Being published today, apparently gets 3.5bn in an “adjustment” but in a different way to how the coalition will
Pearse Doherty was on radio this morning. Off the top of my head:
1 Public patients paying for beds in private hospitals at full rate (well their insurance companies). No idea if they factored any elasticity of demand for health insurance. eg I’d sa this would make my VHI prohibitively expensive so rather than an expected saving you’d see an expected loss as I cancelled my VHI cover
2 taking a number of people out of the USC bracket.
3 income above 100k to be subject to an extra 7%. Can’t remember how much this would bring in but I bet they haven’t factored in people upping and leaving.
4 A pay cap of 100k in the public sector apart from consultants, 150k cap to apply here. Not sure you can do this under Croke Park?
Taking 2 & 3 I know several people who’d get up and leave (if I can convince my wife I’m one of them). So someone on 150k is probably factored in as paying an extra 3.5k when in reality some would actually “contribute” approx -60k (of course not saying everyone on 100k+ would leave but there is a non-zero probability of that person upping and leaving which I bet hasn’t been factored in)
Newstalk had a copy but I think it’s on general release later today
You don’t even have to get up and leave.
Many on €100k+ can control their income via company structures etc.
So they have the ability to adjust their salary ‘down’ to €100k and keep the remainder in a tax-efficient manner.
Those with cyclical profits will want to smooth it out but extracting profits ain’t so straightforward. You can’t liquidate a company at capital gains rates willy nilly, moving abroad for 3 years to break ordinary residence will become much more common.
I know several individuals with relatively modest P&L who have foreign incorporated Irish resident structures (companies) who plan/hope to build their retirement/gaff stash and then do the bare minimum abroad. The noteworthy thing is that these people will never be multi millionaires, just moderately high earners who think its worth spending 2-3k a year on fees to avoid already putative rates on the self employed.
My oh comes home with 47% of his gross, now health and pension is deducted also so I’m not sure what the actual tax take is, he earns less than above but 6 figures…so I don’t know where sf’s figures are from
If you count USC and PRSI as income tax by other names (which USC certainly is and PRSI arguably so), that’s about my effective rate on low €40Ks, after pension relief on 10% of it. I think they’re being disingenuous here at best. Even if that 24% is true in the very strictest sense for income tax only, the real rate with USC and PRSI will be around 15% higher.
40 odd % sounds about right.
Obviously I’m biased as I don’t earn over 100k, but what is the issue if people leave because their salaries are capped at 100 or 150k? If they leave, someone else will replace them and so on and so on. Unemployment is reduced and the wage bill decreases.
The 10% for self employed over 100k was introduced in a knee jerk when the changes to USC meant some self employed were no worse off and instead of equalising it they took more from the self employed
You can justify the 3% difference on basis self employed don’t pay employer PRSI but on other hand they don’t have PAYE credit and don’t get same benefits as PAYE
increasing USC by 3% on incomes over 100k only raising 71m shows you that tax increases really need to happen at a lower level to have any meaningful revenue raising benefit. Once you get to marginal rates of over 50% you are into the politics of envy and jealousy where people’s income is being seized because of some policy that they are paid too much