Almost one in four Irish earners is paying no income tax, says Revenue
Almost four out of 10 Irish earners will pay no income tax this year, according to estimates from the Revenue Commissioners’ forecasting model.
The CSO even runs courses for media outlets on how to report statistics.Headline: Almost one in four Irish earners is paying no income tax.
First line: Almost four out of 10 Irish earners will pay no income tax this year.
Not defending it, but part of the explanation for errors like this is that the article and the headline are written by two different people. And the headline is written by someone who isn't a journalist, is often acting under enormous time pressure, and often hasn't read the article.I think journalism selects for the very small overlap in the Venn diagrams of people who are very good with words and very bad with numbers.
I take your point. But you're going to have to finance income tax cuts somehow; what other tax would you expand? And the EC report itself makes the point that Ireland's property taxes are unusually low, so expanding them is an obvious thing to do if you want to make a more balanced tax system and avoid excessive concentration of the tax base.I don't get the logic of hiking property taxes in a scenario where landlords are
- already paying more than their share of income tax, with no possible avoidance avenues.
- deserting the market in droves, partly because of the tax burden.
Presumably a couple who are jointly assessed are a taxpayer unit despite both being taxpayers.The report is a bit confusing, for the reason pointed out by Tom. Also, there's much mention of "taxpayer units". Is that the same thing as taxpayers? If so, why not just say "taxpayers"? If not, then what does it mean?
That possiblity occurred to me. But another possiblity that occurred to me is that a "taxpayer unit" is somebody with potentially taxable income who pays no tax because their credits or exemptions mean they have a nil liability.Presumably a couple who are jointly assessed are a taxpayer unit despite both being taxpayers.
There is no point in cutting one tax and imposing another, especially when the same people will by and large be shouldering both.I take your point. But you're going to have to finance income tax cuts somehow; what other tax would you expand?
Depends on what you're trying to do.There is no point in cutting one tax and imposing another, especially when the same people will by and large be shouldering both.
Politically very problematic, Elon. I think the alternative of increasing borrowing might be more palatable to an Irish electorate.I'd instead cut public expenditure, mercilessly.
if your objective is to rebalance the tax system, to make it more resilient, less concentrated on a narrow tax base, then this could make perfect sense.
when the same people will by and large be shouldering both.
Shoving the cost of current largesse onto the shoulders of unborn generations is always electorally palatable. But long-term it's a recipe for messy outcomes.I think the alternative of increasing borrowing might be more palatable to an Irish electorate.
That is no guarantee that politicians won't take the option, or that voters won't require them to.Shoving the cost of current largesse onto the shoulders of unborn generations is always electorally palatable. But long-term it's a recipe for messy outcomes.
Paying tax wouldn't push me out of the market.landlords are
....
- deserting the market in droves
The problem in Ireland is the historically and currently linear relationship between incomes and prosperity generally, and property values.
- If people pay 100% of their tax as income tax and 0% as property tax, tax revenue will vary signficantly with changes in employment and in rates of pay increase, but won't vary at all with changes in property values or in levels of activity in the property markets.
- If they pay 0% as income tax but 100% as property taxes, then the other way around — tax revenue aren't affected at all by what happens in employment markets, but are hugely affected by what happens in property markets.
- But if its 50% each, then the revenue effects of what happens in each market are halved and overall, tax revenues will be more stable. The more diverse tax base delivers greater stability.
Famously, that's not a stable relationship — residential property values, at least, have increased at a much faster rate than earnings (which a lot of people would say is the fundamental reason for the housing crisis we are now experiencing).The problem in Ireland is the historically and currently linear relationship between incomes and prosperity generally, and property values.
Revenue themselves seem confused about the term.A married couple is one taxpayer unit.
But elsewhere (see attached) they say:In the case of jointly assessed and separately assessed couples, these couple are classified as one taxpayer unit.
So, in one case they say a couple that are jointly or separately assessed, but in another only if they're jointly assessed...Data are on a ‘tax unit’ basis. A taxpayer unit is either an individual with any personal status who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.
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