ISME to lobby on behalf of self-employed with low income

[delgirl]

Will it fall on deaf ears or will the lobbying by ISME bring about a fairer tax / PRSI rate for the self-employed on low incomes?

[broken link removed] found that a self-employed single person earning €15,500 pays almost six times as much tax and PRSI as an employee on the same income.

Surely this can't be fair and what else can be done apart from lobbying the Department of Finance?

This is also something those thinking of becoming self-employed should consider.

 

[Brendan Burgess]

I am disappointed in PublicPolicy.ie coming up with such a sensationalist comment

Key Point

A self-employed single person on an income of €15,000 pays almost 6 times as much tax and PRSI as an employee on the same income.

People with low income in this country pay very little tax, whether they are employed or self-employed.

A single self-employed person pays €2,349 on an income of €15,000 i.e. 16% of their income. That is too low. As is the 2.6% paid by the single employed person.

 

[T McGibney]

Brendan,

The inequality exists, nonetheless.

It is fact, therefore reporting it is hardly "sensationalist".

 

[delgirl]

A single self-employed person pays €2,349 on an income of €15,000 i.e. 16% of their income. That is too low. As is the 2.6% paid by the single employed person.

€2,349 on an income of €15k is a lot to have to pay and leaves the self-employed person with very little to live on.

If you think it's too low, how much should a person earning €15,000 pay?

Even if you feel that the tax/PRSI on low income earners is too low, the disparity between the self-employed and PAYE workers remains.

 

[Brendan Burgess]

It is fact, therefore reporting it is hardly "sensationalist".

It is a fact quoted completely in isolation from the other facts, so it is sensationalist.

The issue is not that self-employed pay more than the employed. The big issue is that the employed pay so little tax. This is what they should be highlighting.

 

[T McGibney]

It is a fact quoted completely in isolation from the other facts, so it is sensationalist.

The issue is not that self-employed pay more than the employed. The big issue is that the employed pay so little tax. This is what they should be highlighting.

This is because of a conscious commitment on the part of successive governments, and mentioned explicitly in successive Budget speeches, that minimum wage earners should be outside the tax net. However, this commitment has never extended to self-employed low earners and it is hardly sensational to query this.

 

[Brendan Burgess]

Agreed that it is not sensationalist to query it, but it's sensationalist to portray it as

Key Point

A self-employed single person on an income of €15,000 pays almost 6 times as much tax and PRSI as an employee on the same income.

That is not the Key Point

That is a very selective data point in their table. The Key Point is that employed on low income pay too little tax.

 

[dereko1969]

From public policy's point of view it is the key point as it's the point that has made sure the issue is mentioned at all in the media! And here.

In my experience journalists are incredibly lazy, basically re-writing press releases, this release has made it even easier for them by giving them their headline too!

 

[T McGibney]

The Key Point is that employed on low income pay too little tax.

No its not, Brendan. I don't see them arguing that a PAYE employee on €15,000 pa. should pay €2,349 of that princely sum in tax.

 

[Compass]

Are we not supposed to be in what they term a 'progressive' tax system where people on lower incomes are supposed to pay less tax and those on higher, the maximum? In which case, there certainly should be equity between self employed and employed on lower incomes.

I get fed up hearing politicians going on about the wonders of the 'entrepreneurial spirit' and encouraging people who are unemployed to get up off their asses and set up small businesses. Sure it doesn't matter if most fail, some will succeed etc, etc.. Fine rhetoric alright but the degree of risk for the individual in terms of loss is very substantial. I speak as someone self employed for 20+ years and the first thing I learnt is not to over rely on loyalty either from ones clients or the government. You keep a sharp eye out - no one, especially politicians and civil servants give a damn if you go under.

Don't get me wrong - I'm all for getting people up off their asses but becoming self employed is only one rather risky option.

As regards the greater point, I'm inclined to think that everybody should pay some form of 'income' tax, whether one is employed, self employed or relying on welfare payments. All income of whatever type should be assessed and taxed appropriately. To give citizens respect and a sense of participation in running society..