Low-paid workers’ exemption from tax base ‘unfair’ on middle earners

[Purple]

What data shows this to be the case?

The last point of the executive summary of this makes that point.
Section 3.3 states;
3.3 THE EFFECT OF THE MINIMUM WAGE CHANGE ON HOUSEHOLD INCOME Figure 3.7 indicates that the 2016 minimum wage increase had little effect on the gross household income distribution, using either measure of income. The minimum wage effect oscillates around zero and is not statistically significant at any point of the annual equivalised gross income distribution. The effect is also close to zero for most of the equivalised monthly gross employment income distribution (ranging from €0 to €5,000 per month) although a small, positive and marginally statistically significant effect is observed at one point (€800 per month).20 Therefore, there is no strong evidence to indicate that the increase in the minimum wage impacted household income. While we observe strong effects when looking at the hourly wage distribution of individual employees, the fact that minimum wage workers are located along the entire household income distribution, and are typically not primary earners within households, means that these effects do not translate into household income. This is in line with some of the recent literature on the relationship between the level of the minimum wage and income inequality (Logue and Callan, 2016; MaCurdy, 2015; Caliendo et al., 2017).

If we want to reduce poverty then have a more graduated reduction in welfare supports. Increasing the minimum wage has little or no impact on poverty.

 

[Leo]

It wouldn’t be that hard to move to Northern Ireland and commute if the tax burden got too high here.

You'd need the employer to facilitate that as there would be implications for them. Covid and remote working has brought that to the fore and most of the large employers who didn't already already have introduced rules stating employees must live within the jurisdiction.

 

[Gordon Gekko]

You'd need the employer to facilitate that as there would be implications for them. Covid and remote working has brought that to the fore and most of the large employers who didn't already already have introduced rules stating employees must live within the jurisdiction.

You would indeed

 

[Allpartied]

This move to move low income out of the tax net was Bertie Ahern's and the trade unions/social partners legacy. Economic simpletons who neither understood socialism or how to build a robust tax system that can fund a Nordic style of socialism.

We now have one of worst outcomes for middle income earners with their taxes close to higher tax EU countries, but it's a fragile income tax system having few of the social benefits those countries can offer, often some type of income linked state pensions, better healthcare, childcare, public transport.

Keeping low income out of the tax net has been the policy in Ireland for over 20 years. To undo it in the current climate of political populism would be very slow - decades of gradual movement - even if any of the political parties showed an interest in doing so. Realistically it won't happen while any of us are still working. One of the biggest financial crashes in modern economic history only temporarily made a dent in it.

The Nordic style socialism does not have a minimum wage. That is because their governments encourage and actively support trade unions. They enforce, by law, the principle of collective bargaining.
This means that they have much higher wages than the rest of Europe.
Their tax systems are not much different, but wages are much higher. So more people pay tax.

 

[Purple]

The Nordic style socialism does not have a minimum wage. That is because their governments encourage and actively support trade unions. They enforce, by law, the principle of collective bargaining.
This means that they have much higher wages than the rest of Europe.
Their tax systems are not much different, but wages are much higher. So more people pay tax.

Yep, the Trade Unions in places like Denmark work closely with employers to ensure that work practices are efficient and businesses profitable so that higher wages can be paid. I agree with high minimum wages. I have a big problem with paying people under 18 a lower wage for doing the same job as someone over 18. I don't like employers who don't pay shift allowances or overtime or higher rates for weekend work. It would be great if we didn't have the "them and us" culture in industrial relations in so much of the Unionised sector but we do. It's hard to say who's to blame, probably everyone, but it's hard to build something like the Danish model in such an environment.

 

[Interest%]

Middle income should get the tax exemption.
My salary is double my partners 30k vs 60k yet i only take home 1000k more per month. So that 30k extra only nets me 12k extra. 18 grand to the taxman.

 

[Interest%]

Jasus, Are you paying a pension levy?
Are you saying that meddle and low income earners should both be on the lower tax band?

6% pension contribution per year of base pay. 60k is the total plus shift. so 6% of base paid into pension.
What is a pension levy?
I'm Saying that for that extra 30k i earn why am i paying 60% of it to the taxman.
Most defiantly middle income earners should have a higher rate of cut off before they pay 40% tax.

 

[Purple]

6% pension contribution per year of base pay. 60k is the total plus shift. so 6% of base paid into pension.
What is a pension levy?
I'm Saying that for that extra 30k i earn why am i paying 60% of it to the taxman.
Most defiantly middle income earners should have a higher rate of cut off before they pay 40% tax.

