Tax Bands

dictatorcat

I wanted to post a poll on this to see what people prefer. Anyho heres what i want to ask peoples opinion; Which of the following three would you like to see as a method of tax calculation:

1. The current two tier system of 20% and 40%,

2. A three tier system of 20%, 30% and 40% depending on your earnings or

3. A continuous tax band where the amount of tax you pay is directly proportional to your taxable income, ie. no bands as such but rather a scale where if you get a raise you simply pay an extra one or two percent depending on the amount.

Just wondering what people think?

dahamsta

I've always been an advocate of 3, and can't understand why it isn't mooted by mainstream politicians. Obviously the scale would need to be developed carefully to avoid a disincentive to achieve, but even with that would it really be that difficult to implement?

adam

dabhal

What about tax free allowance?
What are the cut off levels for the 20% 30% 40%

AngelofFire

I propose more tax bands to create a more equitable tax system, its rediculous that a person on 35000 per year pays the same as someone earning 3000000 per year.

No tax for those earning below E15000 per year

a 20% rate for people earning between 15,000 and 33,000

a 35% rate for people earning between 33,000 and 70,000 per year

a 48% rate for people earning between 70,000 and 135,000 per year

a 52% rate for people earning above 135,000 per year.

daveirl

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AngelofFire

Yes i agree, they pay more in actual sums of money. But not in proportional terms, if people are making more money out of society than others, then they should be obliged to spare an extra proportion of their wealth to help to support society. Its not as if they`d notice the extra few percentage points.

daveirl

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AngelofFire

I contest the point that high earners are the sole drivers of the economy. In order for a business to prosper they need to employ wage labour. Example Workers in Paddy power plc earn considerably less than directors yet without the workers the company wouldnt be able to make money, and there would be no highly paid directors.

Victor

daveirl wrote:

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Eh, tax credits people?

Nuttzz

AngelofFire wrote:

I contest the point that high earners are the sole drivers of the economy. In order for a business to prosper they need to employ wage labour. Example Workers in Paddy power plc earn considerably less than directors yet without the workers the company wouldnt be able to make money, and there would be no highly paid directors.

and without the highly paid directors to run the company there would be no workers, chicken and egg me thinks

Gurgle

daveirl wrote:

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Nope, economy is consumer driven.
For every 1 person earning €100k there are at least 100 earning less than €50k.
That €5,000,000 is fully taxed and the remains (around €3,500,000) is all spent in Ireland. Raising a family on €50k (or less ) does not leave anything to invest in tax avoiding schemes.

The 1 earning €100k can afford to take full advantage of many of the tax breaks, such as buying a second house to rent out (with tax relief on all of the interest), SSIA with the maximum contribution, AVCs, Share-purchase schemes etc.

whether it be through being CEOs of large companies or whatever.

Big-wig management types have one main purpose in their jobs - to make more money for the company they work in. If that means tax avoision, Transfer Price fixing, talking down profits in union meetings etc etc, thats what they do.

In Ireland particularly, we have an enormous proportion of foreign companies here. The profits made don't stay in the Irish economy.

daveirl

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bonkey

daveirl wrote:

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Don't we sit second in the world after the US for disparity of wealth?

Hardly what I would call "a nice balance".

jc

daveirl

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Gurgle

daveirl wrote:

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I would be quite happy to achieve only 10 or 20 times minimum wage

daveirl

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thejollyrodger

i think the tax system in ireland is alright but the only major problem is how quick people can end up on the 40% tax band. They should introduce a third band as everyone as suggested. I think thats the main problem with tax in this country.

Meh

daveirl wrote:

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Incorrect. People on 35k pay a much smaller percentage of their income in tax (as well as a much much smaller absolute amount, of course). They only pay 42% on the amount above 32k.

They pay the same marginal rate as the rich guy (well actually, their marginal rate is 4% higher until they get to 42k, because of the employee PRSI ceiling. But this isn't enough to have them paying as much percentage tax as the rich guy).

AngelofFire

daveirl wrote:

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On that logic you`s sware that when the celtic tiger started to roar, every last irish person was handed the opportunity to become successful entrepreneurs. This could not be further from the truth, firstly because not every person is born with the opportunity to become entrepreneures. Also because much of the wealth from the Celtic tiger was channelled into tax concessions, this gave disproportionate benefit to those who were already rich. Not nearly enough was spent on the public realm eg social services, education. That is why we have such a desparity of wealth, not because a few entrepreneures had the same start in life as people who are less well of then them and somehow worked their backsides off and became rich.

