Is there up to date information on the per cent of income taxes paid by those earning over €70,000?

[T McGibney]

Charging more income tax on lower earners might be possible here, if the price level fell.

Our labour costs are similar to Germany, yet our prices are 20% higher.

Our prices will never match Germany's as our consumer market lacks the economies of scale that Germany enjoys.

 

[TheBigShort]

According to the Irish Tax Institute, the top 9% of income earners pay 54% of all income tax and USC.

[broken link removed]

Some other interesting details from that publication

How does Ireland rank internationally?
• Ireland has one of the most progressive income tax systems in the OECD
• EU progressivity Average 120-140: Ireland is 183
• The entry point to Ireland’s 52% marginal rate is one of the lowest in the OECD
• Taxpayers earning €75,000 pay more personal taxes than people in Sweden,
(incl. social security)

I was always under the impression that if we wanted Scandinavian style public services, such as free childcare, smaller classroom sizes etc, that we would have to pay Scandinavian type taxes.
But according to the above our system is one of the most progressive, and we pay more than Sweden up to or above (its not clear) €75,000.

I dont really buy into the 9% pay 54% etc as such stats (a % of %) are always open to manipulation and misinterpretation.
Implied in the stat is that somehow the top 9% must be overly burdened with tax liability relative to the other 91%. But this would be nonsense as another stat says the bottom 76% pay only 21%, meaning that the top 24% pay 79% between them.
So any given income tax payer can at once be, part of the bottom 91% contributing only 46% of the tax and simultaneously part of the top 24% carrying their share of the heavy burden of 79% of the tax.
Similarly a taxpayer in the top 9% burdened with 54% of the tax can also be part of the bottom 99% that only contribute 81% between them.
So the stats in themselves do not have any real meaning.

 

[TheBigShort]

Thanks Sarenco - that's great

I have also found this published by Revenue for 2017

View attachment 1587

This is somewhat misleading information from revenue, as the income thresholds stop at €275,000. While some 16,000+ earn above that amount we can only deduce that each individual earns on average €550,000 for tax purposes. This will not include any income that may be diverted into tax avoidance schemes that would ordinarily only be available to the wealthy.
Nevertheless, one of the shocking stats is that it takes nearly the income of one million workers (from the bottom) to equate to the income of the top 16,000+.
Another revenue document I saw (for 2015, I doubt much has changed) was some 300 odd individuals earning €2m+ each.

 

[Purple]

But according to the above our system is one of the most progressive, and we pay more than Sweden up to or above (its not clear) €75,000.

It's above €75,000. It is clear. Look at the charts on pages 30 and 31. The low paid are very under taxed; someone on €18,000 in Ireland pays €705 a year in income taxes. Someone on €18,000 in Sweden pays €3,201 a year in income taxes. They pay 450% more income tax in Sweden.

 

[Purple]

Nevertheless, one of the shocking stats is that it takes nearly the income of one million workers (from the bottom) to equate to the income of the top 16,000+.

The good news is that the State takes 52% of what those 1600+ people earn and give it to the one million earners (I presume you mean earners and not workers as many people who work are unpaid; parents etc.).

Another revenue document I saw (for 2015, I doubt much has changed) was some 300 odd individuals earning €2m+ each.

We should thank them for choosing to live in a country where they are hit with such high taxes and where they are vilified by our left wing media for having the audacity to be successful.

 

[odyssey06]

So next time someone says we don't pay enough tax to get Swedish level public services, we should force them to admit that they mean the low paid (and possibly super earners)?
It seems as if the squeezed middle is paying Swedish level taxes?

And if the super earners are the goose that lays the golden egg, contributing such a disproportionate share of total taxes, we would have to be careful about anything that spooks them out of the country, or into working less billable hours?
Similarly, there must be a risk that higher taxes on the low paid pushes them into welfare dependency, so care would be needed there too.

 

[Protocol]

• Taxpayers earning €75,000 pay more personal taxes than people in Sweden,
(incl. social security)

This is hard to believe, so I will check it.


OECD data, 2015, see here:

[broken link removed]

single person at 167% of average wages, which means 60k here


Irl = 28.24%

Sweden = 30.89%


Note that this refers to "average income tax rate", so that may exclude PRSI.

I will search more.

 

[Protocol]

OECD data 2015

[broken link removed]

Income tax and ee SSC [PRSI]

167% of average wages, so 60k here

Ireland = 32.24% - this is exactly 4% higher than above, so this suggests PRSI excluded above

Sweden = 35.55%

 

[Purple]

OECD data 2015

[broken link removed]

Income tax and ee SSC [PRSI]

167% of average wages, so 60k here

Ireland = 32.24% - this is exactly 4% higher than above, so this suggests PRSI excluded above

Sweden = 35.55%

That's not €75,000 though.

