Sole breadwinner tax is unconstitutional

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.

Yeah, I think that unrelenting Thatcherite fúcktard Harney and her soulmate in rightwing "No such thing as society" Thatcherism in Ireland, Charlie McCreevy, changed Irish tax law in 2000 to reward parents who abandon their children to childcare and instead go out and do "proper" work and make a "proper" contribution to society rather than do that unimportant doss joke "job" of... raising children.

I give it 2058 before people alive in 2018 realise how much society today is shaped towards economic needs rather than societal and family needs. Consumerism is the new fundamentalism and I have nothing but respect for the couples who can financially manage to have one parent stay at home and choose to give up material things to do that life-changing job. That same house a one income family could have purchased in 1970 now needs a two-income family and the little children to be farmed out to be looked after by some company. Fúck sake, what a dystopian world we live in in 2018.

McCreevy's tax individualisation: who has benefited? (29 November 2002)

...Dual-income married couples have also benefited to the same extent as the single person. However, one-income married couples have not enjoyed the same benefits as a result of individualisation.

In 2002, a one-income married couple will suffer tax as a percentage of earnings at 18 per cent on income of €50,000 compared to a two-income married couple, where each earn €25,000, who will suffer tax as a percentage of earnings at 11 per cent. If the one-income married couple qualify for the home carer credit, this rate is reduced to 17 per cent, still 6 per cent higher than the two-income couple.

So how exactly has individualisation impacted on the income tax liability of married couples?

This depends on the level of the total income of the married couple and, more importantly, how that income is split between both parties. If the total income of the married couple is less than €37,000 in 2002, then individualisation has no impact.

To get the maximum benefit from the standard rate band available to a married couple in 2002, it is necessary for the lower earner to be in receipt of income of at least €19,000 per annum.

The impact of individualisation is illustrated by the following example:

George and Mary are married. In 2002 George earns €29,000 and Mary receives rental income of €29,000. Their joint tax liability for 2002 is €8,340.00 (tax as a percentage of income is 14.38 per cent).

Michael and Jean are also married with one source of income in 2002 of €58,000. Their joint tax liability for 2002 is €12,520 (tax as a percentage of income is 21.59 per cent). If Michael and Jean qualify for the home carer tax credit, their liability will be reduced to €11,750, which means that tax as a percentage of income is 20.26 per cent.

The tax bill for Michael and Jean is higher by €4,180 (€19,000 at 22 per cent) due to the fact that they cannot avail of the higher rate band available to a dual-income married couple. As a result, €21,000 (€58,000 - €37,000) of their income is liable to tax at 42 per cent whereas the other couple's total income remains liable to tax at 20 per cent...

Peregrinus

techdiver wrote: »

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

It depends on what you're trying to achieve.

The thing about simply reversing tax individualisation is that it will benefit all married couples with a non-working spouse, including those who no longer have (or never had) children requiring childcare. So a good chunk of the "tax cost" of this measure will not flow to parents who are caring for young children at home.

If that's the group you want to benefit, you might do better to leave tax individualisation as it is, and instead introduce an equivalent (or larger) tax credit for non-working parents of pre-school age children, and/or a social welfare allowance for those parents.

Malayalam

I agree with you OP. Sorry you had to put up with such blithering bull**** attacks on your valid point before some more nuanced replies appeared.

The stay at home parent gets almost zero support, and the sole earner loses out because the state wants everyone working, or at least apparently working, given that a good 50% of jobs qualify as Bull**** Jobs. The state will then at least partly finance your child care away from its family while the parents struggle ceaselessly to put a roof over their head and buy regualr goods due to serious attenuation in the spending power of the plebian wage over the past 50 years, and the state will be the Good Father to us all from cradle to grave to whom we will all look in supplication for the solutions to all our woes. Fock that.

