Do we pay too much income tax (PAYE Workers only)

relax carry on

I've been reading several threads over the past few months with multiple posters complaining that we pay too much tax.
Just as an exercise, I did some calculations on three sets of income based on 2012 rates etc. It's PAYE workers only, (sorry self employed)

Results are below on a yearly income of €100000, €50000 and €25000 based on single paye worker with no additional reliefs etc. Now the PAYE is the only one I'd say is "tax" but at the end of the day they are all a deduction in your take home pay so PRSI and USC are included.

€100000
PAYE 30812
USC 6319
PRSI class A 3736
Total €40867 or roughly 41% of total.

€50000
PAYE 10312
USC 2818
PRSI Class A 1736
Total €14866 or roughly 30% of total

€25000
PAYE 1700
USC 1068
PRSI Class A 735
Total €3503 or roughly 14%

It's just an exercise and I know everyones situation is unique to them but do you think that we pay too much or too little income tax? Have a look at your payslip and work out what percentage "tax" you are actually paying.

Disclaimer: These were all manually worked out but I'm sure that they are correct. Hopefully I'm not missing something obvious. Be kind.

antoobrien

relax carry on wrote: »

Disclaimer: These were all manually worked out but I'm sure that they are correct. Hopefully I'm not missing something obvious. Be kind.

The figures look about right, my gross last year was just under 38,250. I paid 4936 PAYE, 1290 PRSI, 2038 USC (8,264/38250=21.6%)

relax carry on wrote: »

I've been reading several threads over the past few months with multiple posters complaining that we pay too much tax.

Most people complaining about too much tax are referring to stealth/transaction taxes (vat, excise etc).

Personally i don't think we pay too much income tax. If you go digging through the income distribution statistics (2009 is the latest available year) you'll find that about 67% of the workforce were earning up to 40k gross in 2009, contributing 9% of the income tax for the year.

PRSI is dealt with as a receipt of the DSP, and accounts for another 7bn approx (income tax was 10bn in 2009).

Is that the same as saying I'd like to pay more tax? Hell no.

later12

This came up that Godawful 6-dole-recipients thread, but it is probably relevant here; it's from the most up-to-date revenue statistics and indicates the effective income tax rates excluding PRSI & the USC.

The rates in income tax alone don't strike me as particularly burdensome, but any exercise in comparing our taxes to those of other jurisdictions is going to be highly flawed unless one arrives at a method of accurately comparing the benefits that accrue to individuals on foot of taxes paid in terms of public goods & services.

relax carry on

So ignoring the USC and PRSI, that's 31%, 21% and 7% tax on the €100000, €50000 and 25000 respectively.

Was just getting tired of hearing people post that they were paying over 50% in tax on their income.

Godge

relax carry on wrote: »

So ignoring the USC and PRSI, that's 31%, 21% and 7% tax on the €100000, €50000 and 25000 respectively.

Was just getting tired of hearing people post that they were paying over 50% in tax on their income.

People are paying over 50% in tax on their marginal income.

The rate for any new income - overtime, pay rise, bonus, increment (take your pick for your sector) - for many people is over 50%. In some parts of the public sector when superannuation and pension levy are taken into account, it is about 65% on that marginal income.

Why is that important? People tend not to look at their overall tax rate when they consider whether to do that extra overtime, or whether to work for that bonus or for that promotion. They look at the tax they will pay on the extra bit i.e. the rate of tax on their marginal income.

jester77

relax carry on wrote: »

I've been reading several threads over the past few months with multiple posters complaining that we pay too much tax.
Just as an exercise, I did some calculations on three sets of income based on 2012 rates etc. It's PAYE workers only, (sorry self employed)

Results are below on a yearly income of €100000, €50000 and €25000 based on single paye worker with no additional reliefs etc. Now the PAYE is the only one I'd say is "tax" but at the end of the day they are all a deduction in your take home pay so PRSI and USC are included.

