Taxed to the hilt

These are clichés that resonate well in Ireland but they are a myth.

CGT is indeed very high I'd change this immediately. It discourages investment and fuels property bubbles.

But CGT is NOT calculated in overall tax burden for international comparisons, while VAT indeed is. All "hidden tax levies" are negligible in effect in terms assessing average tax burden and comparing countries.

The notion of Irish HIGH taxes is... a myth. They are low to the average, even if I include "hidden duties".

Please show me a comprehensive analysis of average tax burden for an average/median person including income taxes, social insurance, compulsory medical insurance and VAT between European countries.

I made the analysis based on Institut Molinari paper and the conclusion is clear.

You can start here and take it from there:

Low earners pay no tax here. The 40% higher rate is not high, it's much higher in France, Belgium, Scandinavia etc.

Examples:

55k gross here gives you the same net salary as

56k gross in Spain

58k gross in Sweden

59k gross in Denmark

61k gross in France

62k gross in Austria

63k gross in Netherlands

63k gross in Germany

64k gross in Finland

64k gross in Italy

69k gross in Portugal

70k gross in Belgium

Assuming similar tax credits and personal situation. And I'm not counting much higher Employer's social security payments in virtually all EU countries. They are amongst the lowest here hence social system especially pensions is very weak here (2nd lowest state pension in OECD).

As I said cost of living is high here but it ain't taxes.

The reality is that the Irish government and the Irish electorate are cheapskates, tight-purses, however you name it.

It's impossible to build European grade infrastructure, health care or public services with such LOW taxes as they are here.

The point is that by millions paying little bit more tax the government gets money to invest in infrastructure, services etc. Most European countries concluded, on population level, that everyone paying little bit more pays off in the end by getting infra and services. Ireland has not reached that conclusion yet and on the contrary the population is opposed to this idea, this myth of high taxes only exacerbates the notion. This thread demonstrates that too.

The higher 40% doesn't have to change much to accomplish this. But there should be more bands especially on the lower side. So it's not about tax the rich, but tax everyone. I could imagine 10%, 20%, 30% and 40% tax bands to start with. 0%, 20% and 40% is not a good system.

Overall level of taxation is not a term that is used in academia, OECD etc. It's extremely challenging to calculate. It is basically not done for international comparisons for that reason. Hence, it's really pointless to discuss that, because you can't demonstrate, calculate and compare that between countries.

Income tax, mandatory social & medical insurance contributions and estimated VAT effect it the best data that's used for tax burden comparisons. That's the best method. And in that method Ireland is low-average at worst.

For example:

The Tax Burden on Global Workers - A Comparative Index - First Edition, 2021 - Institut économique Molinari (institutmolinari.org)

Note: I've minor in Economics, just FYI.

Exactly, very high labour costs here -> higher overall price level -> higher labour costs. Plus add quite high VAT to it, that only exacerbates it.

The government here balances it by very LOW social employers' as well as employees' contributions (taxes), to keep the labour costs in check else they'd be not competitive at all.

As a blow-in, I find the "water charges" thing so bizarre - you pay for water in the whole EU, this has been in place in Europe for several decades, I'd guess since after the WW2 including the Eastern block. It's so bizarre, it's like saying electricity or gas supply should be free. You have to pay what you consume, it's an essential service but must be paid per unit of consumption just like the electricity. Parodixically, free water for all regardless of consumption is totally SOCIALIST, that even Socialist Eastern Block countries didn't have this in place 😎

And yes "Taxes are too high" in Irish context is a populist argument, nothing else.

If you want a functioning civilised society with a functioning EU-grade infrastructure and public services everyone needs to pay income taxes. It's not about the rich, the "squeezed in the middle", the poor - but everyone. Unless you want to end up in a PIIGS situation again by borrowing to the point of bankruptcy. One more option is crappy infra and public services - anyone wants that?

Btw - Irish Gov Debt:GNI ratio is 110% which is alarmingly high.

Marginal tax rate you mentioned is quite irrelevant without internal comparison for the same target group etc.

Irish taxes are simply not high in any sense, however you look at it.

Good analysis here:

Comparing Irish Income Taxation Rates with other EU Member States | Public Policy

Ireland is demonstrably on the lower-average to lower end in all target groups. In line with my pervious posts.

Speaking of taxes and how the government does a lot of it by shifting or inducing costs...

"The majority of the new Climate Action Plan's costs will fall to individuals, households and the private sector, not the State, the coalition leaders have confirmed.

The €125 billion plan"

When this was first announced, the first thing I wondered was how many additional public sector workers, the sector would tell the government needed to be employed to enact and oversee the plan, because there isn't a hope in hell of a magical productivity transformation in that sector which would see them adding any of that to their plates. Of course that additional staffing cost, which by it's nature is always shoulderd by the taxpayer, will be in addition to that €125 billion.

How does this compare when all income taxes (PAYE, USC and PRSI) is included and how is the return for the tax payer for paying this tax? How good is Ireland's Public services in comparison.

The very high price level here is not due purely to high wages.

Wages are high, yes, but not very high.

Our consumer price level is 138.3 compared to EU = 100, that is the price level for AIC.

See here:

Our labour costs are high, yes, but they are 10th in EU, and are just at the eurozone average.

For an individual it doesn't really matter what the average tax take is. In Ireland we have a high marginal rate kicking in early. It means that in comparison to somewhere like Germany, when you hit around 120k or so, the tax payable is around the same. Lower paid, say 20k or so would pay far more in Germany. I think you also need to compare service provided, which in Ireland are terrible, we need to pay for dental, health insurance, medications, doctors visits. The state pension system is one size fits all with your previous earnings not taken into account.

Where else would someone on your income take home more of that at their marginal rate, precisely? Remember to include social insurance as most people who do these comparisons grab what looks like a low income tax rate and ignores a 10+% social insurance charge.

And how much would their property tax (which can apply to renters, e.g. in the UK), local taxes (if they exist), water charges etc be?

Without knowing your exact income, which I don't expect you to state, I can't do a specific tear down. But it's highly unlikely that the total tax take was actually lower in France, Germany or the UK - with hefty social insurance and property / residence taxation. Or the US when you pay for health insurance

And I can tell you that the actual hard figures don't agree with you in any of those cases.

Marginal tax is a bit academic, it doesn't tell an average person much and it's pretty bad at comparing countries because income tax on its own is only one of main elements of overall taxation in the EU.

Social insurance is not included, medical insurance is not included.

Social insurance is low here in EU terms and there's no mandatory medical insurance.

Other EU countries have much higher social insurance and most have mandatory medical insurance. These are types of taxes or are considered as such in the EU. Also, you should use an average

If you add it all together Irish tax burden is belie average.

"High taxes" myth collapses at even a mild scrutiny. Maybe we should define what is high and for whom they are high.

We should take average or median salary in the country and compare the tax burden between the countries. High would be in the 1st quartile in the EU in my book. Ireland isn't clearly there, it's in the 4th quartile in fact.