Income Distribution & Tax Take


Maybe it’s not sustainable to increase tax on the poor.

No one is really “outside the tax net” when VAT is considered.


VAT is not a tax on Income, you don’t pay any if you don’t spend. Arguments like this are used by the union think tanks (NERI / Nevin Institute) to show how people who have no income other than SW pay proportionately more ‘tax’ than high earners and use it to justify even higher income taxes.

Increasing tax on the poor isn’t fair, but how you define ‘poor’ is the issue here, a part time workers in a two income household might pay next to nothing in PAYE but are in many cases far from poor. USC was a solution to this, sort of.


It’s a secondary Tax on income in real world terms, I’ve a vague notion without doing a search that it was born out of “luxury taxes” thinking… but most importantly, it is effected in the most cynical and insidious of ways in tax farms such as Ireland.

In a fiat (magic) money system there should be no taxes wouldn’t you agree? :whistle:


In Irelands case, a larger proportion of the income of SW recipients doesn’t attract VAT like basic foodstuffs, childrens clothes so it’s not as simple as that when looking at income distribution here


Has anyone done a study of the total tax take from households at different levels of income?

A high percentage of Irish households are dependent on government payments. How much does the government claw back? Could inequality be reduced by increasing earned income in such households?

Much simpler to tax the “rich”. Who cares if the economy shrinks, so long as we reduce inequality?


Got any backup for the assertion that taxing the rich shrinks the economy? All I’ve read suggests taxing savers (the rich) and redistributing to spenders (the poor) increases velocity and so expands the economy.


I’m talking about the “rich” , those who earn so much that they pay the top rate of income tax :woozy_face:

The Irish state has never been able to collect serious tax from our wealthiest citizens so calls for higher taxes are always aimed at the middle classes.

Here’s an OECD study on growth and taxes


To simplify, taxes on earned income distort the economy and tend to hinder growth. On the other hand

Taxes on residential property are likely to be best for growth.

Advice Ireland will never take.


I think many SW recipients and Nevin Institiute researchers would classify me as ‘rich’ but I nor my peers would. I drive a 9 year old car and live in a 3 bed semi with half the mortgage paid off. Taxing me more will just change who it is spends my money - that I earned.


Okay, yeah, I get the “rich” quotation marks now. Sorry for not picking that up earlier.

Yes, I agree, taxing what’s effectively the middle is unhelpful, given current tax rates in Ireland. That’s not necessarily true everywhere, but in Ireland we have their weird humpty system.

I think there’s a way to go in Ireland still on reducing the use and benefit of tax shelters. And with the gig economy, the Revenue and Social need to make sure that what are really employees (rather than casual labour) are taxed as and get the benefits of employment.

There’s plenty of scope for increasing fairness without touching tax rates.



Summary from that link:

"Thus we can conclude that, relative to the other OECD countries, the latest OECD data indicate that Ireland has below average tax rates on below average wages, average tax rates on average wages and above average tax rates on above average wages. "


Confirms that our marginal income tax rates are among the highest in the world (but with lousy public services) but, thanks to our demographics, we have v. low social security charges so that’s a relief while it lasts.

Hard to believe that Seamus Coffey, a first-rate economist, shares the UCC campus with a complete spoofer like Buffachi. At least, only Coffey is taken seriously by the government but pity the philosophy students of UCC.


We pay low PRSI and no property taxes so that’s the plus. The massive minus is that we pay huge waste charges to tax dodging companies and if you don’t have a Medical card you virtually have to pay for private health insurance so you might as well include that in the tax - I’d rather pay my VHI as tax and have a proper health system instead of contributing to the profits of a poorly functioning private health care system with massive overheads and profiteering.
As has been pointed out - we have no wealth tax, no functional corporate tax regime and an almost infinite supply of tax dodging loopholes that large corporates and anyone earning over 200k can afford to avail of. There is no attempt to close these loopholes while huge amounts are spent chasing Social Welfare dodgers at a much lower rate of return (and I’m not saying that should stop - I’m saying that the rate of return on , for example , having a higher burden of proof on people who say they are non-domiciled in Ireland, would be much higher as the taxes evaded are much higher than the Social Welfare benefits received).
All of the ‘Socialist’ parties have set their face against Property Taxes in principle and have therefore closed off the simplest, and least evadable, wealth tax available to us - while these idiots might disagree with the Property Tax is implemented - that can be changed by intelligent legislation. They’ve just painted themselves into a corner and the rich are laughing at them.


For me it took 7 years and two promotions to get back to the net pay I was on in 2008


I’ve been hearing this for years and I’ve still to find out what it means. I earned well over 200k for many years, and paid pretty much 50% of it in tax each and every month. The only tax reduction of any sort I ever got was for charitable donations which cost me a lot more than they cost the taxman, and benefited neither of us. Where is the infinite supply of tax dodging loopholes? At one stage I was paying more tax just on deposit interest than most of the country were paying out of their wages. Don’t get me wrong – I was in an incredibly privileged position. But I was paying as much tax as dozens of “average” earners and never found, nor used, any loopholes.


I intend moving to Newry next year.
When depends upon Brexit.

Personal allowance Up to £11,850 0%
Basic rate £11,851 to £46,350 20%
Higher rate £46,351 to £150,000 40%
Additional rate Over £150,000 45%

Dividend tax rates

The tax-free dividend allowance is £2,000
Basic-rate taxpayers pay 7.5% on dividends
Higher-rate taxpayers pay 32.5% on dividends
Additional-rate taxpayers pay 38.1% on dividends.

My understanding is the dividend tax rate is after you pay corporation tax of 19% (18% next year).
So the 7.5% is presently 26.5% in total.


I negotiated a higher increase to my salary during an internal promotion earlier this year, with the only real basis being the marginal rate of tax in Ireland - normally this IMO falls on deaf ears but I couldn’t pass the opportunity to illustrate it. In this case the hiring manager was in the US and the HR contact was in the UK where the respective rates are 24% and 40%. I suspect the HR contact would be subject to the lower 20% rate and I think it took everything they had not to gasp when I explained how much I would pay in tax on the increase proposed.


Your employer was penalised for trying to pay you fairly. That’s what our tax system does and no one is talking about it, except the people who experience it.


The ole tax wedge.
Highly prevalent in the 1980’s.
Making a comeback today.