€100000
PAYE 30812
USC 6319
PRSI class A 3736
Total €40867 or roughly 41% of total.

€50000
PAYE 10312
USC 2818
PRSI Class A 1736
Total €14866 or roughly 30% of total

€25000
PAYE 1700
USC 1068
PRSI Class A 735
Total €3503 or roughly 14%

It's just an exercise and I know everyones situation is unique to them but do you think that we pay too much or too little income tax? Have a look at your payslip and work out what percentage "tax" you are actually paying.

Disclaimer: These were all manually worked out but I'm sure that they are correct. Hopefully I'm not missing something obvious. Be kind.

Here's a comparison to German figures for a similar person:

€100000
Income Tax 30.305,00
Social Payments 11.919,96
Solidarity 1.666,77

€50000
Income Tax 9.895,00
Social Payments 9.976,32
Solidarity 544,22

€25000
Income Tax 2.838,00
Social Payments 5.181,60
Solidarity 156,09

The main difference is how little tax the low earners in Ireland pay

lmimmfn

we pay too much in tax for what we get in return( you work and most of your tax funds the HSE but you cant avail of that unless you pay full price for all your medical expenses/pay more for medical insurance ), and as was said add in all the:
stealth taxes, vat increases, septic tank levy, insurance levy + new quinn insurance levy, bin collection tax( this is a tax because if property tax goes to local authority then it should cover bins ), DIRT, Capital Gains tax, 0.6% pension levy, taxed at source on company share schemes( rather than when you sell ), Car Tax, carbon tax that on ESB/Gas bills has vat applied to it??? and soon property tax + water tax

I dont mind paying taxes if i could see where it goes, i.e. motor tax should be ring fenced for roads, if its not enough increase it, if its too much reduce it, how can you determine if taxes are sufficient or too high when theyre all thrown into a big pile of cash in the end and where its no longer possible to account for anything.

*EDIT* Actually what annoys me most its all these increases reducing our standard of living significantly and the goverment are increasing spending negating the whole point yet leaving workers struggling.

relax carry on

lmimmfn wrote: »

we pay too much in tax for what we get in return( you work and most of your tax funds the HSE but you cant avail of that unless you pay full price for all your medical expenses/pay more for medical insurance ), and as was said add in all the:
stealth taxes, vat increases, septic tank levy, insurance levy + new quinn insurance levy, bin collection tax( this is a tax because if property tax goes to local authority then it should cover bins ), DIRT, Capital Gains tax, 0.6% pension levy, taxed at source on company share schemes( rather than when you sell ), Car Tax, carbon tax that on ESB/Gas bills has vat applied to it??? and soon property tax + water tax

I dont mind paying taxes if i could see where it goes, i.e. motor tax should be ring fenced for roads, if its not enough increase it, if its too much reduce it, how can you determine if taxes are sufficient or too high when theyre all thrown into a big pile of cash in the end and where its no longer possible to account for anything.

Thanks for the input but I'm not referring to anything other than income tax on PAYE at the moment and based on the examples provided, are we paying too much or too little to contribute towards funding the country.

lmimmfn

relax carry on wrote: »

Thanks for the input but I'm not referring to anything other than income tax on PAYE at the moment and based on the examples provided, are we paying too much or too little to contribute towards funding the country.

but thats the problem, its in the constitution that all taxes go to one big pot unless specifically legislated for specific taxes, so you cannot determine if income tax alone is enough to run the country, and without even looking at figures i can with certainty say its not, the rest are also needed along with corporation tax, fuel tax etc( again all go into the big pot ). Due to this you cannot determine if any form of taxation is enough/not enough.

srsly78

jester77 wrote: »

Here's a comparison to German figures for a similar person:

€100000
Income Tax 30.305,00
Social Payments 11.919,96
Solidarity 1.666,77

€50000
Income Tax 9.895,00
Social Payments 9.976,32
Solidarity 544,22

€25000
Income Tax 2.838,00
Social Payments 5.181,60
Solidarity 156,09

The main difference is how little tax the low earners in Ireland pay

You are leaving out the mandatory health insurance which whacks on another 5% or so. Also leaving out church tax (1% ), which is necessary if you ever want to use a church in Germany.

