ESRI says we need more "progressive" taxes lol

Fred Cryton · 21-05-2021 9:03am #1

Firstly let's please stop using the word "progressive" in relation to taxes. What we're really talking about is robbing the middle class blind in order to pay for bloated welfare payments and bloated public sector salaries and pensions.

Ireland already has some of the highest marginal tax rates, north of 50% taken off us in the private sector. What really should be happening is those on lower incomes should be paying more taxes. A person earning €20k in Germany pays €4k in tax. Here they pay €1k.

I love how it doesn't even enter their little heads that perhaps public sector pay freezes might be one answer to budget deficits...

Geuze · 21-05-2021 9:34am

I agree with you, the marginal tax rates faced by average workers are already too high.

However, overall, taxes are not too high, and ageing means higher costs now and in the future.

So I accept that taxes as a share of national income must rise (not by a lot), but I agree with you that the 48.5% MTR facing average workers is already too high.

titan18 · 21-05-2021 9:35am

Or we should lower spending (particularly day to day spending) instead of robbing us more.

Allinall · 21-05-2021 9:36am

"Progressive" in a taxation sense means that those that earn more pay more.

Surely this is a good thing to be aiming for?

Chips Lovell · 21-05-2021 9:40am

When it comes to taxation, it's quite tricky to compare like with like. There's tendency to focus on just income tax rates without taking into account allowances, credits and, the big one, social security contributions. We've a relatively high rate of income tax compared to a lot of countries, but PRSI contributions are fairly low.

According to the latest OECD figures, the tax wedge for the average Irish worker is well below the OECD average.

And that's just the tax on wages. We get off fairly lightly in terms of property and municipal taxes here:

gibgodsman · 21-05-2021 9:42am

Fred Cryton wrote: »

Firstly let's please stop using the word "progressive" in relation to taxes. What we're really talking about is robbing the middle class blind in order to pay for bloated welfare payments and bloated public sector salaries and pensions.

Ireland already has some of the highest marginal tax rates, north of 50% taken off us in the private sector. What really should be happening is those on lower incomes should be paying more taxes. A person earning €20k in Germany pays €4k in tax. Here they pay €1k.

I love how it doesn't even enter their little heads that perhaps public sector pay freezes might be one answer to budget deficits...

Can you define the middle class and lower class for me please? I work full time and at this rate I have no idea which I fall into anymore

Fred Cryton · 21-05-2021 9:44am

Allinall wrote: »

"Progressive" in a taxation sense means that those that earn more pay more.

Surely this is a good thing to be aiming for?

Not if it means a cohort of around 20% of the population are paying for everything while 80% pay next to nothing.

Not only is it not fair, it's also economically damaging (as those higher rate taxpayers flee the country) and it's also socially dangerous. The 80% will have no skin in the game and predictably will vote more and more left as "someone else" will be paying for everything.

Fred Cryton · 21-05-2021 9:50am

Chips Lovell wrote: »

When it comes to taxation, it's quite tricky to compare like with like. There's tendency to focus on just income tax rates without taking into account allowances, credits and, the big one, social security contributions. We've a relatively high rate of income tax compared to a lot of countries, but PRSI contributions are fairly low.

According to the latest OECD figures, the tax wedge for the average Irish worker is well below the OECD average.

And that's just the tax on wages. We get off fairly lightly in terms of property and municipal taxes here:

This is a nonsense because you're including low earners here. Low earners pay very little tax in Ireland, way too little. That is where any tax burden should be focused, as you have demonstrated.

Allinall · 21-05-2021 9:52am

Fred Cryton wrote: »

Not if it means a cohort of around 20% of the population are paying for everything while 80% pay next to nothing.

Not only is it not fair, it's also economically damaging (as those higher rate taxpayers flee the country) and it's also socially dangerous. The 80% will have no skin in the game and predictably will vote more and more left as "someone else" will be paying for everything.

Where are you getting these figures from?

Ninthlife · 21-05-2021 9:52am

Fred Cryton wrote: »

Ireland already has some of the highest marginal tax rates, north of 50% taken off us in the private sector

Is there a different tax rate for those outside the private sector?

Fred Cryton · 21-05-2021 9:57am

Ninthlife wrote: »

Is there a different tax rate for those outside the private sector?

