Proposed 30% middle income tax rate (stupid)

[joe sod]

I heard this proposal of a new 30% middle income tax rate is being aired again by government. Currently anyone earning over 36.800 euros goes straight into the higher tax bracket of 40% so this at first glance would be something.

However in the UK and other similar countries you don't enter the higher bracket until earning over 50,000 so why are the government again over complicating the income tax system , we already have the "temporary" USC from the last financial crash which has never been abolished another income tax complication.

If they want to give middle income tax payers a break well then raise the lower taxation threshold to 40,000 this year or abolish some of the USC. That gives middle income tax payers especially the lower paid ones under 40,000 an immediate and bigger relief, it also gives earners upto 50, 000 almost the same relief anyway. So why are the government determined to muddy the waters and again over complicate the tax system?

 

[Early Riser]

"Two sources with knowledge of the paper said its assessment was that one million so-called “tax cases” – the technical term for an individual or jointly-assessed couple used by the Revenue Commissioners – could benefit.
A source said this was equivalent to 35 per cent of the tax cases in Ireland. A spokeswoman for Revenue said the provisional 2022 estimated figure for taxpayer units registered in the State is 2.9 million, comprising both self-assessed and PAYE workers.
They are also expected to look at the benefit of indexing tax bands and credits, with a source indicating that such a step would benefit more taxpayers – perhaps as many as 1.7 million – but that the gains would be spread more thinly."

Irish Times, Saturday 7th

 

[bstop]

So why are the government determined to muddy the waters and again over complicate the tax system?

Because they reckon that most people won't realize that any cost of living pay increase that takes them above 36800 euro will be taxed at a level 10% more than it would have been taxed at if the 20% band was indexed linked. Unfortunately they are probably correct and most people won't spot this stealth tax.

 

[Protocol]

I suggest 20, 30, 40 and 50 tax rates.

With the 50% rate starting at double median or double mean earnings.

 

[joe sod]

Because they reckon that most people won't realize that any cost of living pay increase that takes them above 36800 euro will be taxed at a level 10% more than it would have been taxed at if the 20% band was indexed linked. Unfortunately they are probably correct and most people won't spot this stealth tax.

I think you have it in a nutshell, they have deliberately not moved the lower tax band for some years and then moved it at below the level of inflation thereby bringing more and more people into the upper tax band by stealth. However those people are entering this level more because of inflation and employers needs to pay more wages to compensate for this and hold on to their workforce, yet government still wants to tax this and not give proper tax reliefs.
Ever since Covid there has been an increased tendancy to big government, more spending,more welfare and more taxation , remember that the increase in prices due to inflation is also reaping government bigger VAT receipts yet no no talk of lowering VAT and taking pressure off of prices