half of all income earners now out of the tax net


#9

It’s been obvious for a while that the next income tax changes would be at the low/middle end. That’s where the biggest hole in revenues are.


#10

This is typical of the boiling frog metaphor

en.wikipedia.org/wiki/Boiling_frog worth a read c.f. decerebrate frogs!

The government abolished rates in the late 70’s. The payment to local councils was supposed to come from central funding (Thats why there is still resistance to water and waste charges as it may represent double taxation).
Income taxes were reduced in the 90’s on the basis that peoples consumption would be taxed and thus the introduction of hidden taxation (higher VAT, etc.). This was supposed to pay for all state expendature. Then the health levy (couldn’t call it a tax, people might get upset) was introduced.

Water and waste charges are being reintroduced, property tax is making a comeback and now the introduction of income tax for the lower payed is being proposed.

That is Fianna Fail government for you giveaway, takeback, take more.
Still its what the people want.
Read about the brainless frog, it will give you some insight into the Irish voter.


#11

I think the OP is using the headline to illustrate that average incomes have plummeted => the amount people can borrow for housing is reduced which could be yet another strangulation factor for the Irish property market. Its not a thread on whether or not Ireland is a low or high tax economy


#12

Quick look at last weeks payroll. 26 Staff paid. Mix of parttime and full time. Gross earnings of é11k, tax paid of é796 euro. Only 11 staff paid tax. 4 members of staff paid é400 euro tax in total, the other 7 paid the rest. These would be full time, and the highest paid (46k per year) paid é146 in tax. Income Levy of é192 was also deducted. So for a gross wage of é10775, the govt took é988.This kind of backs up lennys figures.


#13

VAT is not applicable to everything - basic foods for example are exempt.


#14

Only 10%? This is a lot lower than I would have thought. Going from 21% to 10% is a biggie. I guess a lot of construction jobs were in higher tax band. It’s also reasonable to expect a higher proportion of the higher tax payers are state employees, which infers greater private sector mayhem.


#15

9.1% tax deducted on my last payroll, including levy. Excludes PRSI and Employers PRSI. Employees PRSI was 621 euro and employers was 1123.


#16

VAT in Ireland is close to the median in European terms, so that’s a bit of distraction if you’re trying to compare relative tax levels in Ireland with elsewhere.

PRSI is insurance. Like health insurance, this pays out if you’re unlucky enough to need it.

Ireland’s huge problem is that the median earner pays a tiny amount of their income in tax. I did a quiz about this a couple of months ago to see how much or little people really know about their income tax system:
ronanlyons.com/2009/07/28/a- … ncome-tax/

It’s based on the most recent Revenue Commissioners statistics on income tax. An analysis of the first couple of hundred results is up here:
ronanlyons.com/2009/08/04/tu … tax-hikes/

An entirely different source and method of looking at the same issue came up with the same answer. OECD figures have shown a systematic and growing undertaxing of the average worker here, compared to everywhere else in the OECD.

The Minister’s right, but it’s not a function of the recession, or if it is only in part. It’s a function of his predecessor’s period in office.


#17

I think all you’ve proven there Ronan is that people aren’t able to discern between the various components that make up the difference between Gross and Net pay.

They were probably bang on with the percentage shift but don’t separate PRSI mentally from income tax.

There’s also a question about how you’d treat something like a pension levy for example that is clearly not linked to the outturn of your pension… :laughing:


#18

Would it have killed him to say that instead of the inaccurate thing he actually said? Income tax is not a synonym for tax, because it is, afaik, only a small portion of the funds the state receives.


#19

VAT is probably balanced out by child support for most anyway…
Throw in mortgage interest relief and everything else, and even less people are actually net tax payers at the end of the day…


#20

Indeed, and low income earners are less likely to be buying items that attract VAT.

