Half dont pay tax

Richard tea · 29-09-2010 08:39PM #1

I have seen or read this a few times now--- around half of Ireland's working population don't pay any tax

Is this true? Who are they? I really don't get this.

Regards
Rich

Scofflaw · 29-09-2010 08:45PM

Richard tea wrote: »

I have seen or read this a few times now--- around half of Ireland's working population don't pay any tax Is this true? Who are they? I really don't get this.

Regards
Rich

About half the working population don't pay any income tax. Ronan Lyons has an interesting couple of posts on the subject:

* Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.
* Almost 770,000 people earned less than €17,000. Understandably, given tax credits, these workers paid a tiny amount of tax, €20m in total. Their average tax rate was about 0.5%.
* It’s in the middle, though, where things seem to go all screwy. The median earner, earning about €25,000, paid just 4% in income tax! As I argued before, we seem to have got ourselves into a situation where the typical Irish worker pays hardly any income tax and yet seems to think they are heavily taxed.

cordially,
Scofflaw

Richard tea · 29-09-2010 08:49PM

I see, can I assume that a large portion of them are below the threshold?

Scofflaw · 29-09-2010 08:54PM

Richard tea wrote: »

I see, can I assume that a large portion of them are below the threshold?

Basically so. The government spent most the last decade moving the tax base of the country away from income tax and onto property taxes (well, stamp duty).

That turns out to have been an almost comically bad move. Our government did exactly what banana republics do when the price of bananas is high - reduce the income tax base to gain votes, and bloat the civil service payroll.

cordially,
Scofflaw

monkeypants · 29-09-2010 09:06PM

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

Mr. Loverman · 29-09-2010 09:09PM

I remember reading that it's something like 10% of earners who pay 90% of the tax.

The concept of "tax the rich" to get Ireland out of its hole is grossly unfair.

Scofflaw · 29-09-2010 09:12PM

Another handy survey analysis: http://dublinopinion.com/2009/07/12/wages-and-class-in-ireland-an-analysis-of-the-national-employment-survey-2007/

cordially,
Scofflaw

Boskowski · 29-09-2010 10:32PM

monkeypants wrote: »

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

How is that shockingly low? The only shocking thing about is that to some it seems shockingly low implying that 500 per week is sh1t money.

On a more serious note:
Wouldn't surprise me one bit since half the country is on either 'money on the hand' or three day weeks plus supplements these days it seems.

daithicarr · 30-09-2010 09:25AM

interesting points. personaly i would be in favour of more taxs, i wouldnt mind paying a lot more once i could be sure it wouldnt go to bloating the civil service pay.

if we were to extend the tax net and increase the average tax paid from 4 % to 20 % what would the returns be like? is there anywhere you can view a break down of the tax return figures?

thebman · 30-09-2010 09:26AM

monkeypants wrote: »

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

That isn't low. I used to earn less than that and run a car and still save about 500 a month commuting into city centre.

People need to learn to budget in this country.

hobochris · 30-09-2010 09:34AM

monkeypants wrote: »

The median wage in this country is €25k? That seems shockingly low. I would imagine that most of that gets spent throughout the year and therefore a percentage goes back to the Revenue in VAT.

That really depends on your occupation, I'd consider that good money for an Admin job, but, a start off wage for a role requiring a degree for entry.

RDM_83 again · 30-09-2010 02:28PM

Why i the figure 25,000 the link gives a median of 29,000.
I'd also be curious if this figure for those in full time role or simply all adults ih the state.
Also the figure is a bit meaningless as the with everything in statistics you need an average and standard deviations (or simply a nice histogram).
The figure is made doubly meaningless because it is talking about individuals not tax paying units, a family with a breadwinner of GP and a part time secretary is a very well paid unit even though one is earning low wages.

Also on the fact that the richest few % pay the majority of tax is meaningless unless you come back with a statement of what percentage of the countries wealth they control?

http://www.irishtimes.com/newspaper/ireland/2010/0824/1224277445100.html

feicim · 30-09-2010 04:29PM

Mr. Loverman wrote: »

I remember reading that it's something like 10% of earners who pay 90% of the tax.

The concept of "tax the rich" to get Ireland out of its hole is grossly unfair.

LOL!

Indubitably old chap, god forbid they would have to sell the bentley!

Don't worry the poor wouldn't be getting it, the tax would be taken from the rich and given to the super rich (bank senior bond holders etc etc).

ArphaRima · 30-09-2010 08:49PM

I think this is the reason that the last few tax increases have been levies.

A levy applies to almost everyone. A straight percentage. Earn more - pay more. I expect to see more levies.

monkeypants · 02-10-2010 02:20PM

I just thought that it was kind of low for a median figure. If my understanding of median is correct, half of people earn less. Have we not been saying for years that we're paying ourselves too much?

onedmc · 02-10-2010 02:26PM

Why am I paying 35.9% of my income in tax if the wealthy are only paying 18% and the poor paying 0.5%

changes · 02-10-2010 03:05PM

1.5 Million Medical Card holders in the country -granted alot of them are children and unemployed. But many are in employment or working part time. They should have to pay the income levy and full PRSI contributions. And a little income tax would do no harm either.

Mr. Incognito · 02-10-2010 03:15PM

I could give a few pointers on this but I haven't seen any of these assertations backed up by links to any real data.