6% pension contribution is still your money, not the taxman's. That's income you are choosing to save in a private pension.
The marginal rate, including PRSI and USC is around 50% so I don't see how you're 60%.

 

[Interest%]

Sorry forget the pension for the moment.
My calculations were off a touch my bad.

Take a 30k p/a worker pays 4,437 in total tax prsi usc.

60k worker
Total tax = 17,627
First 30k =4,437
Second 30k = 13,190
Pay 8,753 more on the Second 30k.
Id like to see a big increase in the tax rate bands before one has to pay 40% tax.

 

[Itchy]

Sorry forget the pension for the moment.
My calculations were off a touch my bad.

Take a 30k p/a worker pays 4,437 in total tax prsi usc.

60k worker
Total tax = 17,627
First 30k =4,437
Second 30k = 13,190
Pay 8,753 more on the Second 30k.

Sorry but that's just how progressive taxation works. You've compared the "undertaxed" portion of your income and "overtaxed" portion while ignoring the effective rate. If they were equal you would be for a flat tax.

Id like to see a big increase in the tax rate bands before one has to pay 40% tax.

And who would you like to pay for your tax cut? People like your partner and those on lower incomes who are not currently in the tax net as per the OP? Or raise the higher rate? Cut some services perhaps?

 

[Interest%]

Sorry but that's just how progressive taxation works. You've compared the "undertaxed" portion of your income and "overtaxed" portion while ignoring the effective rate. If they were equal you would be for a flat tax.



And who would you like to pay for your tax cut? People like your partner and those on lower incomes who are not currently in the tax net as per the OP? Or raise the higher rate? Cut some services perhaps?

Reduce big fat government salary's and golden handshakes for start.

And if you dont pay tax or have not built up tax credits unless your physically or mentally not able to then there should be no incentive to pay out state welfare. The country is awash with people scamming the system nd the government are only too happy to use tax payers money to fuel it.

 

[Purple]

Reduce big fat government salary's and golden handshakes for start.

We don’t have a big government sector by European standards. There’s an argument that the public sector is too big but the civil service definitely isn’t.

And if you dont pay tax or have not built up tax credits unless your physically or mentally not able to then there should be no incentive to pay out state welfare. The country is awash with people scamming the system nd the government are only too happy to use tax payers money to fuel it.

The rates of welfare we pay are high, particularly for households with low earned income, but there’s not much evidence that we are awash with people scamming the system. Working people are probably just as likely to scam the system and people claiming to be single parents who aren’t and tradespeople doing mixers and teachers doing grinds for cash and doctors and solicitors skimming cash are no different to people claiming welfare that they don’t really qualify for.

 

[Purple]

Sorry but that's just how progressive taxation works. You've compared the "undertaxed" portion of your income and "overtaxed" portion while ignoring the effective rate. If they were equal you would be for a flat tax.

I don’t think anyone is suggesting a flat tax here, rather they are questioning if our system is fair based on how progressive it is. It’s not so long ago that the top rate was 40%, there was no USC and everyone who worked full time paid some income tax. The country functioned just fine.

And who would you like to pay for your tax cut? People like your partner and those on lower incomes who are not currently in the tax net as per the OP?

Yes, that would be fair. As I’ve pointed out most low income earners live in medium to high income households. It is unfair that they are subsidised by people in lower income households.

Cut some services perhaps?

Only a government does that. Organisation who operate in the real world have to satisfy the customer no matter what.

 

[Interest%]

We don’t have a big government sector by European standards. There’s an argument that the public sector is too big but the civil service definitely isn’t.

The rates of welfare we pay are high, particularly for households with low earned income, but there’s not much evidence that we are awash with people scamming the system. Working people are probably just as likely to scam the system and people claiming to be single parents who aren’t and tradespeople doing mixers and teachers doing grinds for cash and doctors and solicitors skimming cash are no different to people claiming welfare that they don’t really qualify for.

Former Taoiseach Brian Cowen -- the man who signed the bank guarantee which lost our economic sovereignty to the IMF -- is now retired at the age of 51 on a pension of over €150,000 a year, for life!

His predecessor Bertie Ahern, who oversaw the boom and bust in our economy, gets even more, at €152,000 a year.
Thats taxpayers money. The people elected to run the country instead ruined it and set them selves up for life. Their the biggest scammers of the system the ones that govern it.
After all who decides what salary and pension they get- its not the taxpayer nor the people who voted..

