Revenue income tax figures for 2008 are out

ei.sdraob

see detailed post there

figures are for 2008

There was a total of €12.2 billion of income tax paid on the €90.8 billion of income earned. The 0.6% of tax cases in the top income category, with 8.1% of the income, paid 17.5% of the total income tax. The 54.0% of cases below €30,000, with 26.7% of the income, paid 5.0% of the total tax.

The very low rates of tax on incomes below €20,000 can be seen. Incomes in the “€17,000 - €20,000” range faced an effective tax rate of 0.66% and paid an average of €121.44 in tax or €2.34 per week. Earners in the top income range faced the 28.0% effective rate and paid an average of over €157,000 in tax – just over €3,000 per week. There is a 30-fold difference in the average income earned in these categories and a nearly 1,300-fold difference in the amount of tax paid.

So what do our resident "tax the rich" brigade have to say about this picture?

HivemindXX

Damn those people on less than 20k a year.

Will nobody think of the top 1% of the country paying 28% in taxes, leaving them barely €10,000 a week to spend on essentials like caviar and jet skis.

Aard

Why should we leave them with less? They earned it.

rumour

ei.sdraob wrote: »

see detailed post there

figures are for 2008





So what do our resident "tax the rich" brigade have to say about this picture?

Thanks for info. Am I reading this right?

It appears there really are not that many people in the 150K to 275K bracket judging by the drop in takings.

It does suggest a there is a significant bunch in the over 275k bracket who are contributing an enormous amount. Is there any way to quantify the number of individuals who contribute, for example we know the workforce is approx 1.8m it would be useful to know how this is distributed according to the table above.

Taxi Drivers

rumour wrote: »

Thanks for info. Am I reading this right?

It appears there really are not that many people in the 150K to 275K bracket judging by the drop in takings.

It does suggest a there is a significant bunch in the over 275k bracket who are contributing an enormous amount. Is there any way to quantify the number of individuals who contribute, for example we know the workforce is approx 1.8m it would be useful to know how this is distributed according to the table above.

Rumour,

They are further useful tables in the link provided by the OP.
- number of people in each bracket
- incomes earned in each bracket
- effective tax rates in each bracket

There are 33k people earning between €150k and €275k and 13k people earning more than €175k. The 33k in the first range earned €6.4 billion while the 13k people in the top bracket earned €7.4 billion. They earned more so they paid more.

Also there were 2.1 million in the workforce in 2008. I don't know if we can reconcile these tables with employment income as the Revenue tables cover all earned income not just that from employment. There are over 2.3 million cases in the Revenue tables and with over 400,000 double- income couples filing jountly there are over 2.7 million income earners in the Revenue data. It is clear that a substantial portion did not earn the income included here in the labour market.

Sleepy

It would be interesting to see how much of that tax is "real" income too... i.e. what proportion of the tax in each category comes from the private sector and how much is simply an accounting figure used for tax levied on the public sector.

Dob74

ei.sdraob wrote: »

see detailed post there

figures are for 2008





So what do our resident "tax the rich" brigade have to say about this picture?

Income tax is one measure stick.
Total tax =income + VAT + road tax + Excise duty + service charges +other government revenues.
Would provide a completely different picture.
I make 45k and pay about 15% income tax. But in total tax i pay about 40% of my income.
The indo, Irish Times , Newstalk, RTE, have "experts" from the major accountant firms moaning that the lower paid dont pay there fair share. All the time they refer to income tax and never pointing to total tax percent.
Income tax accounts for about 30% of government revenues, VAT 30% revenues. We all pay the same percentage of VAT, same percentage of excise.
So I think it's dishonest to only point to income tax when having a debate on personal taxation.

Permabear

This post has been deleted.

Aard

Why shouldn't we all pay the same percentage? In absolute terms, higher earners would still pay more euros in tax. If income tax were a flat rate, say 20%, then minimum-wage earners would pay €3,102 each year, whereas the average earner (used to be around €35k) would pay €7,000. One earns more, but he still pays more in tax.