On the other hand, people in the former DDR don't pay the solidarity tax.

hmmm

PRSI is a tax as far as most workers are concerned. As the Jester says, the undertaxation is of lower paid workers, the middle and upper middle class are paying over 50% of their income and receiving little in return.

later12

hmmm wrote: »

PRSI is a tax as far as most workers are concerned. As the Jester says, the undertaxation is of lower paid workers, the middle and upper middle class are paying over 50% of their income and receiving little in return.

I presume this is on the basis of the "benefits recived principle"?

The problem with that is that high earners do also enjoy benefits of the less salient public goods and services ; an educated labour force, low crime, and other outcomes which the better off may find especially valuable, but which may be particularly hard to quantify.

The "benefits received" principle belongs at the box office at the Abbey or at the admission to a sporting fixture ; not as a reliable guiding principle for revenue collection.

Furthermore, if you look at the effective PAYE rates table, it appears unlikely that middle income earners are in fact paying a 50% tax rate, including PRSI.

jester77

srsly78 wrote: »

You are leaving out the mandatory health insurance which whacks on another 5% or so. Also leaving out church tax (1% ), which is necessary if you ever want to use a church in Germany.

On the other hand, people in the former DDR don't pay the solidarity tax.

The mandatory health insurance is included under social payments and I left out church tax as it's optional. I can include it if it gets added in the next Irish budget

The original post was about the level of PAYE that is being paid. If you do a like with like comparison to Germany just on income tax then you can see that there is very little difference at higher levels of pay, but once you look at lower levels of pay then there is quite a substantial difference between how much tax a lower paid German person pays compared to an Irish person.

Manach

Just need to find the sweet spot for work/life balance, in that there is no point striving to be too well paid, as the excess gets creamed off by the State to fund their re-election campaigns.

srsly78

jester77 wrote: »

The mandatory health insurance is included under social payments and I left out church tax as it's optional. I can include it if it gets added in the next Irish budget

The original post was about the level of PAYE that is being paid. If you do a like with like comparison to Germany just on income tax then you can see that there is very little difference at higher levels of pay, but once you look at lower levels of pay then there is quite a substantial difference between how much tax a lower paid German person pays compared to an Irish person.

Health insurance isn't so simple there. It's a fixed % for most people, but higher earners can choose their own scheme for a fixed amount.

Church tax is indeed optional, but most people pay it.

Dob74

hmmm wrote: »

PRSI is a tax as far as most workers are concerned. As the Jester says, the undertaxation is of lower paid workers, the middle and upper middle class are paying over 50% of their income and receiving little in return.

the top rate of income tax is 41%. With all the loop holes no one actually has to pay the 41%.
Low, middle, high income earners pay the same percentage in vat.
With subsidised fee paying schools, free college middle to high income earners get there fair share back.
Rent allowance is free money to landlords and hurts private renters generally low income earners.

hmmm

later12 wrote: »

an educated labour force

We fare poorly on the OECD league tables.

, low crime

Is that thanks to the government & the taxes we pay, or thanks to society itself?

The "benefits received" principle belongs at the box office at the Abbey or at the admission to a sporting fixture ; not as a reliable guiding principle for revenue collection.

Perhaps. Certainly since tax has begun to be seen as less the process of raising revenue to fund essential government services, and more as a form of redistributive social engineering, that point has been made. I don't have to agree with it.

Furthermore, if you look at the effective PAYE rates table, it appears unlikely that middle income earners are in fact paying a 50% tax rate, including PRSI.

Most European countries have a sliding scale of tax rates, in those places with a flat tax the level is much lower than 50%. The question is "do we pay too much income tax", to which the only answer is "a relatively small group of the population who pay tax at the higher marginal rate do, and those at low incomes don't".

barneystinson

Dob74 wrote: »

the top rate of income tax is 41%. With all the loop holes no one actually has to pay the 41%.

