Those who earn more ,should pay more

Vincent Browne is an loony-left Socialist/Communist so what he says shouldn’t be taken too seriously. His swings to the left/right seem to correspond with his personal financial position.

The reality is that top earners pay far more income tax, proportionately and actually, than those on lower incomes. The top 5% of earners pays almost 50% of the income tax.
 
Using Deloitte's tax calculator with the default settings, I get the following results:

80,000 gross = 49,533 net which is an effective tax rate of 38%
90,000 gross = 54,333 net which is an effective tax rate of 40%
100,000 gross = 59,133 net which is an effective tax rate of 41%


but Vincent argues that the effective tax rate is 33%. Advocating another 7% in tax would bring people in this group a lot closer to an effective tax rate of 50%. The problem with this approach IMO is that whilst in the short term there would be increased income for the government, in the longer term, these measures will dampen the incentive for people to earn more money. What's the point in working overtime when half of what you earn is taken from you? Emigration will start to look more attractive also for higher earners who regardless of the percentage, pay more real money in taxes...better to get a smaller percentage and a larger actual amount than watch these poeple leave and get nothing?
 
I'm not a high earner but I don't buy into this idea that the more you earn, the higher the percentage you should pay. Maybe for the super rich, there could be a similar type tax but I'd rather see one standard rate, for example 15 or 20%.
If everyone paid 20% tax on their income, the higher earners would still be paying more tax.
 
Shawady said:
I'm not a high earner but I don't buy into this idea that the more you earn, the higher the percentage you should pay. Maybe for the super rich, there could be a similar type tax but I'd rather see one standard rate, for example 15 or 20%.
If everyone paid 20% tax on their income, the higher earners would still be paying more tax.
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I agree completely. But politicians need every more funding to feed their ever expanding interference - interference which almost always ends badly. Look at Slovakia for an example of how a country can do well with a flat tax. After all, they are being asked to bail the Greeks, and ourselves, out of the mess we're in.
 
Shawady said:
I'm not a high earner but I don't buy into this idea that the more you earn, the higher the percentage you should pay. Maybe for the super rich, there could be a similar type tax but I'd rather see one standard rate, for example 15 or 20%.
If everyone paid 20% tax on their income, the higher earners would still be paying more tax.
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Agree completely. I don't think it's fair that we are penalised for earnign more. I am of the belief that we should all contribute the same proportion of our earnings, especially as we can all access the same public services. I work damn hard for my salary, and yet it gets eaten away by taxes.
 
As per many previous posts, I've always been a big advocate of the flat rate tax. Shawady's makes a good point that if tax is a flat percentage, higher earners DO pay more.

The other big advantage of the flat rate tax is that it is very easy for the taxpayer to work out their liability and requires a lot less admin by Revenue.

I've formed an impression over the years that there are a lot of vested interests in having a complex hard to understand tax code. Keeps Revenue officials and tax consultants/accountants in jobs. I always found it strange that the people who the Government generally asks to advise on tax are the aforementioned people who have the vested interest in making it complex.
 
It could be that the flatrate tax percentage needed to bring in the same income as present would be a lot higher that the government would like to admit...
 
Firefly said:
It could be that the flatrate tax percentage needed to bring in the same income as present would be a lot higher that the government would like to admit...
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If kept low it will attract high earning workers to this country just like our corporation tax has attracted the multinationals here. We could really become a knowledge economy, instead of just pretending we are.
 
My anecdotal evidence

Couple, recently retired, the table below shows their gross income and tax paid as per P21.

PRSI, levies, USC, not included.

P21 gross Tax due ATR
2003 56,152 11,010 19.61

2004 59,843 12,513 20.91

2005 64309 12,363 19.22

2006 59,336 3825 6.45

2007 56,927 2291 4.02

2008 50,491 1095 2.17

2009 57,552 4893 8.50
 
See above, under 10% effective tax rates on 50-60k earnings can't continue.
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This is for a couple.

Do you think 8.5% effective tax rate (before PRSI, Levies and USC) on a gross income of €28,776 is fair?
 
shnaek said:
If kept low it will attract high earning workers to this country just like our corporation tax has attracted the multinationals here. We could really become a knowledge economy, instead of just pretending we are.
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I totally agree and would be in favour of a flat tax and the lower the better for the reasons you highlight. However, I imagine that if we introduced a flatrate of tax tomorrow to replace our current rates, it would be a lot higher than 10%...
 
Protocol said:
My anecdotal evidence

Couple, recently retired, the table below shows their gross income and tax paid as per P21.

PRSI, levies, USC, not included.

P21 gross Tax due ATR
2003 56,152 11,010 19.61

2004 59,843 12,513 20.91

2005 64309 12,363 19.22

2006 59,336 3825 6.45

2007 56,927 2291 4.02

2008 50,491 1095 2.17

2009 57,552 4893 8.50
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This is not a good example - retired people get additional tax breaks that workers dont.

I'd guess that a PAYE worker with a similar income is paying c.30%
 
csirl said:
I've formed an impression over the years that there are a lot of vested interests in having a complex hard to understand tax code. Keeps Revenue officials and tax consultants/accountants in jobs. I always found it strange that the people who the Government generally asks to advise on tax are the aforementioned people who have the vested interest in making it complex.
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I can't speak for Revenue officials but your conspiracy theory is ludicrous in as much as it applies to accountants and tax consultants.

For a start, accountants and tax consultants don't write the tax code, they merely assist taxpayers on navigating their way through it. It wasn't accountants or tax consultants who introduced the ridiculously complicated Income Levy & USC, or the already arcane Code of Practice for Revenue Audits that was made even more complicated in 2010.

The Government rarely asks any private-sector accountants or tax consultants to advise on tax policy. The recent was chaired by an ex-Revenue boss, and had 17 members, only 5 of whom were accountants or tax advisors. The remainder were economists, academics, civil servants, banking industry :rolleyes: representatives and the usual 'social partner' suspects from SIPTU, IBEC and the IFA. Unsurprisingly, their , if ever implemented, will further complicate the tax system rather than simplify it.

The one flat tax we have in this country, Corporation Tax, has created more work for accountants than any of the more complicated areas of the tax system.
 
T McGibney said:
The one flat tax we have in this country, Corporation Tax, has created more work for accountants than any of the more complicated areas of the tax system.
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If you have a few minutes, it would be great if you could expand on this, to enlighten those of us who aren't directly involved in the area.
 
Complainer said:
If you have a few minutes, it would be great if you could expand on this, to enlighten those of us who aren't directly involved in the area.
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Kind of obvious, I would have thought? The more profitable companies there are in an economy, the more accountants they engage and employ. Someone has to keep an eye on the numbers.
 
T McGibney said:
Kind of obvious, I would have thought? The more profitable companies there are in an economy, the more accountants they engage and employ. Someone has to keep an eye on the numbers.
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OK, so it's a numbers thing, rather than a complexity thing. It's a matter of the numbers of companies paying tax, not any complexity issues about the tax itself.
 
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