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



## Brendan Burgess (28 Sep 2016)

There used to be data which showed that the top 10% of earners paid 30% of all taxes. 

Is this still published? Any good analysis of it anywhere? 

Brendan


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## Sarenco (28 Sep 2016)

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

[broken link removed]


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## Brendan Burgess (28 Sep 2016)

Thanks Sarenco - that's great 

I have also found this published by Revenue for 2017


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## Purple (28 Sep 2016)

This, from Ronan Lyons, is a little out of date but excellent as it takes all income into account.


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## Protocol (28 Sep 2016)

Please note that you appear to be referring to *income tax alone*, rather than all taxes.

[broken link removed]

This estimates the total taxes paid across all deciles.


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## Brendan Burgess (28 Sep 2016)

Sarenco said:


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



From looking at the Revenue data for 2017

The top 10% (roughly) earn 37% of the income and pay 60% of the total tax. 
The bottom 10%


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## Brendan Burgess (28 Sep 2016)

Hi Protocol

It's income taxes and USC. 

PRSI is supposedly a social insurance. You pay a premium and you get a pay related benefit when you claim.

Brendan


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## Sarenco (28 Sep 2016)

Purple said:


> This, from Ronan Lyons, is a little out of date but excellent as it takes all income into account.



I think Ronan's observation is interesting that our taxation system is simultaneously excessively progressive (in the sense that high earners pay a disproportionately high level of income tax/USC) _and _excessively regressive (in the sense that low earners pay a disproportionately high proportion of their income on VAT).

I suppose that feeds into an argument that middle income families actually get a particularly good deal under our tax/welfare system.



Protocol said:


> Please note that you appear to be referring to *income tax alone*, rather than all taxes.
> 
> [broken link removed]
> 
> This estimates the total taxes paid across all deciles.



I would treat any research that emanates from the Nevin Institute with extreme caution.


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## Purple (28 Sep 2016)

Sarenco said:


> I would treat any research that emanates from the Nevin Institute with extreme caution.


Big +1 to that. They are the (mis)information department of the Trade Union movement.


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## Firefly (28 Sep 2016)

Brendan Burgess said:


> I have also found this published by Revenue for 2017



Interesting....(If I am reading this correctly!)
The two groups that pay the most in taxes are those earning between 100k-150k and those earning more than 275k. As the asterix notes, those jointly elected are counted as one, and given the large number of those earning between 100k-150k (102,241) I would think that this group is made up largely of jointly assessed couples. These couples could very well have individual salaries of 55k and still end up in this group....ie a lot of couples in here could very well be the "squeezed middle" and are paying the most in taxes (along with those earning 275k+)


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## ashambles (28 Sep 2016)

Purple said:


> Big +1 to that. They are the (mis)information department of the Trade Union movement.


There was a brief discussion on Prime Time on tax last Monday week, first RTE had an ICTU funded TASC economist (Nat O'Connor), then for a bit of balance they'd an ICTU funded NERI economist (Michael Collins), both with the same view - essentially "isn't tax great - we should have more of it". I'd wondered why ICTU had two "think" tanks, now I'm impressed with their pre-budget media manipulation.


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## Purple (28 Sep 2016)

ashambles said:


> There was a brief discussion on Prime Time on tax last Monday week, first RTE had an ICTU funded TASC economist (Nat O'Connor), then for a bit of balance they'd an ICTU funded NERI economist (Michael Collins), both with the same view - essentially "isn't tax great - we should have more of it". I'd wondered why ICTU had two "think" tanks, now I'm impressed with their pre-budget media manipulation.


Don't forget that just about everyone in RTE is also a member of an ICTU Union.


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## ashambles (28 Sep 2016)

Brendan Burgess said:


> PRSI is supposedly a social insurance. You pay a premium and you get a pay related benefit when you claim.


I realise you said supposedly, but despite the name PRSI has to be considered a tax, and as a consequence we don't really have social insurance.

This is the IMF view.


			
				IMF said:
			
		

> Note 8 page 37 from the IMF
> The Irish welfare system does not differentiate significantly between social insurance and social assistance, or
> between contributory and non-contributory state pensions. Accordingly, PRSI contributions do not bear a strong
> link to welfare benefits, so that it is acceptable to combine (employee) PRSI with income tax and USC when
> looking at personal income taxation in Ireland



There's a extremely weak relationship between what is paid in to what is paid out. For example jobseeker's benefit pays out 9 months if you've 5 years payments made, i.e a 50k worker would have paid 10k euro in PRSI (30k including employers) and get out around 7k in "support".

The amount paid in is not capped, the amount paid out is capped. It's not widely known, but Irish high earners due to this lack of a cap pay far more in social insurance than their higher paid counterparts in countries with enviable social systems, and they can expect nothing from it since a means tested version of the contributory pension is not unthinkable.