Are you kidding?! Loads of people pay tax at 41% - in fact the vast majority of all income tax collected is from money taxed at 41%.

ninty9er

Short answer to the original question: No

Long answer: No, if we want services maintained; yes, if we want to get them privately at market value.

srsly78

barneystinson wrote: »

Are you kidding?! Loads of people pay tax at 41% - in fact the vast majority of all income tax collected is from money taxed at 41%.

Yes but remember that 50% of all paye workers pay no tax (because of credits etc). So yeah the vast majority of people don't pay the marginal rate. And the other poster is right about all the "loopholes". Pension contributions for example aren't a loophole, but are the easiest way to get tax relief.

thebman

jester77 wrote: »

Here's a comparison to German figures for a similar person:

€100000
Income Tax 30.305,00
Social Payments 11.919,96
Solidarity 1.666,77

€50000
Income Tax 9.895,00
Social Payments 9.976,32
Solidarity 544,22

€25000
Income Tax 2.838,00
Social Payments 5.181,60
Solidarity 156,09

The main difference is how little tax the low earners in Ireland pay

Low earners can't pay more or they will be better off on the dole after deducting cost of getting to work in many areas.

srsly78

The dole in Germany works differently from here. Initially it gives % of former income, before tapering off to subsistence levels for the longterm unemployed.

http://en.wikipedia.org/wiki/Hartz_concept#Hartz_IV

Welfare here will be reduced in the next budget, and taxes raised. Welfare should not be more attractive than employment.

Dannyboy83

Do we pay too much income tax?
Yes and No.

My current thinking is that:
We pay too much tax at low thresholds.
We pay too little at high thresholds.


As Ronan Lyons pointed out - the marginal rate on income is 52%, at low thresholds in Ireland, when compared internationally, 50%.
Given the low threshold and the fact that we are paying down debt faster than most other countries, it's little wonder why the domestic economy has imploded.

After tax is paid, costs of living are paid, and debt is repaid - there is nothing left for spending (hardly a shock, it's been in the papers numerous times now).


One approach might be to add a third band with an SRCOP @ €50,000, and reduce the middle band
A> 20% first band
B> 35% after first SRCOP and up to second SRCOP
C> 60% above second SRCOP €50,000



As later12 pointed out, any exercise in comparing our taxes to those of other jurisdictions is going to be highly flawed unless one arrives at a method of accurately comparing the benefits that accrue to individuals on foot of taxes paid in terms of public goods & services.

German and Irish tax rates are comparable, but childcare costs are not, healthcare costs are not, rents are not etc.

In Sweden, they pay high tax rates, but a large remained of their net income is discretionary. It's the reverse situation to Ireland.
In Ireland, only a small portion of the net income is discretionary.


It's very interesting, as an Irish person, to read the tips which are posted on exchange boards about moving to Ireland.

later12

hmmm wrote: »

We fare poorly on the OECD league tables.

Ah yes but that's not the issue here. One can quite justifiably argue that public expenditure does not procure public goods & services of a desirable quality, using relevant data, such as PISA or OECD league tables or whatever else.

That still doesn't vindicate the use of the benefits received principle as a useable guide for the state's revenue collection because it doesn't deal with the difficulty in quantifying the benefits that fall collectively upon society and which may be particularly valued by the better off.

Now moving onto ability to pay, we have a more legitimate debate between vertical equity & horizontal equity, which is where I think you were going by referencing a flat tax; this is getting into the ethics of redistribution, which is largely ideological anyway. But I should think that most reasonable individuals should at least be keen to shy away from the more outdated benefits received principle.

Most European countries have a sliding scale of tax rates, in those places with a flat tax the level is much lower than 50%.

But if you look at our effective rates in this jurisdiction, they too are much lower than 50%, I think it would be just fascinating to learn how many individuals actually pay 50% effective.

