown around are somewhat guesstimates at this stage.. We know that tax credits will be changing, and different people are eligible for different tax credits.. So it would never be a simple matter of just changing a single figure under our current tax system...

For example a single person working gets a single persons tax credit of €1830, whereas a married couple would get €3660... but that married couple (as in my case) would also be eligible to claim Homecarers tax credit of €900 for my wife staying at home, which obviously a single persons can't claim etc etc.. So I would have to currently earn over ~22K (basic tax credit + married person tax credit + home carers allowance etc.) before I paid a cent in tax, whereas a single person would be liable from the 19-20K level..

A list of the current tax credits can be found @ http://www.revenue.ie/en/tax/it/tax-chart.html

ArmaniJeanss

tails_naf wrote: »

I see what ardmacha, et all are saying - that when you count up all taxes, the single person is still paying more in total - just the gap between what a single person and a single income married couple would pay has narrowed, because the delta change in taxes proposed has hit the married couple harder by roughly 300 euro.

That said - why not at least make these delta changes the same in both cases.
Makes little sense to do the opposite.

The only mathematical way to do this (make the net effect the same in both cases, or by extrapolation in all cases) is to only reduce the most common tax credit which everyone gets, and leave the extra tax credits alone. For ever. You could never reduce a special tax credit because then '[insert particular group] is proportionally getting hit more than the single person'.

ardmacha

Well the intention of the 4 year plan is to really put the squeeze on the less well off which this does.

The intention of the 4 year plan is to reduce the deficit to manageable proportions, which includes asking for a contribution from those who do not currently pay income tax.