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## Protocol (28 Sep 2016)

Sarenco said:


> I would treat any research that emanates from the Nevin Institute with extreme caution.



While clearly the NERI is a socialist-supporting organisation, I would not doubt the facts/data used by Micheal Collins.

If you can show that any of the data he used is wrong, please go ahead.


PS I am not a supporter of NERI.


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## Sarenco (28 Sep 2016)

ashambles said:


> first RTE had an ICTU funded TASC economist (Nat O'Connor).



To be fair, TASC doesn't appear to be ICTU funded and I think they do produce thought provoking research -

[broken link removed]

The Nevin Institute on the other hand ...


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## Brendan Burgess (28 Sep 2016)

Protocol said:


> If you can show that any of the data he used is wrong, please go ahead.



Hi Protocol 

Loads of examples where they publish completely misleading information 

http://www.askaboutmoney.com/threads/nevin-institute-low-paid-pay-more-tax.188862/

http://www.askaboutmoney.com/threads/how-much-do-top-earners-pay-in-income-tax.172890/

They do some good work, as does TASC, but they ruin it with misleading analysis. 

Brendan


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## ashambles (28 Sep 2016)

Protocol said:


> If you can show that any of the data he used is wrong, please go ahead.


It's not data but on that Prime Time program I mentioned there was some discussion of whether income tax should be brought in at lower levels - much like it is in countries like Sweden. 

Collins literally laughed this off by saying the low paid have so little income that such a tax wouldn't generate worthwhile revenue.

A nice bit of misinformation since in fact around 2m taxpayers (not just low earners) would pay income tax at that level and it would generate large and reliable revenue.


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## Brendan Burgess (28 Sep 2016)

ashambles said:


> A nice bit of misinformation since in fact around 2m taxpayers (not just low earners) would pay income tax at that level and it would generate large and reliable revenue.



Are you sure? 

Would they not just quit working and go on the dole? 

Ideologically, I agree that the lower paid should pay more tax. But with such generous social welfare payments, it wouldn't work in Ireland, unless...

Brendan


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## Protocol (28 Sep 2016)

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.


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## T McGibney (28 Sep 2016)

Brendan Burgess said:


> Are you sure?
> 
> Would they not just quit working and go on the dole?
> 
> Ideologically, I agree that the lower paid should pay more tax. But with such generous social welfare payments, it wouldn't work in Ireland, unless...



Nobody would deliberately stymie their own career and go on the dole solely for the sake of say €500-€1,000 a year in income tax. 

When I was a trainee acccountant in the late 80s I earned approx £60 per week and paid a few pounds in tax every week. It didn't do me any harm.


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## T McGibney (28 Sep 2016)

Protocol said:


> 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.


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## TheBigShort (30 Sep 2016)

Sarenco said:


> 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 Swede_n,
(_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.


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## TheBigShort (30 Sep 2016)

Brendan Burgess said:


> 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.


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## Purple (30 Sep 2016)

TheBigShort said:


> 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.


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## Purple (30 Sep 2016)

TheBigShort said:


> 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.).



TheBigShort said:


> 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.


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## odyssey06 (30 Sep 2016)

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.


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## Protocol (30 Sep 2016)

TheBigShort said:


> _• Taxpayers earning €75,000 pay more personal taxes than people in Swede_n,
> (_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.


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## Protocol (30 Sep 2016)

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%


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## Purple (30 Sep 2016)

Protocol said:


> OECD data 2015
> 
> [broken link removed]
> 
> ...



That's not €75,000 though.


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## ashambles (30 Sep 2016)

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.


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## Purple (30 Sep 2016)

ashambles said:


> 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.


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## orka (30 Sep 2016)

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...


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## TheBigShort (30 Sep 2016)

Purple said:


> 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.


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## Purple (30 Sep 2016)

TheBigShort said:


> 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.


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## Sarenco (30 Sep 2016)

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.


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## ashambles (30 Sep 2016)

TheBigShort said:


> 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.


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## Purple (30 Sep 2016)

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.


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## TheBigShort (30 Sep 2016)

[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?


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## Sarenco (30 Sep 2016)

TheBigShort said:


> 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?


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## Purple (30 Sep 2016)

TheBigShort said:


> 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.


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## TheBigShort (30 Sep 2016)

Purple said:


> 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.



Fair point.


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## TheBigShort (3 Oct 2016)

Brendan Burgess said:


> There used to be data which showed that the top 10% of earners paid 30% of all taxes.



And a quick calculation of the details contained in one of your other posts indicates that the top 10% earn 30% of the income.



Brendan Burgess said:


> I have also found this published by Revenue for 2017


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