 

[ashambles]

The tax institute 75k Irish figure is for 2015 not 2016 - that doc was published last year. This year's Irish tax on a 75k earner would be 26481.

I did some checking on Swedish tax, my calcs would have a 75k earner paying 31k in tax and PRSI.

Anyone want to check my figures or better have direct or up to date experience?
https://en.wikipedia.org/wiki/Taxation_in_Sweden (used 2014 figures)

SW PRSI 7% capped @ 54700 - tax deductible
Tax band 1 31% between 2444(or 0?) - 56407
Tax band 2 51% between 56407 - 80000
Tax band 3 56% higher than 80000

75k would mean 3829 in PRSI, 16728 in the first tax band and 7529 in the second tax band.

I think across the complete income range the combined income+prsi is higher than here, however as you move upwards our income taxes move from being hugely less than Sweden to being just a small bit less. Their flat 56% top rate that corresponds to a top rate for Ireland of either 52% or 55% (self-employed).

Of course we get nothing like what the Swedes get in return, and are likely to be paying more in health insurance and private pensions.

 

[Purple]

Of course we get nothing like what the Swedes get in return, and are likely to be paying more in health insurance and private pensions.

This is a very good point; private health insurance is a direct subsidy by tax payers of the public system. We pay for services through taxation which are so bad that we are willing to pay for them again out of after tax income. This lessens the burden on the public system and reduces their costs.

 

[orka]

This is the tax institute's report for this year which has a lot of the numbers being discussed here. Page 29 shows the tax on 75K salary - 26,482 in Ireland and 26,413 in Sweden. Pages 27 to 30 show international comparisons from 18K salary up to 150K salary. Ireland goes from being a massive outlier at 18K (charging way less tax than the other countries on the chart) to being towards the top once you get 55K and above.

[broken link removed]

So (as ashambles points out), higher earners get to pay Swedish levels of tax but get nowhere near Swedish level services. And (as Purple pointed out), they get vilified by the left wing politicians and commentators for their troubles. Happy days...

 

[TheBigShort]

It's above €75,000. It is clear. Look at the charts on pages 30 and 31. The low paid are very under taxed; someone on €18,000 in Ireland pays €705 a year in income taxes. Someone on €18,000 in Sweden pays €3,201 a year in income taxes. They pay 450% more income tax in Sweden.

Thanks for clarifying that. For all the benefits of the much vaunted Swedish/Nordic model paying €3,201 in tax would be a bargain. My childcare comes in at €11,500 a year.
But I haven't seen anyone here propose that we adopt the Swedish/Nordic model. All I see is shift the burden to lower paid workers, without proposing what services would be provided.

 

[Purple]

Thanks for clarifying that. For all the benefits of the much vaunted Swedish/Nordic model paying €3,201 in tax would be a bargain. My childcare comes in at €11,500 a year.
But I haven't seen anyone here propose that we adopt the Swedish/Nordic model. All I see is shift the burden to lower paid workers, without proposing what services would be provided.

There fore two different issues coming out of your point.
The first is about the value we get for the taxes we pay. Considering our very young population we should have considerably lower health and pension costs than our neighbours in order to deliver the same services.
That would require a massive reforms in the State sector and much better value for money for the tax payer.

The second is that we have a very narrow tax base which leaves us open to economic shocks. That's just a bad taxation model.

 

[Sarenco]

Interesting stat from the Tax Institute's paper:-

A self-employed person earning €18,000 will pay €1,820 more in tax than a PAYE worker
on the same salary and self-employed person earning €150,000 will pay €2,600 more.

 

[ashambles]

But I haven't seen anyone here propose that we adopt the Swedish/Nordic model.

That's exactly my view, I propose their taxation and their social model. However that's with the understanding ours is largely an irreversible mess.

 

[Purple]

A bit out of date but a good article in the Nordic countries, with a particular emphasis on Sweden.
If people want bigger government they should first ensure that there is better government.

 

[TheBigShort]

[QUOTE="Sarenco, post: 1487759, member:

A self-employed person earning €18,000 will pay €1,820 more in tax than a PAYE worker
on the same salary and self-employed person earning €150,000 will pay €2,600 more.[/QUOTE]

And a self employed person can make business cost deductions against the tax liability for costs necessarily incurred.
A PAYE work cannot do that. What is the point here?

 

[Sarenco]

And a self employed person can make business cost deductions against the tax liability for costs necessarily incurred.
A PAYE work cannot do that.

Sorry, I don't understand your point.

A PAYE taxpayer obviously cannot make a deduction for expenses they haven't incurred! Or are you suggesting that the self-employed should be taxed on their gross turnover?

 

[Purple]

And a self employed person can make business cost deductions against the tax liability for costs necessarily incurred.
A PAYE work cannot do that. What is the point here?

A PAYE earner can do the same thing; they claim expenses from their employer such as mileage, overnight allowances etc.

The only people who have to pay taxes on their costs are landlords.