Over 1 million tax payers now paying tax at the higher rate

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joe sod

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www.independent.ie

Over one million workers pay top rate of PAYE, not just the high earners

At least 1.1 million people – representing a majority of Ireland’s full-time workers – are hit with the highest, 40pc rate of PAYE, new figures from Revenue show.
www.independent.ie www.independent.ie

The thrust of the media debates in ireland seems to be on spending and welfare increases across the board and not enough attention is being paid to the fact that middle income tax payers in Ireland are paying alot more tax than is fair and compared to our international peers. The fact that the government has not raised the tax bands in line with inflation since the financial crash has meant that more and more workers are now brought into the higher income tax band and this is now over 50% of tax payers. This is extraordinary and unfair and is resulting in people questioning why they are going to work every day when then they are targetted by the green taxes on fuel etc.
The balance has swung too far in Ireland with regard to taxes welfare spending and high spending every where else and not enough attention is being paid to the workers who are keeping this whole system going and are fed up with paying for everything. Whats more extraordinary is that no political party seems to want to represent this electorate the traditional bedrock of society
 
joe sod said:
middle income tax payers in Ireland are paying alot more tax than is fair and compared to our international peers.
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Are you sure of this?

I don't disagree with the general thrust of your argument. But the last time I looked, high earners in Ireland paid about the same level of tax on their earnings as other comparable countries. But the lower and middle earners paid a lot less.

I doubt it has changed. We are still a low tax country.

Brendan
 
Thanks ClubMan

So Ireland is bang in the middle for single people and families pay 20.8% compared to 25.6%

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joe sod said:
www.independent.ie

Over one million workers pay top rate of PAYE, not just the high earners

At least 1.1 million people – representing a majority of Ireland’s full-time workers – are hit with the highest, 40pc rate of PAYE, new figures from Revenue show.
www.independent.ie www.independent.ie

The thrust of the media debates in ireland seems to be on spending and welfare increases across the board and not enough attention is being paid to the fact that middle income tax payers in Ireland are paying alot more tax than is fair and compared to our international peers.
Click to expand...

There are discussions ad nauseam in the media on: taxation of middle-income earners, reducing/scrapping USC, raising the threshold for the marginal rate, etc. FG are constantly banging the drum.

joe sod said:
The fact that the government has not raised the tax bands in line with inflation since the financial crash has meant that more and more workers are now brought into the higher income tax band and this is now over 50% of tax payers. This is extraordinary and unfair and is resulting in people questioning why they are going to work every day when then they are targetted by the green taxes on fuel etc.
Click to expand...

No-one is being "targetted by the green taxes". At the core of fiscal (and indeed social) conservatism are the ideas that you pay your own way and clean up the messes you make.

joe sod said:
The balance has swung too far in Ireland with regard to taxes welfare spending and high spending every where else and not enough attention is being paid to the workers who are keeping this whole system going and are fed up with paying for everything. Whats more extraordinary is that no political party seems to want to represent this electorate the traditional bedrock of society
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If you actually look at who is paying for what and who is a net recipient from the state, you may find that the only people who can complain are childless single people earning €100k+
 
The effective direct tax rates in Ireland are not high.

Indeed, as pointed out above, low earners face direct tax rates below typical European norms.

Where Ireland stands out is the very low entry point to the 48.5% marginal income tax rate.

To be paying nearly 50% MTR on extra earnings below median earnings is very unusual.

50% MTR are common, but are usually reached at 3x or 4x or 5x median earnings.

The solution is more income tax rates.
 
A good discussion of it here

Are income tax rates really too high in Ireland

I see several posters here and in other threads claiming "income tax is too high in Ireland". Is that really the case? This research seems to suggest that this may not be the case. https://publicpolicy.ie/papers/comparing-irish-income-taxation-rates-with-other-eu-member-states/
www.askaboutmoney.com
 
Protocol said:
Where Ireland stands out is the very low entry point to the 48.5% marginal income tax rate.

To be paying nearly 50% MTR on extra earnings below median earnings is very unusual.
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Exactly thats the main point that people are hitting the high tax bracket on earnings below the median salary in Ireland. In the UK only 15% of tax payers are paying tax at the higher rate, here it is 50% that statistic alone is extraordinary. There is no alternative now but to raise the higher tax bracket to at least 43K this year to take it above the median salary and then another 3K in 2025 to 46K to at least bring Ireland back in line with its european compatriiots..
Its not just the taxation that is extraordinary but the very high welfare rates which means it is difficult to get people to work in the lower paid jobs this means that Irelands productivity is reduced ( multinational productivity aside as this is seperate to what is happening in the domestic economy), therefore people that should be working producing services and reducing the overall price levels in the country are living off of government transfers. This means that the working population are paying higher taxes and higher prices than they otherwise would be.
 
joe sod said:
Its not just the taxation that is extraordinary but the very high welfare rates which means it is difficult to get people to work in the lower paid jobs ...
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Is there evidence to support this? All I've seen recently is how we're at record employment rates with unemployment close to record lows.

joe sod said:
In the UK only 15% of tax payers are paying tax at the higher rate, here it is 50% that statistic alone is extraordinary.
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Apart from being out nearest neighbour is there a good reason to aspire to the UK taxation model? The Truss mini budget will be held up for many years as shinning example of what not to do.

joe sod said:
Irelands productivity is reduced ( multinational productivity aside as this is seperate to what is happening in the domestic economy),
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While you're right that the multinational sector skews the numbers Ireland is still above the EU average. While there was a decline I wouldn't overstate it.

www.irishtimes.com

Irish workforce among most productive in the world, CSO report finds

Multinationals skew figures higher, Productivity in Ireland report indicates, as workers here add €102 of value per hour of work on average in 2021
www.irishtimes.com www.irishtimes.com

joe sod said:
There is no alternative now but to raise the higher tax bracket to at least 43K this year to take it above the median salary and then another 3K in 2025 to 46K to at least bring Ireland back in line with its european compatriiots..
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While I would love a few extra euros in my pocket I also appreciate that given the economy is roaring along a string of tax reductions will likely only add to/fuel inflation and ultimately undermine competitiveness.
 
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skrooge said:
While I would love a few extra euros in my pocket I also appreciate that given the economy is roaring along a string of tax reductions will likely only add to/fuel inflation and ultimately undermine competitivenes
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the government wasn't too worried about inflation when they brought in MUP and returned the fuel duties along with VAT and carbon taxes. The fact is that the tax bands should have been increased long ago it is now effectively a legacy issue that needs to be rectified immediately. It is a disincentive to work and is reducing productivity as workers dont want to do extra work because it is too heavily taxed
 
skrooge said:
Apart from being out nearest neighbour is there a good reason to aspire to the UK taxation model? The Truss mini budget will be held up for many years as shinning example of what not to do.
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The main problem with the Kwarteng mini-budget was not its tax cuts at a time when the UK public finances were lurching into crisis (a problem not faced right now by Minister McGrath) but a whole array of unfinanced spending increases.
 
T McGibney said:
The main problem with the Kwarteng mini-budget was not its tax cuts at a time when the UK public finances were lurching into crisis (a problem not faced right now by Minister McGrath) but a whole array of unfinanced spending increases.
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Every analysis piece (FT, BBC, Guardian, Independent, The Times, etc.) said it was indeed the proposal of unfunded tax cuts of over £45bn that made the markets balk.
 
arbitron said:
Every analysis piece (FT, BBC, Guardian, Independent, The Times, etc.) said it was indeed the proposal of unfunded tax cuts of over £45bn that made the markets balk.
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That may be so, but Truss' proposal for the government to underwrite frozen energy prices, at an estimated cost of £100 billion annually, on its own easily exceeded the cost of the proposed tax cuts. And that doesn't count a number of other spending increases promised in the mini-budget.
 
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