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Taxed to the hilt

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    #182
    touts
    Registered Users Posts: 6,449 ✭✭✭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.



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    #183
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


    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.



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    #184
    Geuze
    Registered Users Posts: 13,145 ✭✭✭✭Geuze


    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.



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    #185
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


    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...

    Post edited by McGiver on


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    #186
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    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.



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    #187
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 67,951 Mod ✭✭✭✭L1011


    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



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    #188
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    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.



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    #189
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 67,951 Mod ✭✭✭✭L1011


    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!



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    #190
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    What are we doing now. Picking one or two countries where one tax is higher than in Ireland? Thats weak tbh :)



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    #191
    growleaves
    Registered Users Posts: 7,724 ✭✭✭growleaves


    I pay taxes and other people are on welfare 😟



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    #192
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 67,951 Mod ✭✭✭✭L1011


    https://www.boards.ie/discussion/comment/118350684#Comment_118350684

    You ignored my country selection when it using specific countries you claimed to have paid less tax in, to show that unless you had very specific edge-case earnings, that isn't the case.

    The point in general is that Ireland is not high tax and people who insist it is are wrong.

    Poor services for what we pay is a different point entirely; but we are not paying for Germany/Scandinvian/French/even UK local level services anyway.



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    #193
    Sam Russell
    Moderators, Science, Health & Environment Moderators Posts: 19,429 Mod ✭✭✭✭Sam Russell


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

    VAT is not charged on VRT.

    VAT is charged on the invoice price. VRT is charged as a percentage of the OMP (on the market price).



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    #194
    Cyrus
    Registered Users Posts: 19,868 ✭✭✭✭Cyrus


    https://www.boards.ie/discussion/comment/118350967#Comment_118350967

    Unless i am wrong, on a new car, vat is charged on the vrt inclusive price. so you are paying vat on vrt.



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    #195
    monseiur
    Registered Users Posts: 1,220 ✭✭✭monseiur


    https://www.boards.ie/discussion/comment/118036975#Comment_118036975

    But the tragedy is Sam we have the same. We have an abundance of natural gas off our coast which we handed over to the private sector. Explorations carried out by Providence Resources in the Barrymore oil well off the Cork coast estimated a production of 1.7 billon barrels of oil. Prelimenary explorations off the coast especially the north, west and south have shown potential oil reserves double North Sea Oil. But alas, thanks to pressure from the delusional Greens and others like the climate advisory council, the Irish goverment announced back in September 2019 that all oil exploration off the coast of Ireland is to be phased out. We're living on borrowed money yet we are sitting on a gold mine and refuse to touch it.......imagine if the Chinese had such a natural resource on their doorstep !



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    #196
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


    https://www.boards.ie/discussion/comment/118348142#Comment_118348142

    Marginal tax rate is an excellent academic exercise and abstract concept largely irrelevant to the average Joe...

    As I see it, this value is thrown around in Irish discourse to "prove" Irish tax burden is high and perpetuate the myth. So the average Joes believe it that income tax burden is high here on population level, in macro numbers, and is opposed to increase/reform of Irish tax system.

    Turkeys voting for Xmas. ...

    I've provided numerous decent studies including from the EU showing that Irish tax burden (on income) is overall (for vast majority of the) is below EU averagw. That by definition is not "high taxes".

    What does this marginal tax rate value say to an average Joe? Nothing.

    How is the value relevant for the overall government tax take and expenditure options? Not much.

    It's an academic synthetic indicator.

    What I do agree with you @Geuze is that the structure of the income tax is off here... I'd propose 15-30-45 or something which would be similar to other EU countries that don't have a flat rate (most don't) but can't see that happening here 😎



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    #197
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


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

    Thanks finally some reality check.

    Also to note that 50k isn't taxed 40% here, only the excess over I think 45k, below that is 20%.

    In Germany at 50k you're taxed 60% overall including medical, as you said.



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    #198
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


    https://www.boards.ie/discussion/comment/118350634#Comment_118350634

    Yup and that's before we look at the Dutch motor tax. Roughly 3 times more for polluting cars, esp diesel, like for like.