Rich people can afford tax advisors to minimise tax- that's why their rate is so low.

Middle income families get it in the ass.

You don't like it- don't vote for a curropt political party in bed with the developers.

Geuze · 02-10-2010 07:48PM

Part-time workers, students with summer jobs, etc., loads of reasons why people pay low or zero tax.

Currently, a single person starts paying tax at 18,300. If they pay rent, bins, etc., this could be 21k.

No income tax until 21k is one of the reasons lots of people don't pay tax here.

Also, if one person in a couple is over 65, then they are tax exempt up to 40k. So if they earn 750pw, they pay ZERO tax.

This means there are thousands of retired people paying zero tax, even if they earn 500-750pw.

Geuze · 02-10-2010 07:52PM

Here is the Revenue's stats report for 2008:

http://www.revenue.ie/en/about/publications/statistical/archive/2008/index.html

Here is the section on income tax:

http://www.revenue.ie/en/about/publications/statistical/archive/2008/income-distribution-statistics.pdf

Happy reading.............

Idbatterim · 02-10-2010 07:54PM

Why am I paying 35.9% of my income in tax if the wealthy are only paying 18% and the poor paying 0.5%

Why shouldnt you pay through the nose? you have probably gotten yourself a decent education and work hard. Would you not think about those less fortunate than you? who havent done anything to improve their situation?

Scofflaw · 03-10-2010 02:55AM

onedmc wrote: »

Why am I paying 35.9% of my income in tax if the wealthy are only paying 18% and the poor paying 0.5%

The wealthy aren't only paying 18% - I think you may have read the figure wrong:

* Ireland’s top 0.5% of earners, the 11,714 people who earned more than €275,000 in a year, paid almost 18% of all income tax, over €2bn in total. Their average tax rate was 27.5%.

The average tax rate for the wealthy is 27.5% on their total earnings, not 18% - the latter figure is the proportion of all income tax paid by the top 0.5% of earners.

Are you actually paying 35.9% on your total earnings? If so, you're probably one of the top-rate taxpayers in the country!

slightly puzzled,
Scofflaw

Dob74 · 03-10-2010 10:11AM

Richard tea wrote: »

I have seen or read this a few times now--- around half of Ireland's working population don't pay any tax Is this true? Who are they? I really don't get this.

Regards
Rich

It should be income tax. If you are a PAYE worker you get a tax free allowance of 1830 + 1830 personal allowance.
3660/20%= 18300
so everyone who is a PAYE worker does not pay income tax on the first 18300.
The reason why half of irish workers dont pay income tax is that they earn a fairly poor wage under 18k.
But all these workers still pay all the other taxes VAT, Ex duties, PRSI, income levies etc.

Income tax is a third of total taxes so the other two thirds is paid by everyone else.
Accounting firms that specialise in legal tax avoidance schemes for high earners are constantly being given a free run on radio and in the newspapers to moan about the low paid paying no tax.
Personally I am getting sick of listening to there BS.
If top civil servants and the heads of the semi-states want to moan about there income levels, than they should have have there salaries cut so they can live like the rest of us.

djpbarry · 03-10-2010 10:36AM

Dob74 wrote: »

The reason why half of irish workers dont pay income tax is that they earn a fairly poor wage under 18k.

I find that pretty hard to believe. According to the CSO, the average worker in this country is earning about EUR 22 per hour. Even those classed as "manual workers" are earning almost EUR 16 per hour.

daithicarr · 03-10-2010 07:51PM

if thats the average, those atthe top must be earning a hell of a lot because i have never earned near 22 , neither have most of my freinds

A Dub in Glasgo · 03-10-2010 08:35PM

Which is exactly why 'average' is flawed when compared to the median. Do the CSO do median hourly earnings?

djpbarry · 03-10-2010 11:00PM

A Dub in Glasgo wrote: »

Which is exactly why 'average' is flawed when compared to the median. Do the CSO do median hourly earnings?

The most recent data (October 2007) showed that the median income in this country was EUR 16.29 per hour.

greendom · 03-10-2010 11:20PM

Let's not forget VAT. Everyone pays that and as lower income earners spend more of their disposable income it should be included to give a more proportionate view.

sh1tstirrer · 03-10-2010 11:46PM

djpbarry wrote: »

I find that pretty hard to believe. According to the CSO, the average worker in this country is earning about EUR 22 per hour. Even those classed as "manual workers" are earning almost EUR 16 per hour.

The CSO are bluffing I know of plenty workers at the moment earning less than €10/hour.

mrgaa1 · 04-10-2010 11:48AM

http://www.bbc.co.uk/news/uk-politics-11464300 can we follow suit?

onedmc · 04-10-2010 01:32PM

Scofflaw wrote: »

The wealthy aren't only paying 18% - I think you may have read the figure wrong:

The average tax rate for the wealthy is 27.5% on their total earnings, not 18% - the latter figure is the proportion of all income tax paid by the top 0.5% of earners.

Are you actually paying 35.9% on your total earnings? If so, you're probably one of the top-rate taxpayers in the country!

slightly puzzled,
Scofflaw

Ok I understand 27.5 isn't as bad as 18 and Yip thats what it looks like to me. (Takehome/(Gross-Pension))*100=35.9

Half dont pay tax

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