Sole breadwinner tax is unconstitutional

s7ryf3925pivug

A sole breadwinner pays significantly more tax on their earnings than a couple who both earn half as much.

As well as being clearly unfair, this is not ideal for families as the literature shows benefits to the child if they have a stay at home parent in the first years.

It also turns out to be unconstitutional, since the Irish constitution recognises the contribution of women in the home.

In particular, the State recognises that by her life within the home, woman gives to the State a support without which the common good cannot be achieved.
The State shall, therefore, endeavour to ensure that mothers shall not be obliged by economic necessity to engage in labour to the neglect of their duties in the home.

https://www.google.ie/amp/www.thejournal.ie/irish-constitution-womans-place-3275347-Mar2017/%3famp=1

There is an upcoming referendum on this in the context of it being sexist. And yes we're not in the 70s any more and a stay at home dad is just as valuable as a stay at home mom. Fully agree it should be updated.

But personally I'm more interested in the angle that surely this means the current tax system should be changed. It does not support stay at home moms (or dads) to unfairly tax a sole breadwinner supporting them.

slavetothegrind

What?

Jimmy Dags

What about those on the rock and roll who get the four bed house by having 3 kids?

Try_harder

There is a tax credit for stay at home parents

s7ryf3925pivug

Try_harder wrote: »

There is a tax credit for stay at home parents

It does not make up the difference between sole breadwinner taxes and dual income families earning the same amount.
Though it does explain why I've been getting a bit more in my payslip recently.

s7ryf3925pivug

Jimmy Dags wrote: »

What about those on the rock and roll who get the four bed house by having 3 kids?

Well I'm obviously not talking about them here.

Pretty sure this forum has an established consensus about them already.

s7ryf3925pivug

slavetothegrind wrote: »

What?

John is a sole breadwinner who earns 60k. He and his wife get over 5k less a year than their neighbours Jane and Joe who both work and have salaries of 30k

Guy:Incognito

Lachlan Great Triangle wrote: »

John is a sole breadwinner who earns 60k. He and his wife get over 5k less a year than their neighbours Jane and Joe who both work and have salaries of 30k

Jane and Joe are doing twice as much work.

YFlyer

Lachlan Great Triangle wrote: »

John is a sole breadwinner who earns 60k. He and his wife get over 5k less a year than their neighbours Jane and Joe who both work and have salaries of 30k

Jane and Joe have to pay for child support.

Jimmy Dags

Guy:Incognito wrote: »

Jane and Joe are doing twice as much work.

Jane is hot.

Guy:Incognito

Jimmy Dags wrote: »

Jane is hot.

Stripping is still work.

s7ryf3925pivug

Guy:Incognito wrote: »

Jane and Joe are doing twice as much work.

No they're lazy bollixes.

Guy:Incognito

Lachlan Great Triangle wrote: »

No they're lazy bollixes.

Seems to me they are working 80 hours a week between them. If they were lazy they'd work less. Or not at all.

s7ryf3925pivug

Guy:Incognito wrote: »

Jane and Joe are doing twice as much work.

I find looking after a baby to be more work than my actual work.

Jimmy Dags

Lachlan Great Triangle wrote: »

I find looking after a baby to be more work than my actual work.

Are you a stripper by trade?

Fighting Tao

Lachlan Great Triangle wrote: »

A sole breadwinner pays significantly more tax on their earnings than a couple who both earn half as much.

As well as being clearly unfair, this is not ideal for families as the literature shows benefits to having a stay at home parent in the first years.

It also turns out to be unconstitutional, since the Irish constitution recognises the contribution of women in the home.

https://www.google.ie/amp/www.thejournal.ie/irish-constitution-womans-place-3275347-Mar2017/%3famp=1

There is an upcoming referendum on this in the context of it being sexist. And yes we're not in the 70s any more and a stay at home dad is just as valuable as a stay at home mom. Fully agree it should be updated.

But personally I'm more interested in the angle that surely this means the current tax sustem should be changed. It does not support stay at home moms (or dads) to unfairly tax a sole breadwinner supporting them.

So when are you in the high court to argue this? I could do with a laugh.

Guy:Incognito

Lachlan Great Triangle wrote: »

I find looking after a baby to be more work than my actual work.

Quit and find an employer to pay you for doing a job so.

