Ireland has had very high PAYE tax rates for modest salaries since the 1970's. So this is old news.We have the highest gap in the OECD between our average and marginal income tax wedge.
Anecdotally I know a high number of skilled people who choose to work part time rather than fulltime.
With a marginal tax rate of over 50% and high childcare costs the net return for a parent working a full day rather than a half day is very small.
Does that contribute to the shortages we see in Medicine, Nursing, Speech Therapists etc?
A GP working morning only will earn €80-€100k a year. If they work a full day they'll earn an extra €80-€100k a year but will net €40-€50k a year. If they have 2 children their childcare costs will be around €20k a year. Why would they bother working full time?
I’m the 70’s only one parent worked. The economy was much smaller and the government was smaller again. It’s a totally different scenario now.Ireland has had very high PAYE tax rates for modest salaries since the 1970's. So this is old news.
The achoolWho will mind the children in the morning?
We have the highest gap in the OECD between our average and marginal income tax wedge.
I read an OECD report on skills development and the return to the tax payer. It gave a chart and some data there. I'll try to find it.Have you ever seen comparative data on the size of this gap?
We'd be back in the late 80s again with 3 bands , but I agree and my preference would be 15% first 20k, 30% to 70k and 45% above, I ran these figures years ago 14,13? and it didn't really change the overall take, but USC wasn't in the equation, and Prsi maximum at about €70k was also in those figures.The mooted 30% middle rate seems to have been put on ice
I thought it was a great idea. It's just disheartening that anything you earn over a relatively low amount is taxed at almost 50%.
With inflation playing a big part this year, it would be a time to introduce such a rate for a band of about 6k gradually increasing over 5 years so that you need to earn 55k+ for high rate.
A gp has to run their office out of that money too - definitely a disincentive my business students are shocked that their teachers only get 0.40c out of every €1 once the pension leavy is added in at the higher tax rate - SEC can’t get staff to superintend or correct exams because of it also and contributes to being unable afford Life in Dublin too - conditions may also be a factor but definitely part of the reason there is a huge shortage in Dublin and many gone to Dubai etcWe have the highest gap in the OECD between our average and marginal income tax wedge.
Anecdotally I know a high number of skilled people who choose to work part time rather than fulltime.
With a marginal tax rate of over 50% and high childcare costs the net return for a parent working a full day rather than a half day is very small.
Does that contribute to the shortages we see in Medicine, Nursing, Speech Therapists etc?
A GP working morning only will earn €80-€100k a year. If they work a full day they'll earn an extra €80-€100k a year but will net €40-€50k a year. If they have 2 children their childcare costs will be around €20k a year. Why would they bother working full time?
Imagine their shock when they realise you're on €275,000 a year, the income level at which you actually start to lose 0.50c out of every €1 (before pension levy)my business students are shocked that their teachers only get 0.40c out of every €1 once the pension leavy is added in at the higher tax rate
Would tax reductions not have the effect of accelerating inflation even further? Or is the proposal to increase the higher rate, so tax take is either neutral or higher but low-mid income households are sheltered somewhat?With inflation playing a big part this year, it would be a time to introduce such a rate for a band of about 6k gradually increasing over 5 years so that you need to earn 55k+ for high rate.
Find me the teacher who is paid €275,000 we’re far from Robert watt - you wouldnt have a recruitment crisis thenImagine their shock when they realise you're on €275,000 a year, the income level at which you actually start to lose 0.50c out of every €1 (before pension levy)
It was tongue in cheek sorry. I was just making the point that people often say ‘I lose half my salary to the government’ when they don’t, a single person needs to be on €275k+ before they’re actually paying an effective tax rate of 50%. On €38k a year you’re paying 18c out of every €1 in tax.Find me the teacher who is paid €275,000 we’re far from Robert watt - you wouldnt have a recruitment crisis then
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