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Let's take a moment to talk about taxation

theguzman

I am not a believer in Ireland being a low tax economy and I think we are punitively taxed here, considering what we receive from the Government in return it very bad value in my own honest opinion. Lets discuss it here. I am adding in all the taxes from the top of my head immediately.

Income Tax of 20 or 40% depending on income or circumstances
Universal Service Charge of 0.5% to 11% typically around 4.5%
PRSI 4% but can vary
VAT 0% to 9% to 23% (21% currently but raising back to the 23% rate soon)
Road Tolls, varies from €0 for some rural dwellers to €1,000+ per year for a daily commuter passing a tollgate.
Excise Duty of 50%+ on Hydrocarbon fuels, alcohol, and tobacco
Carbon tax €33.50 per tonne of fossil fuel or 9c per litre of fuel.
VRT, Vechicle Registration Tax on new and used cars
MotorTax €100 to €2,500 per year (average of €250 per modern car or less).
CGT Inheritance Tax 33% of what you will inherit, this was money previously taxed. This is one of the biggest for some and for others does not effect them.
Local Property Tax €90 to €1,000+ per year
Stamp Duty 1% for first time buyers for homes under €1m and 2% for above €2m 7.5% for Commercial property and farmland
D.I.R.T 33% this was once a serious tax, however since bank's don't any interest now it is nearly gone now. Probably costs more to collect than it raises now.
Plastic Bag Levy, 22c per plastic bag, one of the few taxes I support
Covid Test €100 to leave the country, as it is a govt mandated directive it is a from of tax as far as I'm concerned.
Dog Licence €20 for your madra
Gun licence €80 for 3 years, there is over 300k+ people holding guns in Ireland, many with multiple weapons.
Driving Licence €55 per decade
Passport €90+ per decade
NCT €55per 1 or 2 years depending on car age, typically €85 per year for a 10+ year car needing a retest.
Water Charges exceed 145L of water per day per person for a family of 4 and you will get charged. Small minority of people effected usually. Contentious issue.
Parking Charges varies, depends on usage
TV Licence: €160 per year to fund RTE
Electricity majority of your electric bill consists of taxations from PSO Levies and Carbon taxes

We are far from a low tax economy and I would love to do a simulation of a typical person, from cradle to grave he will pay somewhere above 70% of all monies he will earn back to the state in all the varies taxes.

What tax am I missing?

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Muahahaha

Id be more concerned about how our taxes are spent than the actual level of taxation itself, there is a lot of waste in the system.

Wanderer78

Muahahaha wrote: »

Id be more concerned about how our taxes are spent than the actual level of taxation itself, there is a lot of waste in the system.

absolutely, we need to start tackling the waste within the fire(finance, insurance and real estate) sectors, i.e. the rent seekers!

Eric Cartman

Iteland is ahigh perso al tax economy, this country loves screwing over SME’s and high earners to prop up an ever expanding welfare class.

Ireland needs to half rates of personal taxation and make the savings in the welfare and associated services budget.

Wanderer78

Eric Cartman wrote: »

Iteland is ahigh perso al tax economy, this country loves screwing over SME’s and high earners to prop up an ever expanding welfare class.

Ireland needs to half rates of personal taxation and make the savings in the welfare and associated services budget.

the welfare classes, the ones that own the majority of assets, whereby the majority amount of taxes are placed!

Eric Cartman

Wanderer78 wrote: »

the welfare classes, the ones that own the majority of assets, whereby the majority amount of taxes are placed!

“BuT ThEy PaY VaT oN CaNs AnD SmOkEs”

Wanderer78

Eric Cartman wrote: »

“BuT ThEy PaY VaT oN CaNs AnD SmOkEs”

they do indeed, while the rent seekers pay virtually nothing

Eric Cartman

Wanderer78 wrote: »

they do indeed, while the rent seekers pay virtually nothing

Rent seekers ? If you mean landlords they are probably the most highly taxed business owners jn all of Ireland

Donald Trump

Eric Cartman wrote: »

Rent seekers ? If you mean landlords they are probably the most highly taxed business owners jn all of Ireland

Rent seeker is an economics term.

