Taxed to the hilt

https://www.boards.ie/discussion/comment/118350619#Comment_118350619

Your experience must be based on some exceptionally edge case earnings that were somehow precisely in each countries taxation sweet spot.

Because for normal people, that just isn't the case.

And if you think VRT is high, I invite you to take a look at the rates of the equivalent tax in the Netherlands and Denmark!

https://www.boards.ie/discussion/comment/118350574#Comment_118350574

Not earning 50K, but that is my experience that I pay the highest rate of tax in Ireland than anywhere I have lived before. We get taxed more in Ireland than those countries. We also pay higher VAT and we also pay more stealth taxes and get less for them and we also pay VRT. Oh, and dont forget we pay VAT on VRT too. A tax on a tax ffs.

https://www.boards.ie/discussion/comment/118350113#Comment_118350113

Except your alleged personal experience simply doesn't actually work in reality. Particularly as you are trying to make claims about marginal rate and its impact on overtime and so on, so we're not looking at allowances etc

Lets take a 50k salary. In Ireland you have 40% income tax, 4.5% USC and 4% USC for 48.5%.

For Germany its ~40% income tax, 9.35% pension tax, 7.3% health insurance, 1.5% unemployment insurance and an over 1% care tax that varies by lander - and before January 2021, 5.5% solidarity tax So your marginal rate would have been 60%, or over 65% before this year.

For France you'd have 30% income tax, but over 20% in assorted social insurance payments (pension, unemployment, health and various surcharges on these) for a marginal rate of ~52%

Both those countries have further local taxation (variously property, TV licences that apply to radios and cars etc) but I'm just looking at your inaccurate claims about direct income tax here

https://www.boards.ie/discussion/comment/118344333#Comment_118344333

Expect that you are totally wrong.

I have given several coiuntries above that I hqave actually worked and paid tax in where i paid far higher tax then in Ireland. I also mentioned VAT, stealth taxes and VRT.

The plain truth is that once you are in the high tax bracket (which it doesnt take much to get into) then anything else you earn (overtine, second job, bonus, BIK) you will be taxed to death on, far more than in any other country.

Out of any country i have paid tax in, Ireland is also the one where you get less for it too.

We are squeezed to death here. The only possible way anyone could say we are in a low tax economy is if you are on a low salary.

https://www.boards.ie/discussion/comment/118344533#Comment_118344533

Yup and Denmark manages to create 50-100% higher gov expenditure with LESS deficit.

Danish tax rates:

Minimum 12%

Municipal 25%

Labour 8%

Top bracket 15%

Also, these are combined but I believe there's a cap.

The 0-20-40 here is a terrible system. And course everything centralised too, outside of the Pale are beggars...

15-30-45 or something would make more sense but no gov here would do it i.e. increase taxes for the lower income bracket...

It is true that effective direct tax on median earnings here are lower than in many other EU countries.

However, facing a 48.5% marginal tax rate on below average earnings is not typical.

https://www.boards.ie/discussion/comment/118325627#Comment_118325627

Yep this all quite true. But how is 120k salary relevant? What's the overall effect on population level? People with 120k wage are not a relevant group in macro numbers.

If you take median salary the overall tax burden is on the lower end here vs EU countries. Incomes around the median constitute quite a significant group.

As I said 55k gross here gives the same net than 63k gross in Germany. Like for like person, same/similar tax credits etc.

The extra 8k collected for a relatively slightly above average wage (55k/63k) in Germany makes a huge difference in government expenditure options if you consider the population level... The same goes for all low income groups where there's no tax collected here whereas there's tax collected in Germany.

What you get back for your taxes here vs Germany is for a new thread altogether. I agree the bang for the buck is pretty bad here. Saying that, if you take overall gov tax (incl social contr.) take from all income quartiles (or deciles), it is quite low here, so no wonder Irish gov can't do magic with that amount of money and do EU grade infrastructure projects or decent pensions etc.

The Irish budget is pretty lean...

2021 Denmark expenditure - 167 billion

2021 Irish expenditure - 87 billion

Edit: we're talking about income taxation... Wealth taxation is a bit different topic.

touts

If you are working then wait until you see the tax bill Sinn Fein will hit you with. They have made so many "you can have everything you want and someone else will pay" promises the only way they can pay for it is to make anyone with a job fall into the "someone else" category.

[Deleted User]

https://www.boards.ie/discussion/comment/118344318#Comment_118344318

taking the median hides the high tax rate which comes in at just higher than the median. I’ve said that we have too low a rate under the median and too high above it, compare to Denmark.

https://www.boards.ie/discussion/comment/118326023#Comment_118326023

Populist cliché. Cherry picking as well.

Average Joe in Ireland pays much more less income tax + social insurance + medical insurance + VAT than average Jean in Belgium or average Johann in Germany. And that's the point 😎

https://www.boards.ie/discussion/comment/118250193#Comment_118250193

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.

https://www.boards.ie/discussion/comment/118331861#Comment_118331861

Thats just not true.

Show us these hard figures you have then?

https://www.boards.ie/discussion/comment/118331850#Comment_118331850

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

https://www.boards.ie/discussion/comment/118331562#Comment_118331562

I can tell you that having worked in all of those countries and paid tax them, Ireland is indeed the worst for tax. Its also the worst for cost of living, the worst for what you get for taxes, the worst for stealth taxes and dont get me started on the likes of VRT and VAT.

This country sucks money out of you from all angles with taxes in various hidden and not so hidden forms.

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

https://www.boards.ie/discussion/comment/118327308#Comment_118327308

Of the places I have worked and paid tax in over the years. France, UK, US, Germany, Australia. Im sure there are plenty more but i havent paid tax in any other country. But all the ones i have paid tax in its a lot better than here for sure. Over 50% tax on my overtime is very hard to swallow.

