Cut the dole to cut higher tax rates

Just looking at the Revenue statistics for 2014 ...

The highest effective rate was 42.54% - paid buy a group of 320 single females in the 275,000+ income category followed by:

42.10% - 825 single males - 275,000+
41.34% - 3,476 married couples or civil partners - one earning - 275,000+
41.21% - 449 single females - 200,000 to 275,000
40.41% - 94 widowers - 275,000+
40.29% - 741 single males - 200,000 to 275,000
39.73% - 5,635 married couples or civil partners - both earning - 275,000+
39.44% - 840 single females - 150,000 to 200,000
39.01% - 98 widows - 275,000+
38.24% - 2828 married couples or civil partners - one earning - 200,000 to 275,000.

I'm not sure that these rates are excessive or would act as a disincentive.
 
Sophrosyne said:
Just looking at the Revenue statistics for 2014 ...

The highest effective rate was 42.54% - paid buy a group of 320 single females in the 275,000+ income category followed by:

42.10% - 825 single males - 275,000+
41.34% - 3,476 married couples or civil partners - one earning - 275,000+
41.21% - 449 single females - 200,000 to 275,000
40.41% - 94 widowers - 275,000+
40.29% - 741 single males - 200,000 to 275,000
39.73% - 5,635 married couples or civil partners - both earning - 275,000+
39.44% - 840 single females - 150,000 to 200,000
39.01% - 98 widows - 275,000+
38.24% - 2828 married couples or civil partners - one earning - 200,000 to 275,000.

I'm not sure that these rates are excessive or would act as a disincentive.
Click to expand...

The effective rate is not the issue. The issue is the marginal rate. “If I work harder and earn more how much of my extra income will I end up with”. That’s the issue.
The effective tax rate on people earning over €150,000 a year is around 40%. In the UK it is around 33%.
 
That doesn’t change their effective rate of tax for a year.

As you can see from my previous post, in 2014, very few people (5,905 or 0.27% of taxpayers) had an effective rate greater than 40%.

Comparisons with the UK or any other country, which are confined solely to income tax, are hardly informative.
 
Last edited:
Sophrosyne said:
That doesn’t change their effective rate of tax for a year.

As you can see from my previous post, in 2014, very few people (5,585 or 2.45% of taxpayers) had an effective rate greater than 40%.

Comparisons with the UK or any other country, which are confined solely to income tax, are hardly informative.
Click to expand...
There are a few other threads doing other comparisons.
 
"Cut the dole to cut higher tax rates" ....

The cost of living needs to be addressed, before you go cutting the dole imho. Basic costs relating to food, shelter, heath and cloting need to be addressed to ensure that when the dole might be cut in the future, that it doesn't result in a lot more people living on the street.

The above said, it would be appropriate to regularly review those collecting the dole to ensure they are genuine, can prove they are trying to get a job or improve their skills so as to get a job in the future etc. I must admit, I've little faith in the current system and beleive it goes no where near far enough, when it comes to monitoring those who are collecting the dole.
 
MrEarl said:
"Cut the dole to cut higher tax rates" ....

The cost of living needs to be addressed, before you go cutting the dole imho. Basic costs relating to food, shelter, heath and cloting need to be addressed to ensure that when the dole might be cut in the future, that it doesn't result in a lot more people living on the street.
Click to expand...
Labour is the biggest input when calculating the costs of the things you listed. The cost of living is a reflection of wages, not the other way around. The only way to really reduce the cost of living is to improve productivity in every area of the economy, both private and public.
 
Purple said:
Labour is the biggest input when calculating the costs of the things you listed. The cost of living is a reflection of wages, not the other way around. The only way to really reduce the cost of living is to improve productivity in every area of the economy, both private and public.
Click to expand...

Sure, I take your point (although don't agree that the cost of living is always a reflection of wages - i.e. rents / homeloans), but we are only talking about possibly cutting the dole here, not all earnings for all groups of earners... so we need to provide for those with the lowest incomes.

Good luck trying to improve productivity in the public service btw ... if we are not prepared to put Michael O'Leary (or similar) in control, things will never change in the public service.
 
