Who pays tax in Ireland and how much?

Saw the above graph (on another forum-credit to Bock) and it got me wondering. Ronan Lyons also covers it in his blog.

Some quotes:

The context it was used in was: “Irish workers need to pay more tax and leave hard-pressed millionaires alone”.
I’ve no doubt that the figures in the blog are correct but suspect that they don’t tell the full story, such as only quoting income tax. Can anyone shed some light on this please?

Agreed;
Anyone use tax avoidance schemes of Late? - I’m guessing in almost everything the money “saved” from tax was spent in Section 23 gaffs that will never return anything.

I recall a few years ago seeing a place with Section 23 allowances go for silly money - allowances fully priced in - this could completely reverse with loaded up investors deleveraging; then those investors with cash and PAYE income might look to these places first if the rules don’t change

What year was he talking about?

On March 5th last year (2009) there was a table contained in the Irish Times with the categories Colm Keenan I think wrote it…My connection to the interweb is GPRS at the moment so everything is Slow…

Perhaps you could google it, I havent seen a similar table this year yet but it would give you a starting point.

I think it came out that almost 50% of all income tax was being paid by 6% of income tax payers.

As you say gaius, this is only income tax. The rich don’t pay PRSI to any great degree for a couple of reasons:

  1. They are not in ‘employment’ as such, so they don’t get ‘pay’ (company directors, for example).
  2. Limits on payments for high-paid PAYE workers.

I’m still waiting to see some blended rates; I suspect what it would do is put the high middle income earner (50k+) at a distinct disadvantage to all other groups.

What do you mean by blended rates? is it tax, at 20% & 41% plus all of the levies, minus allowances?

If so its 18.62% (married) before allowance’s on €50k, we are the lowest, with Germany the highest at 33.07%.

Interestingly Married on €120k Ireland 37.21% and Germany 36…09%.

These were published on the backpage of IT’s Budget supplement 2010, Dec 10, and used PWC’s calculator.

I think you will find “the rich” pay more PRSI than other people. There is no cap on selfemployed prsi and self employed people pay PRSI on all their income not just the income from their trade or profession.

Don’t I know being self-employed…

On the other hand, company directors have some exemptions:
welfare.ie/EN/OperationalGui … emp.aspx#3
Excluded from PRSI

  • Relatives of the self-employed who help out in the running of the business, but who are not business partners.
  • Persons who pay contributions at Class A and whose only self-employed income is unearned income such as interest or rent
  • Persons not ordinarily resident in the State with unearned income.

Also note the quango exemption:

I wonder what the ‘etc.’ covers?

I think, though, that I have some of it backwards. The rich pay as company directors/employees, not as company directors/self-employed so they take advantage of the capped upper limit. No?

download.pwc.com/ie/budget2010/b … _2010.html
Single on 25k
Tax rate 11%

Single on 50k
Tax rate 30%

Single on 100k
Tax rate 39%

Single on 200k
Tax rate 45%

:open_mouth:
That’s some upward skew…

I chose single under 30 as that’s what individualisation is based on. Mind you, as put about above, it doesn’t allow for any gaming of PRSI.

A director who owns more than a certain % of the company is self employed AFAIK

A good thing so many of them have family… or offshore companies owning other bits…

Not that I doubt you, just that if you get to that level of earnings, you can surely avail of perfectly legal measures, hence the top tax ‘earners’ in the country paying 20% effective rate. It can’t all be hotels in Leitrim…

Thankfully the Revenue have thought of that and attribute all of that to the owner.

From this year I don’t think it is possible to reduce your effective tax rate to less than 30% by using any of the reliefs or exemptions-and if anyone knows of a way to do this please share :smiley:

Yes it is, the person on €250k earns 10 times the person on €25k but pays 32.72 times more tax, these are the figures that nobody else will approach… even at €100k that person pays 14.18 times more tax eventhough earning only 4 times as much.

Can you show me which forum that chart came from?