Tax institute warns of shrinking tax base

lightspeed · 22-09-2015 2:53pm #1

http://www.rte.ie/news/2015/0922/729432-budget/

The Irish Tax Institute, the professional body for tax advisors, says three quarters of a million income earners will not be liable for income tax after the next budget, raising questions about the size of the tax base.

It also says Ireland has a higher effective tax rate for foreign executives than Sweden and the Netherlands.

With the budget approaching, there have been widespread reports of cuts in Universal Social Charge rates and other changes to the personal income tax regime.

However, the ITI has noted that of the 2.4 million income earners, 663,600 pay no income tax or USC.
417,000 people have been taken out of the tax net since 2012, and the Government plans to take another 90,000 out in the next budget.

The institute says that will mean 31% of the total workforce will be out of the income tax system.

"You're paying €25,000 more tax in fact, than the same person would pay on a salary of €150,000 in the USA, which is €2,000 in tax extra every month, and €12,000 more than that same person would pay in the UK."

The above is quite worrying and remarkable. The current government is under pressure to reduce income tax for low earners as that is what the other parties highlight as an issue along with rising rents.

Increasing taxes on the wealthy is the only proposition or tag line that sinn fein and other parties are willing to admit they will pursue if they get into government.

Sinn fein have promised state funded childcare, more spending in health and education, reduction in USC for low earners, no water charges and oppose the property tax also. Does this mean that the gap between higher earners here and in other countries would expand considerably more under Sinn fein or other socialist parties?

Sheep Lover · 22-09-2015 2:54pm

Solution?

Raise taxes! Tax more things! Tax everything

Ruu · 22-09-2015 2:55pm

There is a tax for starting a thread. *hand out*

Akrasia · 22-09-2015 3:04pm

lightspeed wrote: »

"You're paying €25,000 more tax in fact, than the same person would pay on a salary of €150,000 in the USA, which is €2,000 in tax extra every month, and €12,000 more than that same person would pay in the UK."

The above is quite worrying and remarkable. The current government is under pressure to reduce income tax for low earners as that is what the other parties highlight as an issue along with rising rents.

I am so so so sorry for those poor hard pressed people who earn 150k per year.
How do they survive on such a meagre pittance?

Maybe we should do a canned goods drive, donate some spaghetti hoops to keep them alive until their next payday...

22-09-2015 3:44pm

Narrowing of the tax base was one of the causes of our national deficit crisis. Depressing that lessons haven't been learned. Unfortunately there's little alternative, can't imagine Sinn Fein raising taxes on the lowest earners.

Barely There · 22-09-2015 3:53pm

Everyone should pay income tax.

Every single political party in this country seems to try to out-do each other with how many people they claim they'll remove from the tax net.

It's complete auction-politics bollox and feeds into the 'can't someone else pay for it' mentality so beloved by many of the scrotes here.

lightspeed · 22-09-2015 3:54pm

Akrasia wrote: »

I am so so so sorry for those poor hard pressed people who earn 150k per year.
How do they survive on such a meagre pittance?

Maybe we should do a canned goods drive, donate some spaghetti hoops to keep them alive until their next payday...

The question isn't whether such people deserve sympathy but how long can you tap the higher earners on the basis they don't pay enough tax whilst being able to ignore the fact that they pay more here than many other countries?

Im frustrated with all the magic beans being sold by all the other parties. How will sinn fein have state funded childcare? how will we invest more in education and healthcare and pay all the rest by just taxing those on over €100000 or even €150000?

http://www.citizensinformationboard.ie/publications/relate/relate_2014_03.pdf

"At the end of 2003, there were 1,152,908 holders of medical cards (about
29% of the population); this had risen to 1,849,380 (about
40% of the population) on 1 January 2014. It is expected that
an additional 60,000 cards will be granted in 2014."

Given that people are living longer, that means higher medical and pension costs now and in the future.

What is the breaking point in the current strategy? Will we get to the point where high earners pay €60,000 more here than elsewhere cause noone wants to pay more taxes and any cuts to social welfare is considered akin to drowning a new born puppy?

zl1whqvjs75cdy · 22-09-2015 3:58pm

For a country that looks to direct a lot of FDI, and the high salaries that go with it, we really do like to screw the employees of these companies don't we? Its going to start becoming a disincentive for companies to locate here.

the evasion_kid · 22-09-2015 4:10pm

Sure arent the government going to fight the case were apple owe them tax to the tune of 19bn.....great little country to do business in

jamesbere · 22-09-2015 4:24pm

They should bring an optional pension, if you want to keep working you should be allowed too. My mother was a carer and was forced to give it up because of her age even though she's well able to do her job.

As an above poster pointed out people are living longer and some are well able to work into there 70s.

ceadaoin. · 22-09-2015 4:32pm

Akrasia wrote: »

I am so so so sorry for those poor hard pressed people who earn 150k per year.
How do they survive on such a meagre pittance?

Maybe we should do a canned goods drive, donate some spaghetti hoops to keep them alive until their next payday...

So just because they aren't on the breadline they should hand over half their income? Why not go after the actual rich people? Millionaires and such and corporations who pay comparatively little tax. If you make it so that it isn't worth earning a higher salary in Ireland, eventually these people will leave the country. If the system is relying disproportionately on that section of taxpayers then everyone will suffer.

Everyone should pay tax, even if it's just a nominal amount for low earners. I don't think it's feasible that almost a third of workers would be contributing nothing.

lightspeed · 22-09-2015 4:33pm

the evasion_kid wrote: »

Sure arent the government going to fight the case were apple owe them tax to the tune of 19bn.....great little country to do business in

True, even though the closing of the double irish loophole for corporations was long overdue, it will obviously have a larger effect in coming years if companies have to pay senior executives more to compensate for large tax increases on such higher earners.

I think there is an ethical argument to be made against increasing taxes on higher earnings just so we can maintain current welfare rates and welfare culture.

If one person earns a high income, should that be used a license that enititles someone else to a decent stardard of living on welfare? I don't think so.

TerrorFirmer · 22-09-2015 5:31pm

Akrasia wrote: »

I am so so so sorry for those poor hard pressed people who earn 150k per year.
How do they survive on such a meagre pittance?

Maybe we should do a canned goods drive, donate some spaghetti hoops to keep them alive until their next payday...

That's just mindless rabble.

Why should those who've worked hard to earn more be burdened continuously until they decide to leave the country altogether?

I'm not a high earner but I never understood the notion that all of our problems can magically be solved if we keep hitting those who already pay the overwhelming majority of tax.

Tax institute warns of shrinking tax base

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