Malayalam

Deleted User wrote: »

Yeah, I think that unrelenting Thatcherite fúcktard Harney and her soulmate in rightwing "No such thing as society" Thatcherism in Ireland, Charlie McCreevy, changed Irish tax law in 2000 to reward parents who abandon their children to childcare and instead go out and do "proper" work and make a "proper" contribution to society rather than do that unimportant doss joke "job" of... raising children.

I give it 2058 before people alive in 2018 realise how much society today is shaped towards economic needs rather than societal and family needs. Consumerism is the new fundamentalism and I have nothing but respect for the couples who can financially manage to have one parent stay at home and choose to give up material things to do that life-changing job. That same house a one income family could have purchased in 1970 now needs a two-income family and the little children to be farmed out to be looked after by some company. Fúck sake, what a dystopian world we live in in 2018.

McCreevy's tax individualisation: who has benefited? (29 November 2002)

Will you marry me ?

mariaalice

What can't there be a children's tax credit so the difference is not between stay at home versus working parents it would acknowledge the cost of bringing up children. It would be available to anyone caring for children working outside the home or stay at home.

Guy:Incognito

Guy:Incognito wrote: »

Jane and Joe are doing twice as much work.

Ha. Ha. Ha. No kids of your own, then? I was offered two weeks paid Paternity Leave off work when my latest gasúr was born. Fúck that. Work is a holiday compared to staying at home with a teething child who decides what you can do, where you can do it, when you can sleep and, well, most other things. The temperament required to stay at home and raise a child is quite simply beyond me. And if every child minder went on strike in the morning, the Irish economy would collapse. Very few jobs are "real" and "important enough" for that to happen. And certainly not the vast majority of bureaucracy-laden bullshít office jobs. And the bureaucracy is only getting worse and more pointless in most of those "real" jobs.

OssifiedEd

Guy:Incognito wrote:

Jane and Joe are doing twice as much work.

Not necessarily. Jane and Joe might only earn 30k each because they work in a part time manner or on job share.

techdiver

mariaalice wrote: »

What can't there be a children's tax credit so the difference is not between stay at home versus working parents it would acknowledge the cost of bringing up children. It would be available to anyone caring for children working outside the home or stay at home.

There already "is", but it's a miserable €1,100 per year. It comes nowhere close to closing the gap and it won't be put up significantly either.

mariaalice

techdiver wrote: »

There already "is", but it's a miserable €1,100 per year. It comes nowhere close to closing the gap and it won't be put up significantly either.

Well, it should be increased it would never be near the real cost of raising a child but it could acknowledge the cost of raising children.

Anyway, this topic is very ideological the kind of issue the Iona institute campaigns on its very hard to get it right and not favor one group over another.

techdiver

Peregrinus wrote: »

It depends on what you're trying to achieve.

The thing about simply reversing tax individualisation is that it will benefit all married couples with a non-working spouse, including those who no longer have (or never had) children requiring childcare. So a good chunk of the "tax cost" of this measure will not flow to parents who are caring for young children at home.

If that's the group you want to benefit, you might do better to leave tax individualisation as it is, and instead introduce an equivalent (or larger) tax credit for non-working parents of pre-school age children, and/or a social welfare allowance for those parents.

At what point do you cut off the age for dependant children? Just because they go to school doesn't mean they don't need looking after anymore. For the first few years they are finished at 1pm. After that 3pm until they are older. These hours make it impossible to hold down full time employment without after school care also. You have couples dropping kids off to creche at 7.30 in the morning (or in some cases earlier to grandparents/neighbours who in turn drop them to crache when it opens), commuting to Dublin and arriving back in the evening barely in time to put the kids to bed. We live in a world now where children are more familiar with childcare workers than their own parents. That's bound to work out well in the long term. :rolleyes:

Tax individualisation was not done for the benefit of women despite what the government of the time want you to believe. It was part of a larger race to the bottom from a society point of view. Families and people left behind and merely become a commodity for the economy (unless of course you are a deadbeat and you are funded by this self same group that are hit by this unfair taxation system).