German system
  • Unemployment Insurance paid for 12 months, typically
  • Paid at 60-67% of former pay [former net I think]
  • after 12 months, you move onto means-tested social assistance, known as Hartz IV
  • Hartz IV rates as follows:
    • single = 404 pm = 93 per week
    • couple = 364 pm each
    • children = 237 / 270 / 306 pm
 
Protocol said:
German system
  • Unemployment Insurance paid for 12 months, typically
  • Paid at 60-67% of former pay [former net I think]
  • after 12 months, you move onto means-tested social assistance, known as Hartz IV
  • Hartz IV rates as follows:
    • single = 404 pm = 93 per week
    • couple = 364 pm each
    • children = 237 / 270 / 306 pm
Click to expand...
= less taxes = more take home pay = lower wages = lower cost of living.
 
Protocol said:
German system
  • Unemployment Insurance paid for 12 months, typically
  • Paid at 60-67% of former pay [former net I think]
  • after 12 months, you move onto means-tested social assistance, known as Hartz IV
  • Hartz IV rates as follows:
    • single = 404 pm = 93 per week
    • couple = 364 pm each
    • children = 237 / 270 / 306 pm
Click to expand...

If I earned €1,000 pw and lost my job would I receive €600 a week for six months? Sounds expensive. At €180 a week for 52 weeks that is under €10,000, the German model would pay me €15,000+ by the sixth month.
Also Im confused about the 'means tested' social assistance program. My take on 'means tested' is that the social assistance is not pre-determined, but you have listed some fixed amounts.
Is it possible that those figures are the minimum amount of assistance available? And that depending on circumstances, further assistance payments would be payable?
 
TheBigShort said:
If I earned €1,000 pw and lost my job would I receive €600 a week for six months? Sounds expensive.
Click to expand...
It's insurance (as most countries outside of Ireland know it...) - higher income means higher contributions means higher benefits when needed. Sounds fair to me. If you were used to 1,000 pw and had expenses to match, a sudden drop to 200 a week would put you in dire straits immediately - the insurance benefits give you 6/12 months breathing room - to get another job or at least try to rearrange your affairs - rent somewhere cheaper for example.
TheBigShort said:
Also Im confused about the 'means tested' social assistance program. My take on 'means tested' is that the social assistance is not pre-determined, but you have listed some fixed amounts.
Click to expand...
Not sure why it's confusing - it's the same as our JSA means-testing concept. After your period on pay-related benefits (JSB here), your eligibility for future benefits is dependent on you not having sufficient means to support yourself - so if you have savings/ spouse has income etc. then you are not eligible. There is also the possibility of assistance with housing and healthcare - but those rates are the maximum rates.
 
Way back here in Ireland , if you were made unemployed you got a fair % of your previous wages out of your PRSI .
Seemed eminently fairer and sensible and stopped the newly unemployed dropping too much income too quickly.
It also eased the (risk) of working v those who wouldn,t work, who got little nuff dole.

In a similar vein I find it a bit unfair on OLd age pensions , those who paid prsi for years get little more than a non contributor ?

Go figure ?
 
German UI system pays 60-67% of previous net pay, not previous gross.
I had to check that.
It last for 12 months for most people. If over 50, it can last 18-24 months.

Note that net pay is much less than gross in Germany, as tax and PRSI are higher than here. PRSI = 20% over there.

A 50k gross is maybe 30k net, meaning 18k UI payment - that's rough figure by me, not facts.





German SA system is known as Hartz IV - equivalent to our JSA "dole".

Pays 404 pm + housing benefit + health insurance
 
TheBigShort said:
Also Im confused about the 'means tested' social assistance program. My take on 'means tested' is that the social assistance is not pre-determined, but you have listed some fixed amounts.
Is it possible that those figures are the minimum amount of assistance available? And that depending on circumstances, further assistance payments would be payable?
Click to expand...


Subsistence allowance (Arbeitslosengeld II)

This allowance is lower than ordinary unemployment benefit and is payable when the claimant cannot receive full benefit or their period of benefit has come to an end, but they are still fit to work and registered as unemployed. Whether or not a person can claim for Arbeitslosengeld IIwill depend on savings, spouse's earnings and life insurance. A set amount is paid for those requiring social assistance (€404 per month). Claimants must attend training courses, and be ready to step into any job offered them by the Arbeitsamt, even a very low paid one. Exceptions to this rule are sometimes allowed on mental, physical or psychological grounds or in cases where pay rates are deemed immorally low.