The question is "do we pay too much income tax", to which the only answer is "a relatively small group of the population who pay tax at the higher marginal rate do, and those at low incomes don't".

But how have you arrived at the conclusion that there is an excess burden on those at the higher marginal rate; what criteria are you using to arrive at that? Show us your rough work, not just your bottom line.

Geuze

later12 wrote: »

But if you look at our effective rates in this jurisdiction, they too are much lower than 50%, I think it would be just fascinating to learn how many individuals actually pay 50% effective.

None.

Count Dooku

later12 wrote: »

But if you look at our effective rates in this jurisdiction, they too are much lower than 50%, I think it would be just fascinating to learn how many individuals actually pay 50% effective.

a) effective rates from your table doesn't include USC and PRSI
b) difference between real rates and effective rates just shows that there are too many tax breaks available, as result increasing tax rates will hit more PAYE rather than rich

later12 wrote: »

But how have you arrived at the conclusion that there is an excess burden on those at the higher marginal rate; what criteria are you using to arrive at that? Show us your rough work, not just your bottom line.

over reliance on tax burden on rich could cause a lot when a lot of them will decide to move to tax heavens, so tax take will drop significantly

later12

Count Dooku wrote: »

a) effective rates from your table doesn't include USC and PRSI

Sigh, yes I have been saying this throughout, any reference to the table has been to PAYE rates

later12 wrote: »

it's from the most up-to-date revenue statistics and indicates the effective income tax rates excluding PRSI & the USC.

However, even looking at that table, we're still a long way off 50%, and it appears unlikely that PRSI and the USC would get most PAYE earners anywhere near to that either.

I'm not denying the second aspect of your post, I'm not suggesting we increase PAYE; I'm simply saying that someone who says they are paying 50% of their salary in PAYE is probably not being honest.

Count Dooku

Ireland has higher Effective Income Tax and Social Security Rates on USD100,000 of Gross Income than Sweden and Norway with less result from it
http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/individual-income-tax-social-security-rate-survey-September-2011.pdf

Farmer Pudsey

relax carry on wrote: »

I've been reading several threads over the past few months with multiple posters complaining that we pay too much tax.
Just as an exercise, I did some calculations on three sets of income based on 2012 rates etc. It's PAYE workers only, (sorry self employed)

Results are below on a yearly income of €100000, €50000 and €25000 based on single paye worker with no additional reliefs etc. Now the PAYE is the only one I'd say is "tax" but at the end of the day they are all a deduction in your take home pay so PRSI and USC are included.

€100000
PAYE 30812
USC 6319
PRSI class A 3736
Total €40867 or roughly 41% of total.

€50000
PAYE 10312
USC 2818
PRSI Class A 1736
Total €14866 or roughly 30% of total

€25000
PAYE 1700
USC 1068
PRSI Class A 735
Total €3503 or roughly 14%

It's just an exercise and I know everyones situation is unique to them but do you think that we pay too much or too little income tax? Have a look at your payslip and work out what percentage "tax" you are actually paying.

Disclaimer: These were all manually worked out but I'm sure that they are correct. Hopefully I'm not missing something obvious. Be kind.

jester77 wrote: »

Here's a comparison to German figures for a similar person:

€100000
Income Tax 30.305,00
Social Payments 11.919,96
Solidarity 1.666,77

€50000
Income Tax 9.895,00
Social Payments 9.976,32
Solidarity 544,22

€25000
Income Tax 2.838,00
Social Payments 5.181,60
Solidarity 156,09

The main difference is how little tax the low earners in Ireland pay

No the main difference is that in Germany workers have a free health care system, preschool, primary, and post primary education. They have not got the excessive taxes on car that we do. They have a proper public transport sustem. There politicians and PS do not swallow up all the revenue as wages and do not have an overgenerous welfare system. Also they are paying a reunification tax this is the solidarity tax I think.

jester77

Farmer Pudsey wrote: »

No the main difference is that in Germany workers have a free health care system, preschool, primary, and post primary education. They have not got the excessive taxes on car that we do. They have a proper public transport sustem. There politicians and PS do not swallow up all the revenue as wages and do not have an overgenerous welfare system. Also they are paying a reunification tax this is the solidarity tax I think.