Jobs pay money. Raising your own kids doesn't. Such is life.

What if a couple has no kids and one is just a layabout?

irishrebe

Lachlan Great Triangle wrote: »

Guy:Incognito wrote: »

Jane and Joe are doing twice as much work.

I find looking after a baby to be more work than my actual work.

Who forced you to have one?

Jimmy Dags

irishrebe wrote: »

Who forced you to have one?

Accidents happen in bed.

s7ryf3925pivug

irishrebe wrote: »

Who forced you to have one?

What are you on about. I have a good job. Sometimes I look after my kid too.

368100

Jimmy Dags wrote: »

Accidents happen in bed.

Theres special pants for that ;-)

Conservatory

People “living in sin” but who have families together also can’t avail of these tax credits which annoys the hell out of me.

kneemos

Guy:Incognito wrote: »

Jane and Joe are doing twice as much work.

John.
Who's Joe now?

ceadaoin.

Guy:Incognito wrote: »

What if a couple has no kids and one is just a layabout?

If they are both happy with the setup then so what? Not everyone wants to or is able to work.

Peatys

Lachlan Great Triangle wrote: »

I find looking after a baby to be more work than my actual work.

What were you doing before? Anything you can do in your pj's can't be that hard.

Don't bullshít a bullshítter, we've two kids and once they have their 3 squares and snacks during the day, they're handy to look after once you get past the first few months.

I give you Bill Burr...

https://www.youtube.com/watch?v=QoJrMaFlxOk

Peregrinus

Lachlan Great Triangle wrote: »

John is a sole breadwinner who earns 60k. He and his wife get over 5k less a year than their neighbours Jane and Joe who both work and have salaries of 30k

That's because tax is assessed per individual, not per household.

It's a feature of having a progressive income tax (i.e. one in which tax rates go up, the more you earn). With such a system it will always be the case that an individual (or a group of individuals) earning a given amount will pay more tax than a larger groups of individuals who, between them, earn the same amount.

s7ryf3925pivug

Peregrinus wrote: »

That's because tax is assessed per individual, not per household.

It's a feature of having a progressive income tax (i.e. one in which tax rates go up, the more you earn). With such a system it will always be the case that an individual (or a group of individuals) earning a given amount will pay more tax than a larger groups of individuals who, between them, earn the same amount.

Spouses are usually jointly assessed though, so it is in fact two people being assessed whether or not both are working.

Peregrinus

Lachlan Great Triangle wrote: »

Spouses are usually jointly assessed though, so it is in fact two people being assessed whether or not both are working.

Yes, but there are in fact two of them.

Are you asking for a single person to be assessed as though he were two people?

s7ryf3925pivug

Peregrinus wrote: »

Yes, but there are in fact two of them.

Are you asking for a single person to be assessed as though he were two people?

A couple are jointly assessed. Ie two people are assessed together. What bit are you not getting here because I can't put it more simply

Accidentally

Jane should dump Joe for John.

WoollyRedHat

Brexit means brexit. The rule is bread tomorrow and bread yeasterday bit never bread today. Now what was the question again?

robarmstrong

Accidentally wrote: »

Jane should dump Joe for John.

But Joe and John have a history from that one night in Coppers that went a bit mad.

Peregrinus

Lachlan Great Triangle wrote: »

A couple are jointly assessed. Ie two people are assessed together. What bit are you not getting here because I can't put it more simply

I realise that.

Maybe take a step back. We have two couples:

- A + B, where X earns 30k and Y also earns 30k

- X + Y, where A earns 60k and B earns nothing

It will make no difference to A + B whether they elect for joint assessment or separate assessment; their total tax bill will be the same in either case.

It does make a difference to X + Y; their total tax bill will be significantly lower if they elect for joint assessment than if they elect for separate assessment. But, even if they elect for joint assessment, their bill will still be higher than A + B's bill.

Obviously, joint assessment isn't the problem here. X + Y have joint assessment, but they still have the larger tax bill. Why?

There are two reasons:

First, non-working Y doesn't get an employee tax credit because, duh, they're not an employee. Since Y doesn't have this tax credit, X can't make use of it even with joint assessment.

Secondly, non-working Y can't transfer their earned income tax credit because, by statute, it's not transferrable.