Exactly how much social assistance an individual receives depends on several factors, such as number and age of children as well as marital status.

While receiving benefits, reports must be made regularly to the job centre. The centre may make contact at any time requesting proof of job searching activities (applications and responses from different companies). Anyone claiming unemployment benefit must not be absent from their usual place of residence for longer than three weeks in each year. These holidays must be agreed in advance with the unemployment office agent.
 
TheBigShort said:
Also Im confused about the 'means tested' social assistance program. My take on 'means tested' is that the social assistance is not pre-determined, but you have listed some fixed amounts.
Is it possible that those figures are the minimum amount of assistance available? And that depending on circumstances, further assistance payments would be payable?
Click to expand...

Yes, for children, also for lone parents, etc.
 
Unemployment Benefit II (Arbeitslosengeld II) / Social Benefit (Sozialgeld)
l6019022dstbai365805.jpg

All persons capable of work and eligible for benefits can receive unemployment benefit II (Alg II) from the age of 15 years until the legally stipulated age limit between 65 and 67 years. Persons not capable of work can receive social benefit. Alg II and social benefit are benefits to secure a livelihood. Legislation determined to what each individual is entitled to in the so-called "normal requirement" (Regelbedarf).

Normal requirement
The normal requirement globally covers the costs of food, clothing, household energy (without heating and warm watergeneration), personal hygiene, household effects, needs of everyday life, as well as to a reasonable extent also relations to theenvironment and participation in cultural life.

Singles, single parents, as well as adults with a minor partner are entitled to the full amount of normal requirement. Since 1January 2016, this is EUR 404 for all of Germany. The normal requirement for adult partners is EUR 364. Children younger than 6years receive EUR 237. Between 6 and including 13 years of age this is EUR 270. Children and young persons between 14 and 17 years receive EUR 306. For young adults from 15years on and below 25 years who live with their parents or who moved without the positive assertion of the municipal authority, this is EUR 324.

Young adults who are 25 years and older must file their own application for (Alg II), regardless of the fact whether they live in their own flat or with their parents. Persons living in their ownhousehold form a separate benefit community (BG) if they are at least 15 years old.

Social benefit
Persons not capable of work but in need of assistance receive social benefit, if a least one person capable of work but in need of assistance lives in their benefit community.

Accommodation and heating
The costs of accommodation and heating are, if they are reasonable, borne to the amount of the actual expenses.

If you own a house or a flat, the costs of accommodation include the costs connected with it, however, not the amortization payment for credits.

Persons below 25 years who want to move out of their parents' home only receive a refund of the costs of accommodation and heating, if the municipal authority agreed to the move. This agreement can be obtained from the contact persons responsible for your benefits. Agreement needs to be obtained if

  • the persons concerned cannot live with their parents for "severe social reasons",
  • the move is necessary for the integration in the labour market or
  • another severe reason exists.
Non-recurring benefits
Beyond the normal requirement you can receive non-recurring benefits as credit, cash or non-cash benefit for

  • initial equipment of the flat including household devices,
  • initial equipment for clothing (also for pregnancy and birth) and
  • the acquisition and repair of medical devices and renting of therapeutical devices.
 
Gerry Canning said:
Way back here in Ireland , if you were made unemployed you got a fair % of your previous wages out of your PRSI .
Seemed eminently fairer and sensible and stopped the newly unemployed dropping too much income too quickly.
It also eased the (risk) of working v those who wouldn,t work, who got little nuff dole.

In a similar vein I find it a bit unfair on OLd age pensions , those who paid prsi for years get little more than a non contributor ?

Go figure ?
Click to expand...

Yes, the pay-related aspect of JSB was abolished, wrongly, in my opinion.

Also, it's crazy that in return for 40 years work, tax, PRSI, you get 11 euro a week more than a non-con pension.
 
You must log in or register to reply here.
Back
Top