As for VAT, here's a crude example: one person buys a handbag in Brown Thomas (€900), the other in Zara (€90), the other in Penneys (€9). The VAT paid on each of these items is €156.20, €15.62, and €1.56. Again, the "richer" person pays more tax. Even if VAT was a lower rate, how much would the "poorer" person save -- a few cents. Excise is slightly different because it's not generally related to the price of the product.

I'm unsure as to what people want. Is it that higher-earners should have almost the same take-home pay as lower earners? If that's the case, then what's the incentive for them to work? At any rate, such high-earners would just find a different way to get their money into their pockets using companies, trusts, covenants, etc.

Bluntly, I think it's all just jealousy. (Which is probably the best reason people should be giving; anybody giving an economic argument for huge differences in effective rates is plain mad.)

RichardAnd

Aard wrote: »

Why shouldn't we all pay the same percentage? In absolute terms, higher earners would still pay more euros in tax. If income tax were a flat rate, say 20%, then minimum-wage earners would pay €3,102 each year, whereas the average earner (used to be around €35k) would pay €7,000. One earns more, but he still pays more in tax.

As for VAT, here's a crude example: one person buys a handbag in Brown Thomas (€900), the other in Zara (€90), the other in Penneys (€9). The VAT paid on each of these items is €156.20, €15.62, and €1.56. Again, the "richer" person pays more tax. Even if VAT was a lower rate, how much would the "poorer" person save -- a few cents. Excise is slightly different because it's not generally related to the price of the product.

I'm unsure as to what people want. Is it that higher-earners should have almost the same take-home pay as lower earners? If that's the case, then what's the incentive for them to work? At any rate, such high-earners would just find a different way to get their money into their pockets using companies, trusts, covenants, etc.

Bluntly, I think it's all just jealousy. (Which is probably the best reason people should be giving; anybody giving an economic argument for huge differences in effective rates is plain mad.)

I agree but, and I've said this before, in the mind of a socialist, a man on 200k and a man 20k both paying 20% annual tax are paying the same amount of tax

Joey the lips

I actually find this table a little confusing. If the understanding is correct the majority of tax is paid by the wealthy over a certain bracket. If this be the case i find it hard to believe.

I dont necessarilary subscribe to the socialist ideals of tax the rich. I understand it. But i do think that there is a large element of society gaining while those poorest are loosing.

Put quite simply. Its far more beneficial for the govt to take 10% of 435000 unemployed then 20% of a select few. This does not make it right though.

The problem with those on umemployment assistance etc is there life has "Normalised" as a chap said on the radio the other day. The govt did not bring in these rates because they wanted to help them buy luxuary. They brough them in because they felt the poor needed it.

Just my opinion

johnnyskeleton

Joey the lips wrote: »

Put quite simply. Its far more beneficial for the govt to take 10% of 435000 unemployed then 20% of a select few. This does not make it right though.

A great man once said that the art of taxation is obtaining the maximum amount of Milk for the minimum amount of Moo.

"Fairness" should be put aside for a moment, because the argument for fairness is that the poor can't pay and that the rich can pay. But what if that assumption was wrong? What if the poor can, in fact, pay, but the rich either can't or, more probably, won't? Then, surely the fairest thing to do would be to tax where tax can be extracted.

It is important to bear in mind that lowering the tax bands and tax free allowances affects everyone so that is the easiest way to increase the tax take in a fair manner. Plus, politically people don't seem to care about tax bands and credits so much as the base rate of tax (until, of course, they look at their pay cheque).

So really what we need to see from this government is a lowering of the tax credits and bands.

HivemindXX

If a variable tax system (like most industrial countries) is so unfair why stop there?

Under a flat tax rate a cleaner who earns €20k might pay €4k in taxes but a senior solicitor who earns €200k would pay €40k in taxes!

The solicitor doesn't get any more rights. He doesn't get more than one vote. There isn't a special time of day when only top earners get to use the roads. Why shouldn't everyone pay the same amount. That seems fairer. They should both pay €22k, the cleaner can probably sell a kidney or something. Otherwise where's the incentive for people to earn more money?

It's the same argument (unfair to the rich, no incentive to excel) so how many people think the Flat Tax RATE doesn't go far enough and support the Flat Tax system where everyone pays the same amount? If you think it's ridiculous please explain WHY the same arguments don't hold.