Now if undertone had complained about excise duty…


#21

I worked up some semi-random numbers from the revenue figures from (I think) 2006:

[code]From To Number % of Income % of Tax % of Average Average % Tax Flat 10% levy
€ € of cases total € ’ m total € ’ m total Income Tax

  •   10,000  463,060   20.48 2,167.60  2.66  2.86      0.02    €4,681       €6   0.13%   €216,760,000
    

10,000 12,000 86,203 3.81 948.3 1.16 2.3 0.02 €11,001 €27 0.24% €94,830,000
12,000 15,000 125,823 5.56 1,699.91 2.09 5.76 0.05 €13,510 €46 0.34% €169,991,000
15,000 17,000 91,943 4.07 1,471.95 1.81 9.73 0.08 €16,009 €106 0.66% €147,195,000
17,000 20,000 140,431 6.21 2,599.64 3.19 54.38 0.45 €18,512 €387 2.09% €259,964,000
20,000 25,000 219,919 9.73 4,941.99 6.06 201.5 1.68 €22,472 €916 4.08% €494,199,000
25,000 27,000 81,588 3.61 2,121.04 2.6 117.29 0.98 €25,997 €1,438 5.53% €212,104,000
27,000 30,000 112,637 4.98 3,207.65 3.93 205.36 1.71 €28,478 €1,823 6.40% €320,765,000
30,000 35,000 164,513 7.28 5,335.01 6.54 415.23 3.47 €32,429 €2,524 7.78% €533,501,000
35,000 40,000 135,277 5.98 5,061.70 6.21 518.43 4.33 €37,417 €3,832 10.24% €506,170,000
40,000 50,000 193,839 8.57 8,652.12 10.61 1,119.51 9.35 €44,636 €5,775 12.94% €865,212,000
50,000 60,000 127,834 5.65 6,991.55 8.58 1,066.73 8.91 €54,692 €8,345 15.26% €699,155,000
60,000 75,000 122,552 5.42 8,184.97 10.04 1,397.97 11.67 €66,788 €11,407 17.08% €818,497,000
75,000 100,000 97,549 4.31 8,351.69 10.25 1,679.62 14.02 €85,615 €17,218 20.11% €835,169,000
100,000 150,000 60,576 2.68 7,198.27 8.83 1,725.80 14.41 €118,830 €28,490 23.98% €719,827,000
150,000 200,000 16,210 0.72 2,771.28 3.4 746.78 6.24 €170,961 €46,069 26.95% €277,128,000
200,000 275,000 9,468 0.42 2,193.72 2.69 611.47 5.11 €231,698 €64,583 27.87% €219,372,000
Over 275,000 11,714 0.52 7,619.60 9.35 2,095.63 17.5 €650,470 €178,900 27.50% €761,960,000
Totals 2,261,136 100 81,517.98 100 11,976.34 100 €36,052 €5,297 14.69% €8,151,798,000[/code]

The last four columns are my additions to the revenue’s figures:
Average income, average tax paid, % of income paid in tax, tax raised by a flat 10% levy on all income.

8.2 bn raised by increasing the effective tax rate by 10%. If you include all SW payments as income, then you get 10.2 bn. But that is using 2006’s earnings and 2009s SW figure…


#22

I am still struggling to get my head around how 50% of Ireland’s total workforce is paying no tax? Looking at the tax bands that means 50% of the workforce earn less than €20,000 per annum (when you take in other tax credits etc)? If they are married with single income then this goes to approx €25k per annum and say €30k pa for 2 incomes. I find it hard to believe that 50% of the population are earning these wages including the PS?


#23

Does income earners include those on the dole or something? That is the only way I can get my head round the 50% figure. I’m glad I’m not the only one who couldn’t really understand that figure!


#24

From the figures I gave above, in 2006, 1,127,379 earned below 25k/year out of 2,261,136 earners. That’s more than half.

And on those tables:


#25

Did he mean no net tax maybe? Counting direct payments like child benefit I could see that…


#26

Only 10% of people can actually afford to buy a Home at current prices, given that the higher rate of tax cuts in at around 35k. Am I wrong :question:
35K * 5 Times Salary = €175K


#27

Married couple with a single income can earn 32k before paying tax. (3660 married credit +1830 PAYE credit + 900 home carers credit)=6390 *5=31,950


#28

There is no excise duty collected on smuggled fags. All the poor people smoke them.
Drink from the north ditto. The local dell boys in the flats and council estates are doing runs up the north and bringing back van loads of booze which is sold to the locals.