"We are the only OECD state where some get back more than they pay in income tax"

[Purple]

They qualify for welfare because their incomes are so low. Wage increases would resolve that, but that is a complete no-no on this site, without productivity increases. But wait a minute, the economy is growing, so wage increases should be on the way?

Why do you think there is a link between a growing economy and a growth in productivity? Someone on €40,000 a year with a stay at home wife or husband who has three kids pays no net income taxes. Do you think that's a low income? Should they be on welfare?

 

[TheBigShort]

Why do you think there is a link between a growing economy and a growth in productivity?

Oh, I dunno...just a hunch I had.

Someone on €40,000 a year with a stay at home wife or husband who has three kids pays no net income taxes. Do you think that's a low income? Should they be on welfare?

1. On an individual basis, no it is not a low income. For a family, assuming, rent and or mortgage to be paid and other associated costs with family life, it is not a high income. Do you think it is a high income?

2. How do you deduce that they pays no taxes?

 

[Purple]

Oh, I dunno...just a hunch I had.

That's alright then

1. On an individual basis, no it is not a low income. For a family, assuming, rent and or mortgage to be paid and other associated costs with family life, it is not a high income. Do you think it is a high income?

No, but it's not a low income either.

2. How do you deduce that they pays no taxes?

Go to any income tax calculator and do the figures and then subtract the children's allowance from the tax paid.

 

[TheBigShort]

Go to any income tax calculator and do the figures and then subtract the children's allowance from the tax paid.

I've used Deloitte. And from the information presented, I'm calculating a net payment of tax of minus €832 a year.
So you have identified a situation where a case could be made to reduce the child benefit. Correct? Perhaps, the reduction would only apply where, as in this case, the family do not have the burden of childcare costs.
So if the CB was reduced by say, half, then in this instance, the familly would be a net contributor, and that would make you, and lots others happier, yes?

 

[Purple]

I've used Deloitte. And from the information presented, I'm calculating a net payment of tax of minus €832 a year.
So you have identified a situation where a case could be made to reduce the child benefit. Correct?

I think an increase in income tax would be more appropriate. What this shows is just how under taxed middle income earners are in Ireland.

Perhaps, the reduction would only apply where, as in this case, the family do not have the burden of childcare costs.

Why?

So if the CB was reduced by say, half, then in this instance, the familly would be a net contributor, and that would make you, and lots others happier, yes?

It's not about making me happy. It is about having a fair taxation system which does not punish hard work and achievement and having an efficient State sector where waste is minimised. Wage levels for individuals in the State sector should not be the issue, rather the overall wage bill. If two people can do what 4 people used to do then split the saving and pay them 50% more each. We talk about what the 100,000 or so people in the HSE get paid. We should be talking about whether we need 100,000 or so people in the HSE.

At the risk of going off on a tangent the issue of the super rich is a difficult topic. The conversation we have in this country is about taxing the hell out of them. The conversation should be about how and why anyone can accumulate billions of Euro in personal wealth. The answer had to do with the shift in production to low cost countries and the massive increase in capital returns which resulted as well as the how the internet has changed the cost of production and distribution of services. It has bugger all to do with deregulation, Thatcher, Reagan or any ideological issue.

 

[TheBigShort]

I think an increase in income tax would be more appropriate. What this shows is just how under taxed middle income earners are in Ireland.

They are only under taxed if they are also in receipt of quality services. But you have derided the quality of public services in this country, the phrase "you get what you pay for", comes to mind.
An increase in tax is fine, provided it is used for enhanced public services.
What do you propose, increasing the rate up from 20%? Or cutting tax credits? Either way the impact will be felt on all earners, including those on higher incomes who you think already pay too much tax.
Secondly, the increased tax take will have to show some discernible improvement in services, for instance like in Sweden, a cap on childcare costs.

 

[Firefly]

We talk about what the 100,000 or so people in the HSE get paid. We should be talking about whether we need 100,000 or so people in the HSE.

You might exclude Mrs. Firefly from that analysis like a good man

 

[Purple]

They are only under taxed if they are also in receipt of quality services. But you have derided the quality of public services in this country, the phrase "you get what you pay for", comes to mind.