As an aside, for any who would like to accuse me of simply being jealous, I am significantly in to the top tax bracket. Obviously I can't prove that on a message board so feel free to assume I'm lying if that's what you need to do to prop up your own opinions.

ei.sdraob

a flat rate system would not only be fair but also easier to understand (aside i would probably pay more under a flat rate system)

right now you need to be an accountant to figure out how much tax you owe with all sorts of credits, levies and bands

ixtlan

Well, the reality is that the tax system works like this.

You take as much as possible from those at the top, as they can afford it.

You take as little as possible from those at the bottom, as they will have to cut back on spending.

BUT... you draw lines where taxing the rich, or the middle class, creates a diminishing return, because they feel their contribution to society is not respected. ie, a doctor who has to work for the average industrial wage is likely to say, I'm off to the UK, or France, or elsewhere that will pay me what I am worth.

The eternal debate is where that line is. Clearly there has to be an incentive in terms of income between social welfare and minimum wage. Then between min wage and unskilled labour. Then between unskilled labour and skilled labour. Then between skilled labour and professionally qualified worked. Then up to senior prof workers. Then up to managers. Then up to senior managers. Then up to company managers. Then up to investors. It's true that those at the top could afford to lose more of their income without it causing a decrease in living standards, but if you take too much you push a ripple of disincentive through the entire chain of employment.

So, where is the line now? Well it does take a lot from the rich. Is that too much? I suspect it's close to it's limit, but really I am no expert. I just hope that the government is getting good advice on how to proceed. And for what it's worth I'm far below any far left proposals on extreme tax, but that does not mean I agree with them.


Ix.

erictheviking1

ei.sdraob wrote: »

see detailed post there

figures are for 2008





So what do our resident "tax the rich" brigade have to say about this picture?

I say tax them even more!:D

erictheviking1

ei.sdraob wrote: »

see detailed post there

figures are for 2008





So what do our resident "tax the rich" brigade have to say about this picture?

In fairness those results are from 3/4 years ago, since then we are paying a lot more tax and we are paying a lot more in stealth taxes which, percentage wise bumps up the amount the working classes pay in taxes. The Rich are still getting richer while the poor get poorer. :mad:

ei.sdraob

erictheviking1 wrote: »

In fairness those results are from 3/4 years ago, since then we are paying a lot more tax and we are paying a lot more in stealth taxes which, percentage wise bumps up the amount the working classes pay in taxes. The Rich are still getting richer while the poor get poorer. :mad:

you have any figures to back your thesis?
these are the latest figures as Revenue take their time releasing stats

erictheviking1

ei.sdraob wrote: »

you have any figures to back your thesis?
these are the latest figures as Revenue take their time releasing stats

Oh Please!:rolleyes: Everyone is paying more taxes in 2011. Even the low paid are in the tax net now and thats on top of their stealth tax payments.

Idbatterim

someone should show these figures to Vincent Brown! Where I work alot of people arent bothered taking on more work even at the rate of E25 per hour, a since they go over the threshold of E32k per year, they are paying more than half of what they earn in tax! I think the upper rate should be lowered, even psychologically that you weren't quite paying half, make it 49% or so. Then lower the point of entry. I think that the low paid are really getting away quite lightly as has been pointed out, and even those on lowish pay are getting hammered on anything over 32k, which isnt a big salary!

MagicMarker

Idbatterim wrote: »

someone should show these figures to Vincent Brown! Where I work alot of people arent bothered taking on more work even at the rate of E25 per hour, a since they go over the threshold of E32k per year, they are paying more than half of what they earn in tax! I think the upper rate should be lowered, even psychologically that you weren't quite paying half, make it 49% or so. Then lower the point of entry. I think that the low paid are really getting away quite lightly as has been pointed out, and even those on lowish pay are getting hammered on anything over 32k, which isnt a big salary!

How do you figure that?

johnnyskeleton

HivemindXX wrote: »

If a variable tax system (like most industrial countries) is so unfair why stop there?

Under a flat tax rate a cleaner who earns €20k might pay €4k in taxes but a senior solicitor who earns €200k would pay €40k in taxes!

