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 Post subject: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 10:34 pm 
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I just worked out my effective tax rate (includes USC/PRSI/unavoidable Levies etc) for 2012

(Gross-Net)/Gross

It is 56.6% !!!! I mean WTF?

This rate of tax is just simply unfair and a disincentive to work. I sometimes get offered extra work at the weekends. There is no F**king way I am taking on any extra work if this is the rate I will be paying. I'll take the kids to the pool.

Tax at this rate will drive evasion and elaborate avoidance schemes.

We are on the wrong side of the Laffer curve: http://en.wikipedia.org/wiki/Laffer_curve

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 10:44 pm 
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Planning Tribunal Attendee

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One way to reduce effective rate is to stick some in a pension.

Choose a low cost option and don't pay for the middleman to get more bang for you're buck

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 10:47 pm 
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Can I ask how you work this out (obviously without going into specifics that you are uncomfortable with)? Is it because of the pension levy?

I mean, the highest marginal rate is for self employed high earning over 100k and that marginal rate is 55% (that's 41% higher rate, 4% prsi and 10% USC). If that is the highest marginal rate, I don't see how it can the effective rate be higher?


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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 10:51 pm 
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Neo Landlord

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Posts: 253
Terra Incognita wrote:
This rate of tax is just simply unfair and a disincentive to work. I sometimes get offered extra work at the weekends. There is no F**king way I am taking on any extra work if this is the rate I will be paying. I'll take the kids to the pool.
I came to this conclusion years ago and dropped out of the formal economy. Theres no way Im giving 50% or 60% of what I earn to the public sector parasites.


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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 10:59 pm 
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johnnyskeleton wrote:
Can I ask how you work this out (obviously without going into specifics that you are uncomfortable with)? Is it because of the pension levy?

I mean, the highest marginal rate is for self employed high earning over 100k and that marginal rate is 55% (that's 41% higher rate, 4% prsi and 10% USC). If that is the highest marginal rate, I don't see how it can the effective rate be higher?


I'd prefer to keep this thread clean and avoid a slagging match about rates of pay etc, I'd rather keep it focused on Unavoidable Taxes levies charges etc and their impact on work.

Yes, It includes the Pension Levy which also precludes me from contributing to a private pension due to the 70% exit tax on the date of retirement on the total sum saved in any private pension, so I'm not able to contribute to a private pension to reduce my tax bill.

My main point is that I often get offered extra work in my spare time, weekends etc. I used to jump at every chance, but if in 2013 I'll be paying 56.6% tax while working on a Sunday away from my family I simply wont be taking on extra work if this is the rate I'll be paying.

I'd rather feed the ducks in the park with the kids

Edit: Its not about me, I'm sure that Im not the only one looking at their 2012 P60 coming to the same conclusions

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Last edited by Terra Incognita on Mon Jan 28, 2013 11:07 pm, edited 1 time in total.

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:03 pm 
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Terra Incognita wrote:

I'd rather feed the ducks in the park with the kids


Do ducks eat children? Even if they do, aren't there laws against that kind of thing?

Most people feed ducks with bread. :?

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Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
Book I, Chapter X, Part II,


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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:05 pm 
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Madness of Crowds wrote:
Terra Incognita wrote:

I'd rather feed the ducks in the park with the kids


Do ducks eat children? Even if they do, aren't there laws against that kind of thing?

Most people feed ducks with bread. :?


Times are tough :cry:

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:06 pm 
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Of Systemic Importance

Joined: Sep 13, 2012
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When the government spends 40-50% of GDP and collects taxes progressively , it is inevitable that those on higher incomes will have very high marginal rates of tax.

Cut spending, raise taxes, take your pick.

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:07 pm 
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Eschatologist wrote:
When the government spends 40-50% of GDP and collects taxes progressively , it is inevitable that those on higher incomes will have very high marginal rates of tax.

Cut spending, raise taxes, take your pick.


Nah, try the American way, cut taxes, raise spending, can't go wrong, can you? :wink:

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People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.


Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
Book I, Chapter X, Part II,


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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:11 pm 
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Eschatologist wrote:
When the government spends 40-50% of GDP and collects taxes progressively , it is inevitable that those on higher incomes will have very high marginal rates of tax.

Cut spending, raise taxes, take your pick.


You're absolutely right, but those on higher incomes will start to reduce their income, like I will in 2013. I simply refuse to (legally) pay rates this high.

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:14 pm 
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Terra Incognita wrote:
You're absolutely right, but those on higher incomes will start to reduce their income, like I will in 2013. I simply refuse to (legally) pay rates this high.


You're complaining about the quality of the music on the deck of the Titanic.

I'd be more worried about your employer being in administration.

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:22 pm 
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Eschatologist wrote:
Terra Incognita wrote:
You're absolutely right, but those on higher incomes will start to reduce their income, like I will in 2013. I simply refuse to (legally) pay rates this high.


You're complaining about the quality of the music on the deck of the Titanic.

I'd be more worried about your employer being in administration.


Its not about me, but higher earners will reduce or defer their income to avoid rates like this. I'd like to hear from someone more learned than me on the wider economic implications of this.

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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:26 pm 
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Old Time Landlord

Joined: May 17, 2012
Posts: 366
Couple of points I think that it is good that you are turning down work because this creates opportunities for others.
Secondly my marginal tax rate is around 23%. To a large degree I agree with LL, if you want to keep what you earn then you need to earn you money in the real economy.


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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:29 pm 
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 Post subject: Re: Income Tax is too high !
PostPosted: Mon Jan 28, 2013 11:45 pm 
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:lol: :lol:


And now for something completely different.


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