We were comparing income tax and not social contributions. Germany does not have free healthcare, every single person has to pay mandatory health insurance at around 15% of their income with employers contributing half of that to cover the costs of healthcare. I am not familiar with their education system. Petrol/diesel costs a lot more here than in Ireland, TUV is expensive here, so costs are swallowed up in other areas.

The welfare system here was generous and Germany was running out of money with unemployment increasing. Germany clamped down on the system, overhauled it and introduced the Hartz reforms which did not have generous handouts. Unemployment quickly decreased after that, Ireland needs to act.

Geuze

Note that in many continental countries, social insurance is wayhigher than the 4% PRSI we pay here.

Irl = 4%

UK = 11%


Germany

Pension insurance = 19.6% in total, about half paid by worker,it seems to be 9.8%

Health ins = 15.5% with 8.2% of wage paid by worker

Unemployment ins = 3%, worker pays half

Long-term care ins = 1.95%, half paid by worker means 0.975% +0.25% if you don’t have children = 1.225%

http://www.deutschesozialversicherung.de/en/guide/introduction.html


Rough calculations

Pension = 9.8

Health = 8.2

Un = 1.5

LT care = 1.225

Total social insurance = 20.725% of gross wages, before income tax

Count Dooku

Geuze wrote: »

Note that in many continental countries, social insurance is wayhigher than the 4% PRSI we pay here.

Irl = 4%

UK = 11%


Germany

Pension insurance = 19.6% in total, about half paid by worker,it seems to be 9.8%

Health ins = 15.5% with 8.2% of wage paid by worker

Unemployment ins = 3%, worker pays half

Long-term care ins = 1.95%, half paid by worker means 0.975% +0.25% if you don’t have children = 1.225%

http://www.deutschesozialversicherung.de/en/guide/introduction.html


Rough calculations

Pension = 9.8

Health = 8.2

Un = 1.5

LT care = 1.225

Total social insurance = 20.725% of gross wages, before income tax

Then private pension and private health insurance in Ireland must be included in taxes

Geuze

I see what you're saying.

I don't know how much of a pension their public pension system pays out to each worker.

I feel it's maybe more than our SP of 230pw, but maybe not a lot more.

Their UHI would not guarantee you a private room in a hosp, AFAIK, but, yes, it does pay for primary care and there aren't long waiting lists.

Dannyboy83

http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=Germany&country2=Ireland

Count Dooku

Geuze wrote: »

I see what you're saying.

I don't know how much of a pension their public pension system pays out to each worker.

AFAIK, it pays 70% of net income

srsly78

And is currently being reformed because it is creaking under the strain of an aging population.

Farmer Pudsey

jester77 wrote: »

We were comparing income tax and not social contributions. Germany does not have free healthcare, every single person has to pay mandatory health insurance at around 15% of their income with employers contributing half of that to cover the costs of healthcare. I am not familiar with their education system. Petrol/diesel costs a lot more here than in Ireland, TUV is expensive here, so costs are swallowed up in other areas.

The welfare system here was generous and Germany was running out of money with unemployment increasing. Germany clamped down on the system, overhauled it and introduced the Hartz reforms which did not have generous handouts. Unemployment quickly decreased after that, Ireland needs to act.

Germany is not as car dependant as Ireland they mostly use there cars for social and domestic reasons you have good quality public transport to carry you to work for a reasonable price and yes there fuel may be more expensive but the level of VRT and car tax is extrordinarty in Ireland.

Add the price of Health Insurance that Irish people pay and that there is no Free GP services for family's who have to pay about twice the private rate in contintal europe as well extortinate rate's for perscriptions.