We are paying enough at the moment to expect excellent services but due to waste there is a lack of resources in some areas and due to ineptitude and a culture of mediocrity we get bad value for money in many other areas.

An increase in tax is fine, provided it is used for enhanced public services.
What do you propose, increasing the rate up from 20%? Or cutting tax credits? Either way the impact will be felt on all earners, including those on higher incomes who you think already pay too much tax.
Secondly, the increased tax take will have to show some discernible improvement in services, for instance like in Sweden, a cap on childcare costs.

I think everyone should pay some tax. Just go back to the rates we had in the mid 90's when the real economy was booming and the growth was driven by SME and MNC businesses providing internationally traded goods and services.

 

[TheBigShort]

We are paying enough at the moment

No tax increases then?

I think an increase in income tax would be more appropriate. What this shows is just how under taxed middle income earners are in Ireland.

So forgive me for getting somewhat confused, again.
Enough taxes are being collected, but the collection of those taxes are disproportionately skewed to place the burden on high earners?

And you want to redress that imbalance by shifting more of the burden from high earners to low and medium earners?

I am asking, how would you propose to do that?
Bearing in mind, you state we are paying enough taxes already. So any shift in the burden to low and middle income earners will be met with a corresponding decrease in tax on high earners.

 

[Purple]

And you want to redress that imbalance by shifting more of the burden from high earners to low and medium earners?

I am asking, how would you propose to do that?
Bearing in mind, you state we are paying enough taxes already. So any shift in the burden to low and middle income earners will be met with a corresponding decrease in tax on high earners.

Yes, that would be fair. It won't happen but it would be fairer and it would encourage work. At the moment the State takes over half of everything you earn over a moderate enough income. That is unfair.

I paid income tax from the first year of my apprenticeship. It didn't kill me. I don't understand why taking low income earners out of the tax net is a virtue when most of them live in middle income households, have no dependents and are young people with the expectation of higher incomes in the future.
I really don't understand why middle income earners consider themselves squeezes, especially by the government. They contribute nothing in income tax and in many cases are net recipients, receiving money which was taken from the same high earners they accuse of not paying their fair share in tax!

I know people who could expand their businesses but don't bother as the return just isn't worth the hassle (extra work, extra hours, less time with family etc) when over half of everything extra they earn will be taken from them. Why would they bother?

If you have 4 kids you would have to earn the equivalent of nearly €50,000 a year to end up with what you get on welfare, assuming that you have a council house and a few kids in college. Why work 50 or 60 hours a week to earn €120,000 and end up with a take home of €75,000 with all the sacrifices of family time and all the stress?

Do you think the current taxes on earnings are fair? Do you think high earners are over or under taxed? Ditto for low and middle income earners. Fairness always has to be a guiding principle when it comes to taxation. Needs and political expedience have caused fairness to be forgotten about.

 

[Firefly]

I know people who could expand their businesses but don't bother as the return just isn't worth the hassle (extra work, extra hours, less time with family etc) when over half of everything extra they earn will be taken from them. Why would they bother?

I am firmly in this bracket. I am often asked to work on weekends for clients here and in the UK but unless they are stuck I don't bother...it's just not worth it.

 

[jjm]

Job for someone else firefly if you are turning down work because of high tax on high earners.So high tax on high earners creates more jobs unless you work harder when you are at work because of high tax.Less time to keep an eye on TheBigShort.

 

[TheBigShort]

Yes, that would be fair. It won't happen but it would be fairer and it would encourage work. At the moment the State takes over half of everything you earn over a moderate enough income. That is unfair.

There is no point in answering by what you think should be done until you explain how it will be done.
I have no issue with increasing the tax burden on lower earners, if it results in an increase in public services. I do take issue with the notion of transferring the burden from higher earners on to lower earners for the perceived notion that that would somehow be fair.
For example, comparing our €40,000 one income, three kids family to say an €120,000 in same situation. It transpires that they take out of the tax system in child benefit the exact same amount. It also transpires that on the same income levels, they contribute the exact same amount of tax.
Now you don't agree with this system, that is fine. But you need to explain how your alternative system would working in practical terms. I've already pointed out that even if you were to cut CB in half the lower earner makes a net contribution. But equally, the higher earner is also contributing more. The overall comparative change would be so miniscule as to make the whole discussion pointless.