The public sector are a net cost to the State. A financial burden. Only the private sector generates taxable wealth.

barry181091 · 21-05-2021 10:03am

We really should be charging employers more PRSI, along with an increase for employees but the employer portion is low by European standards. We can't have world class services without a comparable tax take, which you can't just take from income tax alone.

Chips Lovell · 21-05-2021 10:04am

Fred Cryton wrote: »

This is a nonsense because you're including low earners here. Low earners pay very little tax in Ireland, way too little. That is where any tax burden should be focused, as you have demonstrated.

Not really, if you do the sums. For example, the chart has the Irish average of income tax a little under 20%. A couple with a combined income of 100,000 (which is a decent haul) will pay around 19% in income tax.

lawred2 · 21-05-2021 10:05am

Allinall wrote: »

"Progressive" in a taxation sense means that those that earn more pay more.

Surely this is a good thing to be aiming for?

aiming for?

what would you describe the current system as?

fael · 21-05-2021 10:06am

Time to tax lower paid workers this time. I'm in the tax bracket where I'm screwed with the 50+% marginal rate (USC included). I've lost most off my job in the pandemic (aviation). And while other countries have supports in place for staff, my support is running out (because I haven't lost my job entirely, I can only get JB, which runs out in 11 days from now). But government is happy to screw me even more, assuming aviation still exists at the end of this year. It will elsewhere in Europe, but Ireland will be decimated.

If they want to do something progressive I actually think they should give people that have had a large decrease in income during a pandemic a tax break equivalent to that decrease. Most groups (70% in earlier newspaper articles) have had the same or more income during the pandemic, and thus have not been hit financially. That other 30% should be allowed to build up some financial resilience again. I'm working 2 jobs now instead of 1 and I'm still barely able to pay my bills.

21-05-2021 10:06am

WOKE BRIGADE ROBBING MUH TAXES!

Allinall wrote: »

"Progressive" in a taxation sense means that those that earn more pay more.

Precisely.

super_furry · 21-05-2021 10:06am

Fred Cryton wrote: »

Not if it means a cohort of around 20% of the population are paying for everything while 80% pay next to nothing.

Really interested to see if there's anything factual backing this up.

lawred2 · 21-05-2021 10:09am

Chips Lovell wrote: »

Not really, if you do the sums. For example, the chart has the Irish average of income tax a little under 20%. A couple with a combined income of 100,000 (which is a decent haul) will pay around 19% in income tax.

why did you ignore PRSI and USC which are also progressive taxes?

Adds another 14k to that households total state mandated deductions.

Ninthlife · 21-05-2021 10:09am

Fred Cryton wrote: »

The public sector are a net cost to the State. A financial burden. Only the private sector generates taxable wealth.

Thats not what I asked

lawred2 · 21-05-2021 10:09am

Deleted User wrote: »

WOKE BRIGADE ROBBING MUH TAXES!

Precisely.

Is this declaration supposed to some sort of revelation?

21-05-2021 10:14am

Fred Cryton wrote: »

The public sector are a net cost to the State. A financial burden. Only the private sector generates taxable wealth.

So a nurse providing hospice care is a "financial burden". Right so.

Fred Cryton · 21-05-2021 10:14am

Chips Lovell wrote: »

Not really, if you do the sums. For example, the chart has the Irish average of income tax a little under 20%. A couple with a combined income of 100,000 (which is a decent haul) will pay around 19% in income tax.

Thats the same as a single person on 50k. That person only pays 20% because they pay nothing at all on the first 20k.

So again, lower earners need to pay more tax in Ireland.

21-05-2021 10:17am

super_furry wrote: »

Really interested to see if there's anything factual backing this up.

It’s true of income tax. In fact income tax didn’t even fall much during covid with 300k mostly low paid workers laid off.

Other taxes exist though.

21-05-2021 10:19am

[Deleted User] wrote: »

So a nurse providing hospice care is a "financial burden". Right so.

Well in terms of net tax they are. That’s a financial reality. We can’t fund government services with the tax taken from the public service. Obviously. The tax taken from the public sector is money not received by public sector worker but it isn’t money received by the government.

suicide_circus · 21-05-2021 10:24am

Allinall wrote: »

"Progressive" in a taxation sense means that those that earn more pay more.