As far as the social welfare for so called lone parent scammers or a one income household they should be getting help from the welfare system. Unmarried couples cohabiting get notting but yet revenue classes them as single and the state as a couple for means. Notting against a mother or father who is not working getting welfare weather there in a relationship or married or not. Id fully support that.
As regards people doing nixers there not paying tax but there not scamming the welfare system either.

 

[Purple]

Former Taoiseach Brian Cowen -- the man who signed the bank guarantee which lost our economic sovereignty to the IMF -- is now retired at the age of 51 on a pension of over €150,000 a year, for life!

His predecessor Bertie Ahern, who oversaw the boom and bust in our economy, gets even more, at €152,000 a year.

They The dye was cast long before the bank guarantee was signed. I'm very critical of Bertie's populism and the way in which he bought votes with windfall taxes from a credit fuelled property bubble. The pension is big but not by the standards of the heads of most large organisations but it tells us nothing about overall pensions in the State sector.

Thats taxpayers money. The people elected to run the country instead ruined it and set them selves up for life. Their the biggest scammers of the system the ones that govern it.
After all who decides what salary and pension they get- its not the taxpayer nor the people who voted..

The people elect the politicians who make the decisions. That's representative democracy for you.

As far as the social welfare for so called lone parent scammers or a one income household they should be getting help from the welfare system. Unmarried couples cohabiting get notting but yet revenue classes them as single and the state as a couple for means. Notting against a mother or father who is not working getting welfare weather there in a relationship or married or not. Id fully support that.

So a parent who is not working who is cohabiting with someone on a pension of €150,000 a year should get welfare payments? Why?

As regards people doing nixers there not paying tax but there not scamming the welfare system either.

No, they are not paying their taxes which is exactly the same thing. In both cases the State is has less money due to the dishonesty of citizens. One cohort is stealing money on the way into the pot and the other is stealing it on the way out. The outcome is exactly the same. If you are not paying your taxes you've no business complaining about welfare fraud. If you do you're not just a thief, you're a hypocrite.

 

[Peanuts20]

Former Taoiseach Brian Cowen -- the man who signed the bank guarantee which lost our economic sovereignty to the IMF -- is now retired at the age of 51 on a pension of over €150,000 a year, for life!

His predecessor Bertie Ahern, who oversaw the boom and bust in our economy, gets even more, at €152,000 a year.
Thats taxpayers money. The people elected to run the country instead ruined it and set them selves up for life. Their the biggest scammers of the system the ones that govern it.
After all who decides what salary and pension they get- its not the taxpayer nor the people who voted..

As far as the social welfare for so called lone parent scammers or a one income household they should be getting help from the welfare system. Unmarried couples cohabiting get notting but yet revenue classes them as single and the state as a couple for means. Notting against a mother or father who is not working getting welfare weather there in a relationship or married or not. Id fully support that.
As regards people doing nixers there not paying tax but there not scamming the welfare system either.

I'll always respect Bertie for travelling to Belfast straight after his mother's funeral to continue the negotiations for the Good Friday agreement. I'm also part of the generation that emigrated and were able to return home because of that boom, If it hadn't been for that, me and many thousands of Irish people would still be overseas. So as far as I am concerned, cheers Bertie. I know that everyone wont agree with me but tough on that one.

Cowan was out of his depth but how much of the IMF was down to him and how much of it was down to Irish people partying and thinking property prices would keep going in one direction?. Not his fault people decided they had to buy apartments in Cape Verde or Bulgaria. And it's not as if he's enjoying his pension given his health issues.

In terms of cohabiting couples, they are broadly treated the same as married couples for any means tested social welfare payment.

Marital status and social welfare entitlements

Your marital status can affect your eligibility for certain social welfare payments. Find out more.

www.citizensinformation.ie

as for nixers, next time you get paid, look at your tax, your tax would be lower if they paid their taxes

 

[ClubMan]

They The dye was cast long before the bank guarantee was signed.

That's very colourful language for Askaboutmoney...

 

[Brendan Burgess]

Is Ireland a high tax country for workers?

Yes if you have a big income, but those on low incomes do well by international standards

www.irishtimes.com

Yes if you have a big income, but those on low incomes do well by international standards​

 

[Ndiddy]

Is Ireland a high tax country for workers?

Yes if you have a big income, but those on low incomes do well by international standards

www.irishtimes.com

Yes if you have a big income, but those on low incomes do well by international standards​

what counts as low income? moderate income?

 

[Purple]

what counts as low income? moderate income?

Anyone who earns more than you is on a high income.
Anyone who has more than you is rich.
People who have the same as you pay too much tax.
People who earn more than you don't pay enough tax.

I think that's pretty much how it works.