And yes rates of tax for low paid in ireland is low but it is the failure of government to control public service wages and welfare rates is the bigges problem we have.

later12

Count Dooku wrote: »

Ireland has higher Effective Income Tax and Social Security Rates on USD100,000 of Gross Income than Sweden and Norway with less result from it
http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/individual-income-tax-social-security-rate-survey-September-2011.pdf

According to the chart, we're 11th in the EU15 for how we tax those on a salary equivalent to $100,000, and also 11th in the EU.

That's hardly damning, don't you agree?

Farmer Pudsey

later12 wrote: »

According to the chart, we're 11th in the EU15 for how we tax those on a salary equivalent to $100,000, and also 11th in the EU.

That's hardly damning, don't you agree?

But the level of public sercices that workers recieve is alot less than the EU average. Health,childcare, education, transport etc.

As well as that indirect taxs such as vat, car taxes and the way because we have higher base prices for thes they effect us more

Count Dooku

later12 wrote: »

Count Dooku wrote: »

Ireland has higher Effective Income Tax and Social Security Rates on USD100,000 of Gross Income than Sweden and Norway with less result from it
http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/individual-income-tax-social-security-rate-survey-September-2011.pdf

According to the chart, we're 11th in the EU15 for how we tax those on a salary equivalent to $100,000, and also 11th in the EU.

That's hardly damning, don't you agree?

Greece, Portugal, Italy have higher effective rates and it didn't help them. Main problem is not in taxation, bit in spending

later12

Count Dooku wrote: »

Greece, Portugal, Italy have higher effective rates and it didn't help them. Main problem is not in taxation, bit in spending

Of course it is, I agree with that.

But I'm not sure why you're singling out Greece, Italy, and Portugal when equally, Germany, France, Austria, Finland, The Netherlands and Belgium also have higher effective rates, and it doesn't appear to be doing them any damage. In terms of Western Europe, we're down the bottom of the scale; overall in Europe, we're in the middle.

We're talking about taxing a salary equivalent USD$100,000, a far cry from the minimum or Average Industrial Wage. So I still don't quite perceive the point you're trying to make with this chart.

Dannyboy83

Count Dooku wrote: »

Ireland has higher Effective Income Tax and Social Security Rates on USD100,000 of Gross Income than Sweden and Norway with less result from it
http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/individual-income-tax-social-security-rate-survey-September-2011.pdf

Very interesting report.

Two points stand out clearly
A) We are already in the upper leagues in terms of taxation - it's just that we have one of the most progressive tax systems in Europe, which is probably what feeds the 'low tax' myth.

The services we receive are badly out of sync with our tax levels, which is all the more damning considering Irish consumers pay twice (taxation charge + consumption charge) vs. Socialist countries where the consumer pays once (taxation)

.
.
.
Where is all this money going?

later12

Dannyboy83 wrote: »

Very interesting report.

Two points stand out clearly
A) We are already in the upper leagues in terms of taxation - it's just that we have one of the most progressive tax systems in Europe, which is probably what feeds the 'low tax' myth.

The services we receive are badly out of sync with our tax levels, which is all the more damning considering Irish consumers pay twice (taxation charge + consumption charge) vs. Socialist countries where the consumer pays once (taxation)

I have read the report and am genuinely curious as to where it was in the report that you derived these points?

Specifically, how are we "in the upper leagues in terms of taxation"? Ireland is 11th out of 15 Western European states for the tax burden it places on workers earning the equivalent of $100,000.

Furthermore, the report says nothing about benefits which fall on the taxpayer as a result of this taxation; where are you getting this?

K-9

Geuze wrote: »

Note that in many continental countries, social insurance is wayhigher than the 4% PRSI we pay here.

Irl = 4%

UK = 11%

We do pay the Social Charge which should go towards social expenditure like PRSI but instead just seems to be another tax.

K-9

Dannyboy83 wrote: »

.
Where is all this money going?

Looking at what we raise and spend, nearly all of our taxes go on Welfare payments and the pay bill. That's where it goes, hence the cuts in services we are all seeing.

