Indo - "Almost one in four Irish earners is paying no income tax, says Revenue"

[Dr Strangelove]

Pensions, rent a room scheme, etc

These are not tax avoidance schemes.

 

[faketales]

Referring to the house worth a million.

How is the owner - say a person in their late forties with kids in school and a job that ties them to Dublin - supposed to monetise that wealth?

I suppose they could sell the €1m house and buy something for say €700k relatively close by if they were stuck for a bit of cash.

 

[Protocol]

A lot of people bought houses in 2004-2008 that are only now (in Dublin) just about worth more than we paid - and we paid 9% stamp duty.

Are you sure about that?

I bought in 2005, and paid zero in stamp duty.

 

[Protocol]

In most places property tax rate is set of what budget is required from it.

If a city needs €1bn from property tax, has 1m residents with an average home value of €100,000 then you set property tax a 1%.

In Ireland, it doesn't work like that.

The main rate of LPT is set by the Central Govt.

It is a local tax, in that the LA can vary the main rate by + / - 15%, so they have rate-setting powers at the margin.



What you describe applies to comm rates. The comm rates tax rate (ARV) is set to ensure that LA income = LA expenditure.

 

[Premos]

paid zero in stamp duty

No stamp duty for second hand house under 317500 if my memory is right.
No stamp duty for new houses under 125 square meters.

 

[Purple]

Are you sure about that?

I bought in 2005, and paid zero in stamp duty.

I bought in the early 2000's and paid 9% Stamp Duty. If there was no Stamp Duty the house would have cost 9% more, at least. There was no net extra outlay. If anything the high level of Stamp Duty depressed the price of the house.

 

[Protocol]

Is this a way to broaden the direct tax base?

Remove the PRSI exemption, but re-introduce the PRSI-free allowance, say at €100 euro per week.

Therefore, earnings between 100 and 352 pw for people earning below 352 per week become part of the PRSI base.


This hardly affects marginal tax rates, so should not affect the supply of labour.

However, it could be seen as a unfair extra tax on low earners.

It could be sold as part of the adjustment of SI benefits to be linked to previous pay, e.g. JSB.

 

[Purple]

However, it could be seen as a unfair extra tax on low earners.

It's also worth noting that most people earning the minimum wage live in medium to high income households.