The solicitor doesn't get any more rights. He doesn't get more than one vote. There isn't a special time of day when only top earners get to use the roads. Why shouldn't everyone pay the same amount. That seems fairer. They should both pay €22k, the cleaner can probably sell a kidney or something. Otherwise where's the incentive for people to earn more money?

It's the same argument (unfair to the rich, no incentive to excel) so how many people think the Flat Tax RATE doesn't go far enough and support the Flat Tax system where everyone pays the same amount? If you think it's ridiculous please explain WHY the same arguments don't hold.

As an aside, for any who would like to accuse me of simply being jealous, I am significantly in to the top tax bracket. Obviously I can't prove that on a message board so feel free to assume I'm lying if that's what you need to do to prop up your own opinions.

Perhaps the solution is to have a third rate of tax at the upper end which is in fact lower than the middle rate e.g.

20% up to 30k
41% up to 200k
30% up to 500k
25% over 500k

That way, there is an incentive to increase your earnings over each barrier and a low-ish tax over 500k will be a good incentive to make mega bucks.

As regards your graphic description of the cleaner selling a kidney, the reality is that the cleaner at present pays no tax yet gets the benefits of the solicitor's tax money which goes into roads, schools, hospitals etc. The market has determined that that solicitor's work is worth 10 times that of the cleaner, so how is it fair that because he works 10 times harder/better than the cleaner that he should subsidise the cleaner? Moreover, supposing the cleaner was only doing it part time while completing a law degree. Why would the cleaner bother working full time and studying full time and having no life in order to build a better future when they can just do the basic cleaning job and let someone else pick up the tab? The problem often is that you can run out of someone elses pretty quickly.

To my mind, a marginal rate of over 50% is a disincentive to work harder.

HivemindXX

johnnyskeleton wrote: »

As regards your graphic description of the cleaner selling a kidney, the reality is that the cleaner at present pays no tax yet gets the benefits of the solicitor's tax money which goes into roads, schools, hospitals etc. The market has determined that that solicitor's work is worth 10 times that of the cleaner, so how is it fair that because he works 10 times harder/better than the cleaner that he should subsidise the cleaner? Moreover, supposing the cleaner was only doing it part time while completing a law degree. Why would the cleaner bother working full time and studying full time and having no life in order to build a better future when they can just do the basic cleaning job and let someone else pick up the tab? The problem often is that you can run out of someone elses pretty quickly.

To my mind, a marginal rate of over 50% is a disincentive to work harder.

Your post is a fantasy. I have yet to meet a person who would give up a 200k job for a 20k job so they could escape paying taxes.

Do you think we live in a society where the life of a cleaner is the same as the life or a senior solicitor? From your post it appears that you do.

Do you think the wealthy are all fools or self sacrificing saints because they don't give up their well paid jobs and become dossers? From your post it appears that you do.

I ask because there seems to be plenty of people out there who think those on the lowest rung of society are on the pigs back and the wealthiest are hard done by and suffering. I can understand why the wealthy and those who hope to one day be wealthy would say such a thing but I'm baffled as to why ANYONE would actually believe it.

ixtlan

HivemindXX wrote: »

Your post is a fantasy. I have yet to meet a person who would give up a 200k job for a 20k job so they could escape paying taxes.

The issue is more if a person with a 20/30/40/50k job might give that up, and take a risk, maybe re-mortaging a home in order to start a business in which they might eventually make 200k a year. If they feel that 60-70-80% of that income would be taken in tax, then would they take the risk?

If I ask you the question in this way... Should a 20k employee pay any income tax? You would probably say no... which is fair enough. Then if I ask you if the 200k employee should pay 180k in tax so that they earn the same as the cleaner, what would you say?

Probably you would agree this was too extreme? However this means you accept the principle that there is a line to be drawn where people have to have an incentive to progress their careers, take risks and invest.

As I mentioned in a previous post, the debate is where that line is, whereas most discussion seems to be about whether there is a line at all.

Ix.

ixtlan

HivemindXX wrote: »

I ask because there seems to be plenty of people out there who think those on the lowest rung of society are on the pigs back and the wealthiest are hard done by and suffering. I can understand why the wealthy and those who hope to one day be wealthy would say such a thing but I'm baffled as to why ANYONE would actually believe it.