I don't understand why taking low income earners out of the tax net is a virtue

It is not. It is only because of the lack of quality services and the cost of living in this country that it is pursued. Reduce the cost of living, pay fair wages, provide adequate public services and taxing low earners would be justified.

I really don't understand why middle income earners consider themselves squeezes, especially by the governmIent. They contribute nothing in income tax and in many cases are net recipients, receiving money which was taken from the same high earners they accuse of not paying their fair share in tax!

To say they contribute nothing in tax is bogus. Using your example of the €40,000 earner with 3 kids, his contribution was €404 a week. He was a net recipient to the tune of €16 a week by virtue of having 3 kids. 2, 1 or 0 kids and he is a net contributor. And I would hazard a guess that the great majority of single earning €40,000 income families will have 2 or less kids.

Why work 50 or 60 hours a week to earn €120,000 and end up with a take home of €75,000 with all the sacrifices of family time and all the stress?

Why do automatically assume that someone on €120,000 must be making the sacrifices of family time and enduring all the stress? A hotel porter on €30,000 a year, a nurse, a garda, a security guard, lorry driver, chefs, waiters, earn a lot less, work unsocial hours and can work in very stressful environments let alone the stress of meeting the bills.

Do you think the current taxes on earnings are fair?

No, I think they should be increased in return for better public services in education, healthcare, housing etc.

Do you think high earners are over or under taxed?

Undertaxed.

Ditto for low and middle income earners.

Undertaxed.

Fairness always has to be a guiding principle when it comes to taxation. Needs and political expedience have caused fairness to be forgotten about.

Yes, but your perception of fairness is to reduce the take home pay of low earners in order to increase the take home pay of high earners.
Mine is to increase taxes in order to provide better public services.

 

[Firefly]

Job for someone else firefly if you are turning down work because of high tax on high earners.So high tax on high earners creates more jobs unless you work harder when you are at work because of high tax.

A lot of the time weekend work is specifically asked for. As I work in IT it tends to be a quiet time for a lot of organisations. Often the work is not done at all or rolled into a project of some sort.

Less time to keep an eye on TheBigShort.

That's funny alright. I have far better things to do with my time I can assure you. I'm just naturally drawn to idiotic ideologies. You should look for posts by Complainer and RainyDay on this site and SerialComplaint and RainyDay over on boards.ie. Different people I believe but worrying all the same!

 

[TheBigShort]

I'm just naturally drawn to idiotic ideologies.

Couldn't agree more.

 

[jjm]

Or drawn to conjecture

 

[Purple]

Job for someone else firefly if you are turning down work because of high tax on high earners.So high tax on high earners creates more jobs unless you work harder when you are at work because of high tax.Less time to keep an eye on TheBigShort.

That shows a fundamental lack of understand about how business works in reality. If Firefly doesn't do the work then someone in a different country may do it or his customer may just not get the work done.

 

[Purple]

Mine is to increase taxes in order to provide better public services.

Why do you think increasing taxes will result in better public services? Since the vast majority of our spend on public services goes on wages the most likely outcome will just be higher wages for the same level of services. That's what happened during the boom; a more than 50% increase in average Public Sector wages, along with a massive increase in the number of people employed in the Public Sector, but no substantive increase in the level or quality of services provided. Why do you think there would be a different outcome this time?

 

[Purple]

I'm just naturally drawn to idiotic ideologies.

Lol

 

[Firefly]

Why do you think increasing taxes will result in better public services? Since the vast majority of our spend on public services goes on wages the most likely outcome will just be higher wages for the same level of services. That's what happened during the boom; a more than 50% increase in average Public Sector wages, along with a massive increase in the number of people employed in the Public Sector, but no substantive increase in the level or quality of services provided.

I have to agree with this. Take the situation with A&E. Things were so bad in 2006 that in 2007 the HSE Produced "Emergency Departments Task Force Report" containing measures to address the situation of over-crowding in A&E departments...this at a time when the country was awash with money! We have more nurses per head than France and Canada. Why the drive to recruit more? Irish teachers, nurses and doctors among best paid in OECD (http://www.independent.ie/business/...-report-ignores-earnings-abroad-35712027.html).

Paying higher wages is not the answer..