Redleslie2

bonkey wrote:

Don't we sit second in the world after the US for disparity of wealth?

Hardly what I would call "a nice balance".

jc

I don't think so. The UK, Guatemala (where 1% of the population controls over 60% of the land and wealth) and others are all far worse.

ionapaul

Anyone know what metrics they use to calculate the disparity of wealth figures? What countries score the highest for "most equitable distribution of wealth"?

Redleslie2

ionapaul wrote:

Anyone know what metrics they use to calculate the disparity of wealth figures? What countries score the highest for "most equitable distribution of wealth"?

Countries with greatest equality:

1. Slovak Republic
2. Belarus
3. Hungary
4. Denmark
5. Japan
6. Sweden
7. Czech Republic
8. Finland
9. Norway
10. Bulgaria

Table here.

elivsvonchiaing

Completely off the wall - but imho:
I will not offer comment on lower bands of tax as that is for government to work out to pay the bills.

Over €1m tax drops to 10%, over €5m zero tax. This is not social justice, but I reckon precious few people who earn €5m spend 180 days in the country each year! If they live here they will contribute through VAT. Rich people should be encouraged to live here imho!

daveirl

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elivsvonchiaing

laments rep system

daveirl

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AngelofFire

daveirl wrote:

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Yes i agree everyone who is born with intelligence and entrepreneural spirit should be able to achieve their full potential. However a lot of people born with enterpreneural spirit are unable to achieve that potential because of the background that they were born into, some may even be born into poverty, this is a huge blight on the chances to become a successful entreprenure.whereas, a person who is born of fairly well off parants has a 100 times greater chances of succeeding than someone born into a poor background who would have the same enterprenueral skills. Basically what im tryin to say is, the utopian view that all people with enterpreneural ability succeed is only valid If Everyone has the same start in life

rien_du_tout

daveirl wrote:

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Because it can cause political instability and create an elitist society where the few can lobby for anything they want......... whats so wrong with leveling the scales so that its not equal but doesnt topple over!!?

ionapaul

Ireland's not even close to tobbling over. Almost all members of our poor enjoy a living standard far above that endured by billions of other human beings on this planet.

dictatorcat

ionapaul wrote:

Ireland's not even close to tobbling over. Almost all members of our poor enjoy a living standard far above that endured by billions of other human beings on this planet.

maybe not now, but it's not a question of living standards, it's about equality. Were the poor french any worse off than the poor germans or english in 1793? Were the Russians any worse off than other countries when the Tzar was toppled? No, it's about local inequality. The tax system must be modified to create a more equal society, only in an equal society can the majority be satisfied. The rich should not be penalised for being rich, however they should be expected to contribute proportionately to the society from which they have benefited.

elivsvonchiaing

Let's look at this logically: I earn €1m/year (I wish) I can spend 150 days in Ireland and spend fúck-all my domicile is in Grand Cayman...

Tax-Breaks for rich bastards please! CJH had it right!

billy the squid

I think the tax credit system should be scrapped in its current form. The tax free allowance system was better for the lower paid wishing to do the odd bit of overtime when it became availible.

with the old system, you could do your overtime and, as long as you stayed below the cut off point at the end of the year, you could make that little bit extra every once in a while.

with the new system, your cut off point is measured every week. meaning that if you earn over a certain amount or if your employer pays you back-dated wages in a lump sum, your you are made pay 40 percent tax on it.

while this system remains as it is now, a 30 percent tax bracket would cause hardship to lower paid people and would remove the incentive for them to do any overtime should their employer need them to do so.

ionapaul

dictatorcat wrote:

maybe not now, but it's not a question of living standards, it's about equality. Were the poor french any worse off than the poor germans or english in 1793? Were the Russians any worse off than other countries when the Tzar was toppled? No, it's about local inequality.

That only washes if you are arguing that the French and Russian revolutions had economic inequalities as their respective causes, rather than political inequalities or restrictions. I don't see the Irish revolution in sight, where the great unwashed and disenfrancised masses attack Leinster House and the Aras with their bare hands! Bertie to the Guillotine! Actually, that doesn't sound half bad...:)

Sleepy

That's fair enough. But why should someone who doesn't work half as hard as you, or isn't as intelligent or entrepeneurial as you get the same wages because Daddy's loaded or happens to be "good friends" with a local TD? Until the government pull the education system up to scratch to the point where there's no difference between the standard of education offered is no different between Blackrock College/Clongowes and the secondary school in the poorest area of the country. When everyone in this country has the same opportunity to educate and further themselves, you can talk of how success is based on "intelligence and entrepreneural spirit".