I think your beef is mainly with the last bit. The existence of this credit goes back ultimately to a budget measure of Charlie McCreevy's in 1999 ("individualisation of tax bands", it was called then) intended to incentivise greater participation in the workforce by women. While undoubtedly other factors were in operation as well, there's no doubt that female participation in the workforce did rise following this measure, with a corresponding increase in productivity.

Am I right in thinking that this is the bit you object to, and regards as possibly unconstitutional?

vicwatson

“Moms” ??

irelandrover

Wouldn't you have to address childcare costs also for it to be fair?

Odyssey 2005

I've just read 3pages of this...and my head hurts.

kneemos

Accidentally wrote: »

Jane should dump Joe for John.

I predict a row at the reception.

Peregrinus

irelandrover wrote: »

Wouldn't you have to address childcare costs also for it to be fair?

Well, at the moment childcare costs aren't addressed for either couple so, if it's unfair in that respect, it's at least level-playing-field unfair, so to speak.

irelandrover

Peregrinus wrote: »

Well, at the moment childcare costs aren't addressed for either couple so, if it's unfair in that respect, it's at least level-playing-field unfair, so to speak.

The couple with the stay at home parent doesnt have childcare costs. If you address the tax issue so that both a 1 salary couple and 2 salary couple earn the same after tax you have a big gap in actual disposable money. As one will have large childcare costs.

irishrebe

Lachlan Great Triangle wrote: »

irishrebe wrote: »

Who forced you to have one?

What are you on about. I have a good job. Sometimes I look after my kid too.

So why are you bleating about it like a martyr? There are already plenty of tax breaks and benefits for people with children.

s7ryf3925pivug

Peregrinus wrote: »

Am I right in thinking that this is the bit you object to, and regards as possibly unconstitutional?

Right

irelandrover wrote: »

Wouldn't you have to address childcare costs also for it to be fair?

Tax relief on childcare costs sounds reasonable to me if individualisation was reversed.

Aside from fairness, the main point I was making was that it is unconstitutional.

The constitution states the following:

In particular, the State recognises that by her life within the home, woman gives to the State a support without which the common good cannot be achieved.
The State shall, therefore, endeavour to ensure that mothers shall not be obliged by economic necessity to engage in labour to the neglect of their duties in the home.

Ignoring the 1970s wording, I think it's fair to say that both parents often are forced to work by economic necessity. Specifically the uneven taxation I've described often results in an "economic necessity to engage in labour" for both parents.

Peregrinus

irelandrover wrote: »

The couple with the stay at home parent doesnt have childcare costs. If you address the tax issue so that both a 1 salary couple and 2 salary couple earn the same after tax you have a big gap in actual disposable money. As one will have large childcare costs.

Only if they have children requiring childcare, obviously. There'd be quite a lot of working couples who either don't have children, or whose children are old enough not to require expensive childcare arrangements. There's a real crunch, obviously, for people with young children.

The OP makes the point, right back at the beginning of the thread, that it may actually be better for those children (and, in the long term, for society at large) that they be cared for at home by their own parents, and therefore a regime which offered support to parents who pay for childcare, but no support for parents who sacrifice work opportunities to care for their own children, may actually be distorting choices in a detrimental way.

The optimal arrangement may be to provide both supports - tax credits/deductions for childcare costs; generous paid parental leave/social welfare supports for stay-at-home parents - and let parents make whichever choice they feel is best for them and their children. But that, of course, would be expensive.

techdiver

Ok, trying to sift though the bull**** responses, there is actually a point here. Prior to 2000 single income households were better off in Ireland than they are now. Then tax individualisation was brought in under the guise of "helping" women back into the workforce. Of course people took it hook line and sinker.

So now if one parent actually wants to raise their own kids at home the family is penalised by the taxation system.

JCX BXC

Lachlan Great Triangle wrote: »

, I think it's fair to say that both parents often are forced to work by economic necessity. Specifically the uneven taxation I've described often results in an "economic necessity to engage in labour" for both parents.

Yano what, I fully agree here.

We always harp on about how economically developed and well off we are nowadays compared to the last century, but just look back to the 70's, when that bill was made, and you'll find families survived with only 1 income. Try do that in most places now and you'll probably find survival very difficult. Both parents now generally have to work, especially in the GDA where house prices are....a little pricey let's say.