I dont pay property tax myself, but I can tell you you get a hell of a lot more for your taxes in other countries too. Stealth taxes in Ireland are worse than anywhere else too. But feel free to do a break down of the taxes paid in each of those countries if you dont believe me.

https://www.boards.ie/discussion/comment/118326023#Comment_118326023

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?

https://www.boards.ie/discussion/comment/118250110#Comment_118250110

I just got paid for the month of November.

I did loads of overtime, busted my gut for it. I got paid over €1000 for the overtime. less than €500 went into my bank account. You are welcome revenue.

Dont anyone try to tell me that this is a low tax economy.

HerrKuehn

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.

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=GDP_per_capita,_consumption_per_capita_and_price_level_indices#Price_levels_in_Europe

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.

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Wages_and_labour_costs

https://www.boards.ie/discussion/comment/118249988#Comment_118249988

It is false that the overall level of tax is not calculated or compared by Eurostat / OECD / IMF, etc.

It is a term used.

Here you go:

https://ec.europa.eu/taxation_customs/document/download/e1cd9cea-c7de-43b3-9f25-b5bdd410244e_en

https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/taxation-trends-european-union_en

https://www.oecd.org/tax/revenue-statistics-ireland.pdf

fliball123

https://www.boards.ie/discussion/comment/118249388#Comment_118249388

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.

fliball123

https://www.boards.ie/discussion/comment/118249388#Comment_118249388

cnocbui

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"

https://www.breakingnews.ie/ireland/climate-action-plan-costs-to-largely-fall-on-households-and-private-sector-1209201.html

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.

cnocbui

Now add the cost of owning a car, where motoring taxes and fees makes up 10% of total government revenues.

"...Government which charge the highest taxes and driving fees in the EU....Ireland tops the league for the cost of taxing and insuring a car, and is second only to Holland for the cost of buying a new car."

https://www.independent.ie/life/motoring/car-costs-in-ireland-are-close-to-highest-in-europe-survey-reveals-26223392.html

This is not a small deal They usually say car ownership is the second highest lifetime expenditure after housing. I suspect it is probably higher in this country.

Might as well chuck in tertiary education fees as well. And while we are there, by at least one metric, Ireland has the second highest childcare costs in the EU, which might be explained by it having the lowest expenditure in the EU on provision of pre-school services.

The cost of living is high because the government make it so - deliberately. It doesn't count as taxation, which is intentional, not least because of the prohibition on state support for industries in the EU, but it's there in spades. The example of the covert subsidisation of the Pharmaceuticals industry I mentioned is just one. Can you explain to me the logic behind legislation that dictates that a brand name drug can be sold over the counter, but that a generic version of the same drug can't, and that the on-costs of obtaining that same drug that retails in the Uk for €4.50 amount to €57 on top of that?

Ireland's 'cute' to the gills public sector has perfected the end run around EU legislation to subsidise industries at the expense of the consumer. VRT blatantly replacing import duty and protecting the local sellers from UK imports is probably the standout. Common market my arse.

What happens when you make car insurance compulsory, with no regulation of the fees the industry can charge while having a legal system with no limit on payouts?

Unfortunately it has been expunged from the internet, but years ago you could find an Irish newspaper article, from around 2004?, that claimed that the Irish vehicle insurance industry made more profit than the combined total profit of the UK car insurance industry.

The net effect of using legislation configured to provide industry subsidies is the same as if the government increased income tax and then handed out massive subsidies directly to all of it's pet industries.

The government seems particularly fond of the insurance, legal and banking industries. The Irish government deliberately reduced competion by driving out several foreign banks, namely Rabo and Ulster bank.

And I haven't even got to CGT and CAT yet.

[Deleted User]

https://www.boards.ie/discussion/comment/118250110#Comment_118250110

I was talking about marginal taxation for a reason. It’s high and it comes in at a low multiple of the average income, see

https://taxfoundation.org/personal-income-tax-rates-europe/

Ireland’s 48% marginal tax comes in at 1.5 times average income. Germany’s 47.5% tax comes in at 5.4 times average income ie 282,000. in terms of the marginal rate and where it comes in Ireland is up there with the most taxed countries

And in fact because of how USC is calculated the average wage (or slightly above) is taxed about 46%. That used to be 48% so we have the highest rate at near the lowest wage at one stage.

The marginal is high but the tax paid by lower earners is low, and overall tax is average, in fact that’s what your last bold point says - Ireland has a highly distributionary tax system

Murph85

https://www.boards.ie/discussion/comment/118250064#Comment_118250064

its an appalling run country and very juvenile. There shouldnt be water charges, because water falls free, from the sky... Nobody should pay any meaningful tax, except the "elite" on 80k etc plus... How convenient that the massive majority of voters, want someone else to pay...

Its a joke, but I would scrap LPT , can be financed by not hiking welfare for a year or two... and of course it can be financed by economic growth alone... The biggest winners, will be those already robbed on marginal tax rates. The rest pay as good as nothing on their properties any way... Its a populist political move across the board and will reward those, hammered the most...

start hiking motor tax rates too and substantially. This can be used to further reduce the marginal rate of tax...

https://www.boards.ie/discussion/comment/118250052#Comment_118250052

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.

At average incomes and below, the Irish income tax burden is relatively low when compared to other EU Member States (MS)

...

Notwithstanding the lower income tax burden in Ireland relative to other EU MS, the OECD has highlighted that the Irish tax and welfare system is the most progressive and redistributive in offsetting market income inequalities (i.e. earnings from employment and self-employment, rents and investment incomes) (OECD, 2020)