NERI don't care about being wrong and don't care about challenges.
They're simply trying to get some trade union spin in early for the budget. What the unions are saying is the same as the poster Deiseblue in this tread except not as honestly, don't even think of reducing income tax because they can increase public sector salaries instead. the last thing the peculiar Irish version of socialism wants is to help all workers.
Notably their internet sites don't seem to allow comments. http://www.nerinstitute.net/blog/ https://www.facebook.com/nerinstitute .
The author of the NERI report has done a FAQ on it here:
[broken link removed]
[/FONT]Budget 2010 and the Finance Act 2010 (Department of Finance, 2009 and 2010) altered the High Earnings Restriction …. The restriction is currently structured so that those individuals with an income exceeding €400,000 experience this minimum effective income tax rate and the restriction and its taper commence at €125,000 and where an individual claims more than €80,000 in tax expenditures specified under the measure. The tapering system aims to ensure that high-earners above €125,000 and availing of these tax expenditures pay a minimum effective income tax rate of 30%. The minimum rate does not include liabilities for PRSI and USC which are paid on top of the minimum rate.
The problem with tendentious nonsense like this is that its takes an age to analyse and refute the messages being advanced and the conclusions being reached.
Even the headline message about the lower paid paying a greater proportion of their overall is not even an argument. It is made as an observation that the listener is meant to convert into an argument about the lower paid subsidising the better-off.
Direct taxation - income tax, prsi and USC
..... Some income such as child benefit and maternity benefit is not taxed, so you can argue that the Effective Rate of Income Tax was lower. I am trying to clarify with the Revenue the impact of pension contributions on the calculation of gross income. But let's reduce the 31% income tax to 27%. Now add 11% for USC and PRSI, so the effective rate of tax is 38%.
I am working on a full paper on this.
Another Union rows in behind the Nevin report - Danny McCoy CEO of IBEC has just stated on Prime Time that the Nevin report has made a valid point & our tax system is regressive !
The relevant measure of the impact of state policy on the poor is anyway not the impact of individual policies but the impact of all state policies combined. In particular, we should compare people’s disposable income before state intervention to their disposable income after it. Here the CSO figures are clear. The system is progressive and, as of 2009 and 2010, the bottom seven deciles were net recipients of state funding (i.e. they paid less in tax and social insurance than they received in state transfers). This means that the Irish state is effectively being financed by just its top three income deciles i.e. by households earning more than about €50,000 each year.
It was over 30 years ago that the late John Kelly TD stated in a speech to the Claremorris Chamber of Commerce “since there was always a political party or group willing to take up and amplify any demand, however little justified according to earlier standards, the habit grew of looking to the State or a State agency for everything.” Today there is a broad identity of political interest between Ireland’s public sector, our liberal “knowledge class” (in the media, academia, NGOs and clergy), trade unions and a large underclass dependent upon government.
The trade union-funded Nevin Institute aims to provide this constituency with intellectual ammunition. They all want a growing public sector, extensive welfare and a large but docile government. The answer to any problem is always more government but only seldom greater personal responsibility. The political challenge facing those who would reverse this pattern of institutionalised dependency, auction politics and the dubious pension accounting on which they rely is therefore considerable. But at least the facts may be on their side.
. .....well, you certainly pulled no punches!
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