Can we really say this is fine, normal and simply progression from our ways in the 70's?

lion_bar

irelandrover wrote: »

The couple with the stay at home parent doesnt have childcare costs. If you address the tax issue so that both a 1 salary couple and 2 salary couple earn the same after tax you have a big gap in actual disposable money. As one will have large childcare costs.

The 2 salary couple pay less tax so that can that not go to cover their childcare cost?

Childcare costs fall dramatically when most kids go off to school so in the couple with a single income are again behind.

While Charlie mccreevy's tax individualisation caused this change, the impact of USC on the single earner is a factor.
This didn't exist when tax individualisation was brought in and I don't believe it is transferable between couples.

perhaps an accountant on here could give some analysis of that on the op's two couples?

King of Kings

OP has a very valid point.

being writing to to TDs about this for a.while.
blame charlie mcCreevy cos he brought in individualisation.
Its very unfair on single income families.

"when I have it, I spend it" Charlie said.
What a chancer.

tigerboon

The couple with the stay at home parent doesnt have childcare costs.
Would you not consider the wage they forego, in order to raise their kids, to be their childcare costs? A lot of the time, with a number of kids, it doesn't pay to work when childcare, running a car and all the other expenses are taken into consideration

irelandrover wrote: »

Peregrinus wrote: »

Well, at the moment childcare costs aren't addressed for either couple so, if it's unfair in that respect, it's at least level-playing-field unfair, so to speak.

The couple with the stay at home parent doesnt have childcare costs. If you address the tax issue so that both a 1 salary couple and 2 salary couple earn the same after tax you have a big gap in actual disposable money. As one will have large childcare costs.

Would you not consider that at least a large proportion of the wage that the stay at home parent foregoes to be the childcare costs?

.

irelandrover

lion_bar wrote: »

The 2 salary couple pay less tax so that can that not go to cover their childcare cost?

Childcare costs fall dramatically when most kids go off to school so in the couple with a single income are again behind.

While Charlie mccreevy's tax individualisation caused this change, the impact of USC on the single earner is a factor.
This didn't exist when tax individualisation was brought in and I don't believe it is transferable between couples.

perhaps an accountant on here could give some analysis of that on the op's two couples?

Isnt that what the OP is proposing to change?

Peregrinus

lion_bar wrote: »

The 2 salary couple pay less tax so that can that not go to cover their childcare cost?

It won't go very far towards it, though. The couple where both are working but paying for childcare will still be down, if we take tax and childcare costs together

lion_bar wrote: »

Childcare costs fall dramatically when most kids go off to school so in the couple with a single income are again behind.

And this points to what may be the real problem. If one partner - nearly always a a woman - takes time out from work to care for young children, and there are a couple of children, and she doesn't go back until the youngest of them is safely in school, there's a lifelong hit to her earning capacity and, therefore, her earnings. On average, she suffers an earnings disadvantage from which she never fully recovers.

I don't think that's a problem that can be solved by tinkering with the tax system. If you really want couples to be able to make this choice, then you need to consider doing some fairly radical things in the workplace, both in terms of rules and regulations regarding parental leave and, more importantly, in terms of culture and attitudes regarding working parents and their careers.

techdiver

Peregrinus wrote: »

I don't think that's a problem that can be solved by tinkering with the tax system. If you really want couples to be able to make this choice, then you need to consider doing some fairly radical things in the workplace, both in terms of rules and regulations regarding parental leave and, more importantly, in terms of culture and attitudes regarding working parents and their careers.

It's not as much "tinkering with the tax system", more like reversing a retrograde step that was taken with tax individualisation.

King of Kings

lion_bar wrote: »

The 2 salary couple pay less tax so that can that not go to cover their childcare cost?


perhaps an accountant on here could give some analysis of that on the op's two couple?

one
childcare costs arent the remit of revenue, in favt they dont give a f what you spend the cash on once you pay the tax.
And not every couple has childcare costs.

Two
Accountants are generally useless unless you are as rich as Bono they cant save you much.
They do the books , scratch their chins saying "oh...revenue mightnt like that..ohhhhh" and never offer any advice unless you ask them a direct question to which the reply is usually..."hmmm its depends" and/or " revenue mightnt like that"..
In their defence for the average person with non-bono wealth there isnt much scope for tax avoidance in ireland.