I presume that is what the poster refers to

Wanderer78

Eric Cartman wrote: »

Rent seekers ? If you mean landlords they are probably the most highly taxed business owners jn all of Ireland

no i dont necessarily mean landlords

definition:

Rent seeking is an economic concept occurring when an entity seeks to gain wealth without reciprocal contribution of productivity.
The term rent in rent seeking is based on an economic rent which was defined by economist Adam Smith to mean payments made in excess of resource costs.
An example of rent seeking is when a company lobbies the government for grants, subsidies, or tariff protection.

sameoldname

Eric Cartman wrote: »

Iteland is ahigh perso al tax economy, this country loves screwing over SME’s and high earners to prop up an ever expanding welfare class.

Ireland needs to half rates of personal taxation and make the savings in the welfare and associated services budget.

Well if it's just about proposing meaningless sh!t then how about we:

Increase taxes on crypto currency profits to 100%
€100,000 flat tax on all SUV's for everyone except farmers and trade workers.
10 fold property tax increase on holiday homes.
Give me €250,000 a year because I deserve it.

See? It's a mixture of penalising things I dislike and also benefitting myself. Aren't I clever and constructive!

timmyntc

Get Real wrote: »

I can't comment on non-income taxes as things like TV licence, house tax etc don't directly compare to other countries. But I'm sure they have their own ways of indirect taxation too. (Council tax in UK for example)

I've never agreed with the idea that we're being done somehow on tax in this country. Granted, there are disincentives to some things, such as DIRT on investments etc.

But on income tax, people don't actually pay much, we just think we do.

On a 35k salary, we come away with 29k after tax. Source, https://www.pwc.ie/issues/budget-2021/income-tax-calculator.html

On a 35k salary in France, its 27.5k
On a 35k salary in Belgium, its 22k!
On a 35k salary in Germany, its c24k, depending on church tax, deducted from income
On a 35k salary in Spain its 26.5k
On a 35k salary in Italy its 23.5k!
On a 35k salary in UK its 27k.

Source: https://salaryaftertax.com/ (Ireland also available on here, which gives same result as PWC one)

We beat all those countries for the after tax amount of income. That's after usc, paye, prsi etc, coming out with 29k on a 35k salary. More disbosable than any of the countries above.

Why a 35k salary?

On higher salaries you will start to see the big differences in Irish and other countries' taxation.

We have one of the lowest thresholds before the top rate of tax kicks in, and one of the highest marginal rates of tax in Europe

Mad_maxx

sameoldname wrote: »

There are a good few countries around the world with a flat tax rate, can you suggest one we could copy?

most are not the kind of place id want to emulate but its not really down to the tax code

PhilOssophy

“Daddy, what do taxes pay for?” – Todd Flanders
“Oh, why everything! Policemen, trees, sunshine, and let’s not forget the folks who just don’t feel like working, God bless ’em.” – Ned Flanders

Mad_maxx

Donald Trump wrote: »

Rent seeker is an economics term.

I presume that is what the poster refers to

" rent seeker " is a term so loaded with ideology , the tyres are flat as a pancake

PhilOssophy

I have no problem with paying taxes. My problem is what we get for that tax. We (middle income workers) get screwed for everything, we have a health service which the only answer has been "more money needed", rather than a root-and-branch review of where the money is going.
Throughout our public sector, there's umpteen examples of money being wasted in both unneeded people and a fortune being spent on consultants for almost everything of value. And then there is the money waste and poor planning on some public infrastructure projects.
And all this, while in Silicon Docks they make a mockery of our Corporation Tax laws and give us the run around. And the Government support this? There is no way in this world Google and Facebook will pack their bags if we add a few extra percent to the Corp. Tax bills, and maybe we should call their bluff and see what happens.

sameoldname

Mad_maxx wrote: »

most are not the kind of place id want to emulate but its not really down to the tax code

Of course not.

bonjurkes

Deemed disposable tax - 41% (you have to pay for gains from some of your investments every 8 years) - Which is a massive taxation and there is no similar example of this in other EU countries.