Dannyboy83

later12 wrote:

Specifically, how are we "in the upper leagues in terms of taxation"? Ireland is 11th out of 15 Western European states for the tax burden it places on workers earning the equivalent of $100,000.

Refer to this this graph on Page 19 (Highest Rates of Personal Income Tax)


We are in the second tier. (41-50%)
There are three countries in the first tier.

I would be interested to hear you explain how you consider this not to be the upper league.

Do you believe we have we been categorized incorrectly?

srsly78

Because take a look at all the countries below us, they are all tiny islands, or underdeveloped former communist countries. Wages there are very much lower than here (tax haven islands aside). Note the other poster said WESTERN EUROPEAN.

Also note that Ireland just barely falls into the 41-50 bracket.

(and yeah I know we are a tax haven island too )

Dannyboy83

srsly78 wrote: »

Because take a look at all the countries below us, they are all tiny islands, or underdeveloped former communist countries. Wages there are very much lower than here (tax haven islands aside). Note the other poster said WESTERN EUROPEAN.

Also note that Ireland just barely falls into the 41-50 bracket.

(and yeah I know we are a tax haven island too )

I think average wages in almost all countries worldwide are lower than average public sector wages here:

http://www.breakingnews.ie/ireland/average-public-sector-earnings-up-28-564832.html

The latest report from the CSO shows that the average weekly wage in the public sector at the end of June this year was €918.99, while the average for private sector workers was €611.66.

I don't understand how Ireland is a special case.
Is it in the bracket? / Is it barely in the bracket?
Barely in the bracket is still in the bracket, is it not?

As I said, we have a very progressive system.
Low earners pay considerably less, higher earners pay considerably more.

This is where the myth of Ireland as a "low tax country" originates from.

The tax burden on single high income earners in Ireland is actually above the OECD average



It seems like posters are clutching are straws to portray us as a lower tax country and ignoring the facts actually prove otherwise. What is the logic behind this?

srsly78

You just posted a chart that shows we have the lowest marginal rate in western europe -.-

I worked abroad (uk, belgium, germany), and I can tell you that Ireland+UK are low tax countries. UK is actually slightly lower than us for high earners. I quit my job in Germany because it was just crazy how much they were taking off me. (Belgium is even worse...)

And it is valid to compare us against western europe because we can all freely work there. For many OECD countries we would need visas. Sure we could also go to Eastern Europe and pay very low tax, but very few people willingly do that because of the low salaries.

later12

Dannyboy83 wrote: »

Refer to this this graph on Page 19 (Highest Rates of Personal Income Tax)


We are in the second tier. (41-50%)
There are three countries in the first tier.

I would be interested to hear you explain how you consider this not to be the upper league.

Do you believe we have we been categorized incorrectly?

Ah I see, you're talking about the rate.

Actually, there are only 9 EU states behind us in terms of the marginal rates. Mostly because they have flat rates anyway.

We are part of a group of 12 EU states with similar rates and 3 with even higher rates. In Europe, this certainly doesn't put us in "the Upper Leagues".

Furthermore, a quick examination of the effective rates as posted earlier demonstrates that the Irish case is not particularly harsh at all.

Now if you can answer my second question; the report says nothing about benefits which fall on the taxpayer as a result of this taxation; where are you getting this?

Dannyboy83

later12 wrote: »

Ah I see, you're talking about the rate.

Actually, there are only 9 EU states behind us in terms of the marginal rates. Mostly because they have flat rates anyway.

We are part of a group of 12 EU states with similar rates and 3 with even higher rates. In Europe, this certainly doesn't put us in "the Upper Leagues".

FPMSL!:D

That is some of the most wonderful reasoning I've ever read on here.

There are 47 countries in Europe.
There are 3 countries in the top tier of taxation.
In the second tier, there are 12 countries. We are one of those countries.

May I ask you, where does the Upper League start in your version of the tax leagues? :rolleyes: