Are income tax rates really too high in Ireland

I think the penny has finally dropped with government about relieving the tax burden on the squeezed middle , simon harris gave a very comprehensive interview on the topic with claire byrne yesterday. He said that the "squeezed middle" that get up for work every morning pay too much tax and need tax breaks and he used those words. He effectively said that pascal donohue not increasing tax bands in budget 26 was a mistake when presssed.

When asked about the new proposed tax free investment accounts being a tax "break for the rich" , he said that ireland was behind its peers like the UK and sweden when it comes to people investing their money and taxes here are too high and an obstacle to that and that needs to change. So it looks like the fuel protests have caused an awakening in government about the annoyance people feel here about paying high taxes especially on workers.
 
joe sod said:
I think the penny has finally dropped with government about relieving the tax burden on the squeezed middle , simon harris gave a very comprehensive interview on the topic with claire byrne yesterday. He said that the "squeezed middle" that get up for work every morning pay too much tax and need tax breaks and he used those words. He effectively said that pascal donohue not increasing tax bands in budget 26 was a mistake when presssed.
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I don't think anyone should pay a marginal tax rate above 50%.
I don't think people getting paid twice the median wage should be paying the same marginal tax rate as someone earning 5 times the median wage.

I also don't like the framing of the term "Squeezed Middle" as if they are the group that is paying for everything and getting nothing back. That is complete nonsense. They are squeezed but it's not because of their tax burden.

joe sod said:
When asked about the new proposed tax free investment accounts being a tax "break for the rich" , he said that ireland was behind its peers like the UK and sweden when it comes to people investing their money and taxes here are too high and an obstacle to that and that needs to change. So it looks like the fuel protests have caused an awakening in government about the annoyance people feel here about paying high taxes especially on workers.
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We don't tax the retention of wealth but we do tax the deployment of wealth. It's not a good model for the efficient use of capital in an economy. In my opinion we should increase the taxes on the retention of wealth and reduce the taxes on returns if wealth is deployed.
 
Purple said:
The top rate now, including PRSI, is 52% on incomes over €44,000
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Purple said:
My mistake, but in real terms (adjusted for inflation) the top marginal rate kicks in at about a quarter of the income that it did in 2009.
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Can you please change your post so as not to mislead people in the future please,
Somebody looking at your post if not corrected may use it is thinking it is correct information,
 
Purple said:
I also don't like the framing of the term "Squeezed Middle" as if they are the group that is paying for everything and getting nothing back. That is complete nonsense. They are squeezed but it's not because of their tax burden.
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I think it is a click bait expression that doesn't mean anything anymore. What is it exactly? Clearly expenses vary during your life and depend also on your expectations. That will affect the way one might feel "squeezed" or not. It seems to me like a one fit all general term.
 
Premos said:
think it is a click bait expression that doesn't mean anything anymore. What is it exactly?
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Thats because you are obviously not one of them so don't recognise it. Its anyone earning 40 to 70K a year, working fulltime and travelling to work everyday not WFH. They are paying the high rate of tax at 44K also USC, fuel taxes and motoring expenses (although some relief on that recently thankfully). Its not someone on 20 to 40K, not someone receiving some welfare payments, not someone working partime, not someone WFH, not someone on state pension or retired.
 
joe sod said:
Thats because you are obviously not one of them so don't recognise it. Its anyone earning 40 to 70K a year, working fulltime and travelling to work everyday not WFH.
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According to whom? Is it as an individual or a couple with 2 earners, or a family or a young 25 years old worker just looking after themselves? All these have a huge influence on your expenses.
I could add renting or having a reasonable mortgage, paying crèche fees or benefiting from cheap childcare... I am working from home, but not my husband and I also pay for my third year student motoring costs because it's cheaper for him to live at home. Does this count?
 
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Premos said:
I think it is a click bait expression that doesn't mean anything anymore. What is it exactly? Clearly expenses vary during your life and depend also on your expectations. That will affect the way one might feel "squeezed" or not. It seems to me like a one fit all general term.
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I don’t think it’s a perfect economic term but it’s not rocket science who it refers to, it’s those who earn too much to qualify for government supports but not enough to have a level of comfort between income and expenditure.

They are the most impacted by cost of living increases particularly rent and house price, we have a lot of supports or services in Ireland that drop off as your earnings increase that may be universal elsewhere. We also have things like health insurance where it becomes a "need" once you are in a position to afford it. It's not mandatory but considered the responsible thing.

Two parents working, cant afford to live close to the city, two cars are probable required.

Depending on individual circumstances recent inflation increases mean many are worse than they were a few years ago.

I actually think the squeezed middle in Ireland is relatively large, these days anyway it feels difficult to escape the middle, you can just be a bit more comfortable middle e.g. fund a pension better but I don't actually see major lifestyle changes by people earning good money, going to a bi name gig with a hotel for the night is the kind of thing that is affordable for upper middle but before prices went mad was affordable for lower middle income.

I don't hear about families who you might think earn high incomes doing fancy holidays or buying say a holiday home these days.
 
faketales said:
I don't hear about families who you might think earn high incomes doing fancy holidays or buying say a holiday home these days.
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Each time I have the chance to get to an airport, it is absolutely buzzing with people. Mostly young people and families.
 
faketales said:
I actually think the squeezed middle in Ireland is relatively large, these days anyway it feels difficult to escape the middle, you can just be a bit more comfortable middle e.g. fund a pension better but I don't actually see major lifestyle changes by people earning good money, going to a bi name gig with a hotel for the night is the kind of thing that is affordable for upper middle but before prices went mad was affordable for lower middle income.

I don't hear about families who you might think earn high incomes doing fancy holidays or buying say a holiday home these days.
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I think that the equation is after tax income -minus Housing costs, childcare costs and travel costs.
There are plenty of couples on modest incomes who inherited a house near where they work/lived previously. They can live quite comfortably.

Then there are couples on much higher incomes who have big mortgages and live far from where they grew up and far from where they work. They have a much lower descressionary income. Worse again are the people/families who rent in the same circumstances. They are the squeezed middle.
 
Premos said:
Each time I have the chance to get to an airport, it is absolutely buzzing with people. Mostly young people and families.
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I travel quite a lot. I'm in Dublin Airport around 20-30 times a year. What I am struck by is the number of older people there. Yes, there are also the younger cohort; working but still living with their parents because the State used their own taxes to prices them out of the housing market.

Then again all that's just anacdotal and doesn't have any actual value in this discussion.
 
faketales said:
major lifestyle changes by people earning good money,
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That's the thing, what's good money. What major lifestyle changes do you want to see?
faketales said:
going to a bi name gig with a hotel for the night is the kind of thing that is affordable for upper middle but before prices went mad was affordable for lower middle income
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What do you consider higher upper class?
I would not consider myself in the higher upper class by a long shot. (I don't recognise myself in the squeezed middle either despite the fact that I never ever took what one could call a fancy holiday as I don't believe that camping in a tent for a couple of weeks with 2 small kids would be considered fancy). But yet, I can easily offer to by tickets for a gig and stay in a hotel if I fancy and choose that as my priority.

faketales said:
before prices went mad was affordable for lower middle income
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Before prices went mad, there was a recession. Then airports and shopping centers were literally empty compared to now. Not sure anyone want to go back to these years. Before this, yes there were a few years of Celtic tiger madness (for some) and before that... I don't believe anyone is that eager to go back to these years either.
I must also say that now in my 50s I can much more easily offer things that I couldn't in my late 30s to mid forties, and things I could only dream of in my 20s. I don't think that this is specific to Ireland or really a new situation.

I do fully recognize that some working people do struggle to actually live with a half decent level of comfort despite their efforts. However, the notion of squeezed middle is used rather extensively.
 
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Premos said:
higher upper class?
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Higher middle I said.

I am probably at the higher end of middle but the cost of tickets and accommodation for a well known artist are definitely a consideration.

More than it would have been for me earning less pre 2020.

Not necessarily governments fault but it contributes to squeezed middle feel.

You could blame them for taking hotels out of system.
 
Purple said:
much higher incomes who have big mortgages and live far from where they grew up and far from where they work
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I absolutely agree. Up to a point depending on the price, location and size of the accommodation chosen.
 
for the most part I get a feeling this is not about the squeezed Middle but the squeezed middle are been used by some who are harboring resentment against ( another section of income tax payers who may be working or retired) to help them escape from their self-imposed prison,
 
Premos said:
What do you consider higher upper class?
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I derive my income from my labour (I work and get paid) so I'm working class.

If you derive your income from your lands and titles you could consider yourself upper class.
If most of your household income comes from social transfers then you are welfare class.
 
galway said:
for the most part I get a feeling this is not about the squeezed Middle but the squeezed middle are been used by some who are harboring resentment against ( another section of income tax payers who may be working or retired) to help them escape from their self-imposed prison,
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Who are in that resentment harboring cohort?
 
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