And as a fully responsible tax payer, here is where your money goes: https://whereyourmoneygoes.gov.ie/en/ (hint: social protection is #1)

And as a bonus:

Mike Murdock

bonjurkes wrote: »

Deemed disposable tax - 41% (you have to pay for gains from some of your investments every 8 years) - Which is a massive taxation and there is no similar example of this in other EU countries.

And as a fully responsible tax payer, here is where your money goes: https://whereyourmoneygoes.gov.ie/en/ (hint: social protection is #1)

1/3rd is on Pensions in fairness.

The €22 billion on healthcare boggles the mind. With that level of funding for a population of 4.5 million, we should have a world class health service.

sameoldname

Mike Murdock wrote: »

1/3rd is on Pensions in fairness.

The €22 billion on healthcare boggles the mind. With that level of funding for a population of 4.5 million, we should have a world class health service.

To be fair, nearly €4 billion of that is an increase due to Covid 19. Though in general I agree.

bonjurkes

Mike Murdock wrote: »

The €22 billion on healthcare boggles the mind. With that level of funding for a population of 4.5 million, we should have a world class health service.

We do have it. You just have to wait 1 year for your appointment date

Ireland is 16th at health quality in Europe, there was more comprehensive chart that says Ireland is the 2nd worst health service based on waiting times (UK was 1st)

https://en.wikipedia.org/wiki/Healthcare_in_Europe

It's my bad actually in 2018, Ireland was the worst country due to waiting times : https://en.wikipedia.org/wiki/Euro_Health_Consumer_Index

KevinK

timmyntc wrote: »

Why a 35k salary?

On higher salaries you will start to see the big differences in Irish and other countries' taxation.

We have one of the lowest thresholds before the top rate of tax kicks in, and one of the highest marginal rates of tax in Europe

This is a super interesting post and website, I think I have been of the vague idea that we have a high tax rate in Ireland, and while the headline rates are quite high it looks like our rates are pretty standard. The nature of the tax credits means that our tax rates look higher than they are at first glance.

bonjurkes

Well then let's also add high VAT rate in Ireland. Source: https://ec.europa.eu/ireland/news/key-eu-policy-areas/eu-and-vat_en. But luckily they introduced discounted VAT rate during Covid from 23% to 21% which is a super great 2% amount, shocking.

Geuze

KevinK wrote: »

This is a super interesting post and website, I think I have been of the vague idea that we have a high tax rate in Ireland, and while the headline rates are quite high it looks like our rates are pretty standard. The nature of the tax credits means that our tax rates look higher than they are at first glance.

Direct income taxes are not high in Ireland, this is well known.

PRSI is particularly low.

Huge numbers of earners pay zero, or very low, direct taxes.

HOWEVER

the entry point to the top Marginal Tax Rate (MTR) is very low, at 35-36k.

The income tax system is very progressive, one of the most progressive in the world, so that although many low earners pay zero or very little direct tax, at earnings of, say, double the median, the direct taxes here are similar to high tax countries.

Geuze

Geuze wrote: »

The income tax system is very progressive, one of the most progressive in the world, so that although many low earners pay zero or very little direct tax, at earnings of, say, double the median, the direct taxes here are similar to high tax countries.

http://www.publicpolicyarchive.ie/ireland-has-the-most-progressive-income-tax-system-in-the-eu-2/

Conclusion

Compared to other OECD countries:

The level of direct tax paid in Ireland is low particularly for those below average earnings
Employee PRSI in Ireland is less than half the OECD average2
The Irish system is the most progressive in the EU
The top marginal rate is not particularly high but it applies at a relatively low level of income

Geuze

Anecdotal example, retired couple, both over 70

48-50k combined income
Under 10% direct tax

In return for approx 8-10% direct tax on 48k approx, they get:

two full med cards
two FTP
free TV licence
subsidised elec 35pm 420 pa

They have >250k on deposit, and >500k assets

No politician wants to change any of this.