Surely this is a good thing to be aiming for?

Absolutely. But a large cohort of low paid workers paying NO income tax is wrong.

21-05-2021 10:40am

suicide_circus wrote: »

Absolutely. But a large cohort of low paid workers paying NO income tax is wrong.

Why?

timmyntc · 21-05-2021 10:42am

Deleted User wrote: »

Why?

Get the benefits of society without paying your fair share.

Also its not very safe from an economic point of view - ideally you have as wide a tax base as possible so that you are less susceptible to economic shocks

21-05-2021 10:43am

Maybe anyone deemed "non essential" should have their taxes deemed "non essential" too?

Chips Lovell · 21-05-2021 10:45am

lawred2 wrote: »

why did you ignore PRSI and USC which are also progressive taxes?

I didn't, my original post factored them in to demonstrate that the tax burden here is relatively low. If you do factor it in, it's still 25% or so, which is relatively unremarkable compared to most other countries.

Fred Cryton wrote: »

So again, lower earners need to pay more tax in Ireland.

Is there much more to be squeezed from low income earners? Bearing in mind that while income tax is progressive, other taxes like VAT and excise are regressive. And also that the cost of living here is relatively high. I don't see many low income earners having much left having paid for housing and other living expenses.

Mr. teddywinkles · 21-05-2021 10:45am

Theres at least a billion nearly every budget pumped into health. Wtf are they doing with the money. They not putting it into IT systems, that's for sure.

21-05-2021 10:46am

Deleted User wrote: »

Why?

Not paying tax is basically like being a child getting pocket money. Everyone should have to pay income tax, even if it's only a small amount on a low income.

21-05-2021 10:46am

timmyntc wrote: »

Get the benefits of society without paying your fair share.

Also its not very safe from an economic point of view - ideally you have as wide a tax base as possible so that you are less susceptible to economic shocks

They are working for less than a livable wage.

They are contributing more than their fair share.

21-05-2021 10:47am

Deleted User wrote: »

Not paying tax is basically like being a child getting pocket money. Everyone should have to pay income tax, even if it's only a small amount on a low income.

If people were being paid more than pocket money they'd be in a position to pay more in tax.

Mr. teddywinkles · 21-05-2021 10:50am

[Deleted User] wrote: »

WOKE BRIGADE ROBBING MUH TAXES!

Precisely.

Thats precisely the problem the higher earners are asked to carry all the burden again and again and again. Think a massive audit of all departments might be the best option here. Cut the fat. Maybe lads instead of attacking each other. Look at the wasteful government. Spending wily nilly on any ****e

timmyntc · 21-05-2021 10:52am

Deleted User wrote: »

They are working for less than a livable wage.

They are contributing more than their fair share.

No they arent - they arent contributing at all because they dont pay income tax!

crossman47 · 21-05-2021 10:54am

The elephant in the room is that our wealth and property taxes are very low. The property tax has not been touched since it came in. Our so called socialists oppose property and water charges (about the only socialist party anywhere to do so). Capital gain tax is lower than income tax. People want the amount of inheritance that will not be taxed to be raised (from c. 300K in the case of a son or daughter).

crossman47 · 21-05-2021 10:55am

timmyntc wrote: »

No they arent - they arent contributing at all because they dont pay income tax!

They buy stuff so they pay taxes.

timmyntc · 21-05-2021 10:57am

crossman47 wrote: »

They buy stuff so they pay taxes.

Yes, note that I said income taxes.
Tourists also buy stuff and pay taxes - so what?

Geuze · 21-05-2021 10:57am

suicide_circus wrote: »

Absolutely. But a large cohort of low paid workers paying NO income tax is wrong.

Yes, my parents pay 8% - 10% on 50k approx.

It is too low, given that they get:

two medical cards
two FTP
free TV licence
35 pm off elec / 420 pa

B2021M · 21-05-2021 10:58am

I think most people in Ireland dont understand that the private sector supports the public sector. It is never explained or discussed by media.

The attitude appears to be that welfare levels and public sector salaries/pensions must be at a certain level and then private sector workers have to pay whatever level of tax is required to support that.

crossman47 · 21-05-2021 10:59am

timmyntc wrote: »

Yes, note that I said income taxes.
Tourists also buy stuff and pay taxes - so what?

You said they weren't contributing at all since they don't pay income tax. They do by paying indirect tax. In fact, the share of their small income that goes back to government may well be greater then that of someone paying income tax, especially if they smoke.

Leroy42 · 21-05-2021 11:01am

B2021M wrote: »

I think most people in Ireland dont understand that the private sector supports the public sector. It is never explained or discussed by media.

The attitude appears to be that welfare levels and public sector salaries/pensions must be at a certain level and then private sector workers have to pay whatever level of tax is required to support that.

The public sector also supports the private sector. Who builds the roads, the water mains, the police, the education systems?

The taxes from private enterprise funds the public sector who enable the private sector to generate funds.

suicide_circus · 21-05-2021 11:01am

Deleted User wrote: »

Why?

Because everyone earning should contribute towards your own social insurance. This is a left wing position as old as the hills. Left wing politics in Ireland is big on people not contributing, be it water tax, property tax, free public transport. Contributing gives people a stake in society.

B2021M · 21-05-2021 11:01am

Allinall wrote: »

"Progressive" in a taxation sense means that those that earn more pay more.

Surely this is a good thing to be aiming for?

Why is this a good thing? Should everyone not pay the same percentage? Especially with all the focus on 'equality' these days.

crossman47 · 21-05-2021 11:02am

B2021M wrote: »

I think most people in Ireland dont understand that the private sector supports the public sector. It is never explained or discussed by media.

The attitude appears to be that welfare levels and public sector salaries/pensions must be at a certain level and then private sector workers have to pay whatever level of tax is required to support that.

And private sector workers don't understand that they pay taxes for the services provided to them by government (education, health, pensions, etc, etc)

AlfaZen · 21-05-2021 11:02am

I think we should be looking at a Marginal Flat Tax in order to widen the Tax base and have a fairer system.

Minimum wage is €10.20 per hour which is about €20k per year give or take.

So everyone gets up to €20k a year tax free. All remaining income is taxed at a single flat rate e.g. somewhere between 20% and 25%.

With this approach everyone contributes equally, there is less admin required and it does not penalise overtime as the current system does.

B2021M · 21-05-2021 11:03am

Leroy42 wrote: »

The public sector also supports the private sector. Who builds the roads, the water mains, the police, the education systems?

The taxes from private enterprise funds the public sector who enable the private sector to generate funds.

Most of this could be done privately and funded by the consumer. Of course we need some public sector but it is far too big.

B2021M · 21-05-2021 11:04am

AlfaZen wrote: »

I think we should be looking at a Marginal Flat Tax in order to widen the Tax base and have a fairer system.

Minimum wage is €10.20 per hour which is about €20k per year give or take.

So everyone gets up to €20k a year tax free. All remaining income is taxed at a single flat rate e.g. somewhere between 20% and 25%.

With this approach everyone contributes equally, there is less admin required and it does not penalise overtime as the current system does.

Completely agree. This is the fairest system.

timmyntc · 21-05-2021 11:06am

crossman47 wrote: »

You said they weren't contributing at all since they don't pay income tax. They do by paying indirect tax. In fact, the share of their small income that goes back to government may well be greater then that of someone paying income tax, especially if they smoke.

You cant measure someones contributions via consumption taxes because they vary so much from person to person. Its also an awful way to base state finances on.

And I very much doubt that someone paying 0% income tax pays more of their salary to the govt in consumption taxes alone than someone paying higher rate does in income + consumption taxes combined.

Leroy42 · 21-05-2021 11:07am

B2021M wrote: »

Most of this could be done privately and funded by the consumer. Of course we need some public sector but it is far too big.

Yeah, because the M50 in private hands was a great success!

Or house building, and rental left entirely down to the private sector has worked a treat. And the Health service. Check out the US if you want to see a private health system in operation.

Far too big, based on what? Too many people working in it, too much money spent on it? What should we be spending? How many people should be working?

B2021M · 21-05-2021 11:07am

crossman47 wrote: »

You said they weren't contributing at all since they don't pay income tax. They do by paying indirect tax. In fact, the share of their small income that goes back to government may well be greater then that of someone paying income tax, especially if they smoke.

Everyone pays indirect taxes. Smoking is a personal choice.

ESRI says we need more "progressive" taxes lol

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