At present in this country success is far more based on who Daddy is, one's social standing and, to be honest, luck.

ionapaul

Luck will always have a lot to do with a person's life, no denying that or legislating against it. I also agree that our education system needs to be better funded (undergraduate education should be entirely free as far as possible, postgraduate probably not IMHO) - though not via additional taxing, rather a better use of the existing revenue. Despite my love of horse racing, I am particularly against the grants and tax breaks given to this industry and the betting industry.

'Who Daddy is' is important, no doubt (look at George W!), but this is also hard to legislate against. I would prefer more of a meritocracy - most of us would, I am sure the average boardster is more intelligent and better educated than the average Joe - and I know a system that rewards hard work and talent is in my best interests. I personally don't want to be 'held back' subsidising those less-willing or interested in working hard or those happy with the standard of life that working 'enough but no more than enough' entitles them to. I also want the chance to earn more than those with less intelligence, talent or drive do. Does that reflect badly on me?

One of the things I can say is that with regards 'who Daddy is', I know many instances where a person's background has mattered little when their eventual success is considered. My father was one of nine children born on an off-shore island in Ireland in the 1940s in a two-bedroomed craphole. Getting an orange for Christmas was a treat. Every one of his siblings is a success - the vast majority of my cousins are even more economically successful than their parents. One of my best friends in the States parents were Mexican immigrants with no English - her father was deported a number of times and once crossed the border in the boot of a car, finally getting amnesty in the 70s or 80s. He became a construction foreman, has a lovely house and lives far better than the vast majority in Mexico. In turn, his daughter worked hard, got an MBA from Berkeley, is a financial analyst with two properties in her 20s. I suppose these are the reasons millions are beating down the doors to get into the US and Ireland.

I believe a low-tax system allows those with drive, talent and a willingness to work hard to become economic successes. It certainly isn't perfect. But I think that some of the main problems people will point out (problems in America's case with African-American ghettos) aren't due to the economic system at all, rather they are cultural problems (racism, obviously) that need to be addressed.

Feel like that was a bit of a rant. Apologies if it reads that way.

puntosporting

The main issue i have with regards the current credits system is overtime!
I work for one of the largest american companys in ireland and im required to work massive amounts of overtime!
I find it a kick in the teeth that you have a cut off point every week and after that your hit with a 40% tax rate!
So basicaly the more graft you put in a week the harder the government hits you with tax,your penalised for working longer hours and contributing your time to the economy!

Meh

puntosporting wrote:

I find it a kick in the teeth that you have a cut off point every week and after that your hit with a 40% tax rate!

48%, when you count employee PRSI and health levies.

puntosporting

Very true did not think of those.

Victor

billy the squid wrote:

I think the tax credit system should be scrapped in its current form. The tax free allowance system was better for the lower paid wishing to do the odd bit of overtime when it became availible.

Eh, no. They work almost identically, if anything the process of moving to tax credits benefitted higher earners as allowances (now converted to credits) were increased.

Sleepy

ionapaul wrote:

Luck will always have a lot to do with a person's life, no denying that or legislating against it. I also agree that our education system needs to be better funded (undergraduate education should be entirely free as far as possible, postgraduate probably not IMHO) - though not via additional taxing, rather a better use of the existing revenue. Despite my love of horse racing, I am particularly against the grants and tax breaks given to this industry and the betting industry.

Agree entirely. Though in the short term, higher taxation will be needed to reform a badly run down system and personally I feel this should come from those who can afford to pay it.

'Who Daddy is' is important, no doubt (look at George W!), but this is also hard to legislate against. I would prefer more of a meritocracy - most of us would, I am sure the average boardster is more intelligent and better educated than the average Joe - and I know a system that rewards hard work and talent is in my best interests. I personally don't want to be 'held back' subsidising those less-willing or interested in working hard or those happy with the standard of life that working 'enough but no more than enough' entitles them to. I also want the chance to earn more than those with less intelligence, talent or drive do. Does that reflect badly on me?

Not at all, so long as those people are given the same chances as you are in regards to education. I should point out that I'm completely against the welfare state, but I believe that health, education and a decent police force are basic human rights, not simply there for those who can afford them.