Viscount Aggro

The 41% exit tax on unit funds & ETFs is grossly unfair, and punishes ordinary people who want to save and invest, outside of the high cost, restrictive pension industry. There's a trotskyite element working in Revenue who think, anyone owning such securities should be penalised.
Go after the high earners.

I do think taxes are going to rise significantly, to pay for all the Covid cost. Walk around Rathgar, there's endless displays of wealth. Fancy houses, prestige cars. There's plenty of fat to go after. Increase the pension levy, increase property tax... I mean x2 or x3 times. They won't be able to avoid it.

thefox1982

theguzman wrote: »

I am not a believer in Ireland being a low tax economy and I think we are punitively taxed here, considering what we receive from the Government in return it very bad value in my own honest opinion. Lets discuss it here. I am adding in all the taxes from the top of my head immediately.

Income Tax of 20 or 40% depending on income or circumstances
Universal Service Charge of 0.5% to 11% typically around 4.5%
PRSI 4% but can vary
VAT 0% to 9% to 23% (21% currently but raising back to the 23% rate soon)
Road Tolls, varies from €0 for some rural dwellers to €1,000+ per year for a daily commuter passing a tollgate.
Excise Duty of 50%+ on Hydrocarbon fuels, alcohol, and tobacco
Carbon tax €33.50 per tonne of fossil fuel or 9c per litre of fuel.
VRT, Vechicle Registration Tax on new and used cars
MotorTax €100 to €2,500 per year (average of €250 per modern car or less).
CGT Inheritance Tax 33% of what you will inherit, this was money previously taxed. This is one of the biggest for some and for others does not effect them.
Local Property Tax €90 to €1,000+ per year
Stamp Duty 1% for first time buyers for homes under €1m and 2% for above €2m 7.5% for Commercial property and farmland
D.I.R.T 33% this was once a serious tax, however since bank's don't any interest now it is nearly gone now. Probably costs more to collect than it raises now.
Plastic Bag Levy, 22c per plastic bag, one of the few taxes I support
Covid Test €100 to leave the country, as it is a govt mandated directive it is a from of tax as far as I'm concerned.
Dog Licence €20 for your madra
Gun licence €80 for 3 years, there is over 300k+ people holding guns in Ireland, many with multiple weapons.
Driving Licence €55 per decade
Passport €90+ per decade
NCT €55per 1 or 2 years depending on car age, typically €85 per year for a 10+ year car needing a retest.
Water Charges exceed 145L of water per day per person for a family of 4 and you will get charged. Small minority of people effected usually. Contentious issue.
Parking Charges varies, depends on usage
TV Licence: €160 per year to fund RTE
Electricity majority of your electric bill consists of taxations from PSO Levies and Carbon taxes

We are far from a low tax economy and I would love to do a simulation of a typical person, from cradle to grave he will pay somewhere above 70% of all monies he will earn back to the state in all the varies taxes.

What tax am I missing?

Missing:
Corporation Tax
Capital Acquisition Tax (including gifts and inheritance)
Capital Gains Tax
Liability to Irish Tax
Stamp Duty on equities and on businesses
Dividend Withholding Tax
Deposit Interest Retention Tax

theguzman

Geuze wrote: »

Anecdotal example, retired couple, both over 70

48-54k combined income
Under 10% direct tax

In return for approx 8-10% direct tax on 48k approx, they get:

two full med cards
two FTP
free TV licence
subsidised elec 35pm 420 pa

They have >250k on deposit, and >500k assets

No politician wants to change any of this.

When they die and pass it on to their heir then the government will swallow a massive share of it. All inheritance tax should be scrapped to a limit of say below €10m.

jimmycrackcorm

Might be insteresting to see how we compare to the rest of Europe when it comes to water "tax" and property taxes, and how left-wing parties in each view these.

Eric Cartman

timmyntc wrote: »

Why a 35k salary?

On higher salaries you will start to see the big differences in Irish and other countries' taxation.

We have one of the lowest thresholds before the top rate of tax kicks in, and one of the highest marginal rates of tax in Europe

+1 , at 50k and especially 100k it shows just how abhorrently disgusting our tax rates are