That is an extreme view from those on the right of those on the left.

The extreme view from those on the left seems to be that everyone could receive an average net wage with any earnings over that being taken in tax, and this would have no effect on keeping professionals (doctors/nurses/engineers etc) in Ireland, and no effect on innovation and investment.

I humby suggest that both views are wrong and the reality is somewhere in the middle.

ix

Taxi Drivers

From the same source as the OP.

HivemindXX

ixtlan wrote: »

If I ask you the question in this way... Should a 20k employee pay any income tax? You would probably say no... which is fair enough. Then if I ask you if the 200k employee should pay 180k in tax so that they earn the same as the cleaner, what would you say?

Probably you would agree this was too extreme? However this means you accept the principle that there is a line to be drawn where people have to have an incentive to progress their careers, take risks and invest.

As I mentioned in a previous post, the debate is where that line is, whereas most discussion seems to be about whether there is a line at all.

Ix.

I agree completely with this. There should be an incentive to earn more money, get a better job, educate yourself, improve yourself.

My contention is that there is an incentive to do that at the moment. The line may not be in the perfect place but the point of the original post seems to me to be that the rich are suffering under far too great a tax burden and I don't think this is true.

I was going to say that I don't know of any major economies that use a flat tax, but then I thought I should research that myself, but then I thought I'd just use Wikipedia.

http://en.wikipedia.org/wiki/Flat_tax

The map of countries using a flat tax is interesting. It is predominantly featured in ex-Soviet Block countries. The article contends that these countries are using the flat tax structure to pull themselves out of their post-soviet mess and doing so successfully. This may be a factor but clearly gaining independence from the USSR should also be considered.

The claim is that under a progressive taxation system there is no incentive to improve, which is clearly false so let's say rather that there is reduced incentive. Yet the USA with all the rhetoric of the American Dream and stories of how one man with hard work and an idea can become a billionaire has a progressive tax system. Not that the wealthy there are happy with that of course.

Aard

With a flat-rate system, there would still be leeway for allowances (say €5000 per adult, €2500 per child), which would make it progressive in effect. There was a study done in the US about bringing in a 19% federal flat-rate tax on income. This would be coupled with allowances similar to the above.

Personally, in the interest of finding common ground or an acceptable solution, I would be happy with simply reducing the leap from 20% to 41%. As it is, it more than doubles.

HivemindXX wrote: »

The claim is that under a progressive taxation system there is no incentive to improve, which is clearly false so let's say rather that there is reduced incentive. Yet the USA with all the rhetoric of the American Dream and stories of how one man with hard work and an idea can become a billionaire has a progressive tax system. Not that the wealthy there are happy with that of course.

Interesting you should mention the US, as they went through an incredible process of reducing the marginal tax rate, so that the highest federal rate is now 35%. The average state income tax would be around 6% (many states don't even have one). So yes, it's progressive, but they also understand that having a high marginal rate isn't productive.

In places that do have a high marginal rate (e.g. Denmark), the "entry" tax rate is also high -- even on low incomes, the effective rate works out at about 25%. In the Netherlands, the entry rate is 33%.

I think the similarities of the two ways of doing things is not to have too big a gap between the rates of the lowest-paid and the highest-paid.

One hears outcries of people "actually having to pay tax" now. Anywhere else, and they'd be laughed at.

Idbatterim

How do you figure that?

I meant that once you go over the threshold, over 50% goes to revenue. I dont care what the break down is whether 41% is paye and rest USC or 35% PAYE and rest USC. Either way it all goes into the same pot! I wont be seeing the benefit of my taxes anytime soon anyway! When you have to pay more than half your earnings in tax, once you cross the threshold at a very low 32k (if your single, without dependent children), there is something very, very wrong. Take a read of the damage the USC and lowering of tax bands has done to retail here and spending in general, there were some very worrying articles in the independent. Cutting, rather than taxing is far more desirable! We really are going backwards here, the government are making it less and less attractive to even bother working or opting to get out of the "poverty trap" then again you probably cant really associate our welfare rates and the standard of living here on welfare as poverty! How can we have 50% or so paying no PAYE? I though the country was screwed financially? did I miss something?