New research on the total amount of tax Irish people pay finds that, on average, 24% of gross income is taken by tax - both direct and indirect.
However, it finds that because of indirect taxes such as VAT, the poorest 10% pay a bigger share of their income to the tax authorities than the richest 10%.
In Ireland’s income tax system, the more money you earn, the more tax you pay - on average 23% for the top 10%, 0.3% for the bottom tenth.
However, there are also indirect taxes such as VAT or excise that we pay when we buy things.
Combining direct and indirect taxes produces a different picture.
Research by Dr Micheal Collins of the Nevin Economic Research Institute finds the poorest 10% pay just over 30% of their income in taxes.
This is mostly in the form of indirect taxes levied on the things they spend money on.
Meanwhile, the top 10% spend 29.5% of their income on tax - mostly in the form of direct income tax.
The combined tax burden produces a u-shaped graph, with the bottom and top of the income distribution paying most, and those on lower middle incomes paying least.
Dr Collins, a former member of the commission on taxation, says government should pay more attention to the effects of indirect taxes such as VAT on incomes.
Bit of a non sequitur?From my view the majority of people on Social Welfare would love a reasonable job.
The numbers on the Dole increased from people losing jobs not them
having a wish to go on welfare.
I don’t think I would dismiss this out of hand, simply because it is coming from the Nevin Research Institute.
.
Ironically, the findings work against the very unions that paid for it. Those that pay the most tax don't actually work or earn too much to be members. The middle income demograpic who pay the least are the most likely to be union members. The unions can no longer call for more taxes on the 'rich' now based on their own research.
The top rate of VAT is 23% or 19% of the sales price.Specifically, the research showed the poorest 10 per cent of the population shelled out 16 per cent of their income on VAT while the top 10 per cent of earners paid out just 4 per cent.
According to[broken link removed] 20% of the price of a pint is VAT while 12% is Excise Duty.A similar pattern emerged when it came to the other big indirect tax, excise duty, with the poorer cohort paying 8 per cent of their income on this tariff compared to top earners who pay 1.4 per cent.
Hi Sop
They have form in this area.
They have tried to suggest that Top 10% of households have an effective tax rate between 22.5% and 27.5% .
This post shows the extent of the tricks they use to back up a nonsensical point. But they continue to make the point with a straight face.
Brendan
That said, I think that reports based solely on direct taxes, do not present the full picture.
Regarding your latest post, at a very basic level people also need to buy among things, clothes, personal grooming and household cleaning products, in addition to household furniture and appliances.[/FONT]
That may be so, but it's also well-established that spending on consumption-based taxes such as VAT rises sharply as income rises.
It is established that it rises, but not necessarily as a larger percentage of income!
The Nevin Institute is the propaganda office of the Trade Union movement, nothing more.
They are peddlers of half-truths and misinformation and seek to subvert the truth in order to further a political agenda. It is deeply disturbing that RTE in particular do not challenge or highlight their agenda as they do, for example, when introducing representatives of the Iona Institute who is routinely referred to as a conservative right-wing think tank (which is what it is). Why is the Nevin Institute not introduced on RTE as an ultra-left wing Trade Union lobby group/think tank? They are far freer with the facts that the people from the Iona Institute.
What tax reliefs? Health insurance is a subsidy of the public health system by tax payers. Private pensions amount to the same thing in relation to state funding of the elderly. No private health insurance and no private pensions = a much bigger burden on the state. The "relief" is enjoyed by the state, not the tax payer.If the better off add back their variety tax reliefs , maybe they are not being screwed on income tax after all.
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