    The government here are cowards to go for a similar system that encourages switch to electric or less polluting cars. Totally car lobby influenced.



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    #199
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


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

    Saying that others are wrong is no evidence.

    Show us the evidence. Numbers, data, comparison between countries with actual examples for low, average and above average incomes.

    I worked and lived in several countries in the EU, plus have friends in others, plus was looking at jobs in others so I ran tax calculators as part of the job research. So I can say I know them situation very well. What you're saying is simply false.

    Overall tax burden Ireland is amongst the lowest in the EU.

    Only flat tax countries like Estonia would be lower taxed, or Cyprus or Malta which are micro tax havens.

    Ireland gross 48000 - 36193 net

    Germany gross 48000 - 33801 net



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    #200
    Podge_irl
    Moderators, Sports Moderators Posts: 25,777 Mod ✭✭✭✭Podge_irl


    https://www.boards.ie/discussion/comment/118351228#Comment_118351228

    That not a drop of oil has ever come out of these supposed reserves should tell you all you need to know about how viable they actually are.



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    #201
    Sam Russell
    Moderators, Science, Health & Environment Moderators Posts: 19,429 Mod ✭✭✭✭Sam Russell


    https://www.boards.ie/discussion/comment/118351093#Comment_118351093

    Sorry, but you are wrong.

    From the revenue Tax manual.

    https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-transactions-motor-vehicles.pdf

    4.1 Value-Added Tax (VAT) charges on new vehicles bought and sold by an authorised motor dealer

    In general, VAT is due (at the standard rate) on the full purchase price received by a dealer for any vehicle. However, in the sale of an unregistered vehicle by an authorised dealer, Revenue will accept that the portion of the purchase price that represents the VRT liability is paid by the dealer in the name and on the account of the purchaser; i.e., the customer pays the VRT, and the dealer simply administers the payment from the money handed to him or her. Accordingly, the VAT liability on the sale of a new vehicle by an authorised motor dealer is generally calculated on the VRT-exclusive amount received from the customer. (This also applies in the case of a second-hand or used vehicle brought into the State by an authorised dealer, and sold by him or her prior to being registered in Ireland). In the case of the sale of a registered vehicle, a VAT liability arises on the full VRT-inclusive amount received, and no adjustment is allowed.

    The VAT is paid be the customer before VRT, which is then paid after purchasing by the customer. This is a subtle difference, but is important. It is a registration tax, not a purchase tax. If you import a car here that is subject to VAT and VRT, the VAT is charged on the invoice price (plus shipping plus import duty, if that applies). The VRT is calculated by a completely different system based on the open market value in Ireland. So you could buy a bargain for €5,000, but it has a value in Ireland of €20,000. Vat is calculated on €5k, but VRT is calculated on OMP of €20,000.

    [Actually, the calculation of VRT is based on the original new price - discounted for age, condition, and mileage - or, well, sort of].

    [For example, they do not list Porsche cars at all - each is individually valued, as are most high powered expensive models].



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    #202
    Sam Russell
    Moderators, Science, Health & Environment Moderators Posts: 19,429 Mod ✭✭✭✭Sam Russell


    https://www.boards.ie/discussion/comment/118351228#Comment_118351228

    I think you are talking politics there. Sept 2019 predates the Greens taking over that ministry.

    Pat Rabbitte when he was the minister responsible defended that position saying that no-one was queueing up to take up the exploration licences. The oil or gas might be there, (we have yet to get a single barrel of oil), but the experience of the Corrib Gas might make them nervous.

    Besides, it will still be there in 50 - 100 years if we need it.



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    #203
    Ash.J.Williams
    Registered Users Posts: 20,929 ✭✭✭✭Ash.J.Williams


    https://www.boards.ie/discussion/comment/118351228#Comment_118351228

    Trust me when we reach the end of the worlds oil reserves, Ireland’s oil and gas will be taken at gun point



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    #204
    Cyrus
    Registered Users Posts: 19,868 ✭✭✭✭Cyrus


    https://www.boards.ie/discussion/comment/118352326#Comment_118352326

    i stand corrected!