One of the things I can say is that with regards 'who Daddy is', I know many instances where a person's background has mattered little when their eventual success is considered. My father was one of nine children born on an off-shore island in Ireland in the 1940s in a two-bedroomed craphole. Getting an orange for Christmas was a treat. Every one of his siblings is a success - the vast majority of my cousins are even more economically successful than their parents. One of my best friends in the States parents were Mexican immigrants with no English - her father was deported a number of times and once crossed the border in the boot of a car, finally getting amnesty in the 70s or 80s. He became a construction foreman, has a lovely house and lives far better than the vast majority in Mexico. In turn, his daughter worked hard, got an MBA from Berkeley, is a financial analyst with two properties in her 20s. I suppose these are the reasons millions are beating down the doors to get into the US and Ireland.

For every one of these people, I could probably point out three who only have a career thanks to our system of accepted nepotism.

I believe a low-tax system allows those with drive, talent and a willingness to work hard to become economic successes. It certainly isn't perfect. But I think that some of the main problems people will point out (problems in America's case with African-American ghettos) aren't due to the economic system at all, rather they are cultural problems (racism, obviously) that need to be addressed.

Feel like that was a bit of a rant. Apologies if it reads that way.

A low tax-system certainly does that, but it can't be given at the expense of basic public services. I think most of the problems in making something of yourself in this country exist because of the institutions and networks of the more successful professions. The legal profession would be a prime example of an organisation whose governing bodies have practically designed their training to engender an old boys network and keep the riff-raff out.

billy the squid

Victor wrote:

Eh, no. They work almost identically, if anything the process of moving to tax credits benefitted higher earners as allowances (now converted to credits) were increased.

I would disagree with that, If I earn more than €510 or there abouts in one week I'm hit with 40 percent tax. I only have to do something like 6 hours overtime to hit that bracket.

that would be two hours a day for three days, lets say tuesday, wednesday, and thursday. which for the company i work for can happen from time to time.

A 30 percent tax band would make overtime for me economically unviable.

Sleepy

The weekly threshold for the 40% mark is €538.46 in the current tax year and will be €566 next year. Assuming you're earning 28K (the current threshold p.a.) that equates to €14.17 per hour which is €85 for those 6 hours. Under the current system you get €44 for that overtime after tax (and PRSI, health levy etc) Under the systems the likes of which AngelofFire are promoting, you'd come home with more of that.

billy the squid

The annual cut off point was a better system for those doing sporadic overtime in my opinion.

bonkey

daveirl wrote:

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And some are born with none of these, nor any other "above average" skills.

I have no intention of becoming equal with someone who has no intention of working as hard as I do.

I'm curious...if that person currently had a higher standard of living than you, was earning more money, and so on and so forth.....would you still say the same?

Its one thing to argue that you don't want the lazy being given freebies to make them as well off as you....but what about those less well off than you who work harder than you do? Or those who work less than you do and earn more than you? No problem with those either?

jc

daveirl

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Victor

billy the squid wrote:

I would disagree with that, If I earn more than €510 or there abouts in one week I'm hit with 40 percent tax. I only have to do something like 6 hours overtime to hit that bracket.

And it would have been exactly the same under the old system. You are only taxed at the 40% rate on the extra earnings over that limit (Sleepy suggests €538.46), not on the entire amount. As the limit is cumulative it doesn't discriminate between someone who systematicly exceeds the limit against someone who merely averages above the limit (the PRSI system does discriminate because of the weekly exemptions).

Redleslie2

daveirl wrote:

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How about the people who run this site? They don't make anything out of it. Does that mean they're not "intelligent", that they have no "drive", that little or no time and labour has gone into producing and maintaining it?

daveirl

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billy the squid

Victor wrote:

And it would have been exactly the same under the old system. You are only taxed at the 40% rate on the extra earnings over that limit (Sleepy suggests €538.46), not on the entire amount. As the limit is cumulative it doesn't discriminate between someone who systematicly exceeds the limit against someone who merely averages above the limit (the PRSI system does discriminate because of the weekly exemptions).

I have to disagree i will give an example

in one week, If i were to do 10 hours of overtime say the first week in january and not do any more overtime, I would be taxed at 40 percent for the extra 4 hours regardless of whether or not I exceded my annual cut off point.

under the old system, I could earn the extra four hours without having to pay the 40 percent tax.

billy the squid

daveirl wrote:

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Those foreign nationals that do the jobs that no Irish person would be caught dead doing, (i.e. cleaning toilets, working in fast food restaurants) work their butts off, and sometimes have to put up with some horrendous crap, such as drunken members of the public, yet their money is crap. hardly rewarding.

daveirl

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