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    #205
    Sam Russell
    Moderators, Science, Health & Environment Moderators Posts: 19,429 Mod ✭✭✭✭Sam Russell


    https://www.boards.ie/discussion/comment/118352937#Comment_118352937

    Tax is a complex business and not well understood by most taxpayers. Many pay more than they should because of this.



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    #206
    Geuze
    Registered Users Posts: 13,145 ✭✭✭✭Geuze


    https://www.boards.ie/discussion/comment/118351348#Comment_118351348

    We agree that effective direct taxes on typical incomes are not high by EU standards. Okay.

    However, I feel you are too quick to dismiss the marginal rate as an "academic exercise...abstract concept".


    Lots of workers offered overtime / payrise / promotion know all about marginal tax rates on any extra income, and it may well have behavioural responses.

    Is it reasonable to say that some people refuse overtime / extra hours / don't go for promotion / or look to be paid cash-in-hand, and this is related to the 48.5% marginal tax rates?

    I think so.



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    #207
    McGiver
    Registered Users Posts: 4,434 ✭✭✭McGiver


    https://www.boards.ie/discussion/comment/118353897#Comment_118353897

    Still academic. What matters is the effective tax rate.

    48000 gross - 36193 net - effective income tax including social contributions = 24.6%

    65000 gross - effective tax rate 30.8%

    Single person, no children, or any special tax credits, the worst personal situation in terms of tax.

    That's not a high tax. And it's not the usual 40% peddled around and marginal tax rate of 58% rate is irrelevant...

    Can you articulate your point?



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    #208
    monseiur
    Registered Users Posts: 1,220 ✭✭✭monseiur


    https://www.boards.ie/discussion/comment/118352294#Comment_118352294

    Actually, the fact is that the wells were proven to be very viable. Back in September 2019 Leo Varadkar was Taoiseach, he announced at a meeting of the United Nations that Ireland was banning all fossil fuel exploration on foot of scientific advise about it's climate impact. This scientific advise was given by the Climate Change Advisory Council (the greens in disguise, Sinead O Brien et al.) Sean Canney was minister for state in the relevant department at the time, it was he who brought the original memo to cabinet which gave this ban leagal standing. When dealing with other goverments, EU, UN, COP26 etc. our leaders will do anything to be 'best boy in the class' irrespective of the long term economic & financial cost to our country. We are sitting on a pot of gold and are too meek & submissive to mine it case some one somewhere be offended, where would the likes of Norway be today if they had that attitude ?



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    #209
    monseiur
    Registered Users Posts: 1,220 ✭✭✭monseiur


    https://www.boards.ie/discussion/comment/118352358#Comment_118352358

    Of course I'm talking politics, the decision to ban all fossil fuel explorations was a political one by Leo Varadkar as Taoiseach back in September 2019 The Greens were/are very influential in the background and are pushing their agenda through the likes of the Climate Change Advisory Council and numerous other bodies, they have doubled their influence over the last few years with their leader as minister.



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    #210
    Cyrus
    Registered Users Posts: 19,868 ✭✭✭✭Cyrus


    https://www.boards.ie/discussion/comment/118355282#Comment_118355282

    Its all a matter of perspective, if you are a low to average earner, your overall effective rate of tax is comparably low. What most people look at it though is what do i get taxed on incremental pay and in most cases the tax take is higher than the personal take 52/48.

    If you are a high earner and get a bonus on top you get well into the low to mid 40s pretty quickly.



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    #211
    Geuze
    Registered Users Posts: 13,145 ✭✭✭✭Geuze


    https://www.boards.ie/discussion/comment/118355282#Comment_118355282

    My points are as follows:

    (1) effective direct tax rates are not very high, I agree

    (2) most people do not know or calculate their own effective tax rate

    (3) most workers focus on the marginal rate on any extra income (perhaps they shouldn't, but they do)

    (4) this may be one reason why people think Ireland is high tax, even though we both know it isn't

    (5) top marginal tax rates of 50% are common in many EU countries

    (6) where Ireland is very unusual is the point at which workers/earners reach the top MTR, as low as 36k approx for single people, below median FT earnings

    (7) the 48.5% MTR on 36k upwards does has an effect on people's decisions.



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