# Low-paid workers’ exemption from tax base ‘unfair’ on middle earners



## Purple (20 Jan 2022)

The Irish Tax Institute thinks that exempting 700,000 working people from the tax net is unfair on middle income tax payers.
I agree, especially since so many low paid people actually live in middle to high income households. It's largely a tax break on students and part time employees, paid for by those on average incomes who pay rent or mortgages and childcare. There is already a generous welfare system in place to support those on low incomes who need it.


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## Brendan Burgess (20 Jan 2022)

So, are you suggesting that the household should be taxed? 

Daddy earns €100k a year and pays 52% marginal rate tax.  So trainee accountant daughter earning €20k should pay 52% on all her income? I presume you are not suggesting this. 

So people need to assessed on their own earnings. 

The big problem is that  middle earning families with children pay very little tax or negative tax.  There are only a few ways to solve this: 
1) Increase taxes on lower paid
2) Stop supporting children 
3) Abolish joint assessment 
4) Increase tax rates on the higher paid

None seems attractive. 

Brendan


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## MugsGame (20 Jan 2022)

I'd probably benefit hugely from broadening the tax base in this way, but is taxing lower paid jobs more (which we already have problems filling?) in our overall best interests?

And isn't the the counter-argument that our high consumption taxes disproportionally target the lower paid (as they are forced to spend a greater portion of their income on necessities) ?

Pensioners are a different matter. I think the healthy elderly are infantilized by the media in general and I'd have no problem with wealthier OAPs paying their fair share of income tax.

I'd worry though that any policy change on taxation of the lower paid or pensioners would be just the PR disaster needed to bring SF into government.


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## Purple (20 Jan 2022)

Brendan Burgess said:


> So, are you suggesting that the household should be taxed?


No. 
I'm linking to an article that I broadly agree with. I don't think 700,000 people should pay no income tax.
I started paying income tax in a summer job at 14. What's wrong with a low rate of tax on low earners?

If a low earner, or two low earners, is/are heading a household there are welfare supports in place to help them. If they need more then provide more. My kids working summer jobs don't need to be removed from the tax net. When they start work and are still living with me they should be paying some tax.


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## Purple (20 Jan 2022)

MugsGame said:


> And isn't the the counter-argument that our high consumption taxes disproportionally target the lower paid (as they are forced to spend a greater portion of their income on necessities) ?


Yes, but VAT was always high and people on low incomes used to pay income tax and social insurance.


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## Peanuts20 (20 Jan 2022)

Lower paid people do pay tax. A single person on minimum wage full time job will pay some income tax (around 3%) and have total deductions of around 6.25% from their salary

A person on the so called "living wage" in a full time role will pay around 6.5% in tax and have total deductions of around 12%

Whether the pay enough tax is another story but the impact of fixed charge taxes such as TV licence, property tax etc is far greater on those then on higher earners


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## Purple (20 Jan 2022)

Peanuts20 said:


> Lower paid people do pay tax. A single person on minimum wage full time job will pay some income tax (around 3%) and have total deductions of around 6.25% from their salary
> 
> A person on the so called "living wage" in a full time role will pay around 6.5% in tax and have total deductions of around 12%
> 
> Whether the pay enough tax is another story but the impact of fixed charge taxes such as TV licence, property tax etc is far greater on those then on higher earners


Not if they aren't heading a household and the vast majority of low paid people aren't. I've no problem with low taxes and welfare supports for people who need them but this is like a universal payment. I'd rather a more targeted approach. There are plenty of cased where two middle income earners are jointly heading a household. They are paying taxes that could be carried more easily by people on lower incomes who are living in high income households. We shouldn't be using tax policy as a form of shotgun welfare.


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## mathepac (20 Jan 2022)

Purple said:


> but this is like a universal payment.


Start by eliminating the one universal payment that crosses all tax boundaries - Child Benefit.  Eliminate this payment to households/earners above a certain threshold, €200k p/a maybe and tax it above another threshold, €150k p/a perhaps.

Another area that needs to addressed urgently is the Free Electricity Allowance, FEA.  This is stuck at its current daily rate of €1.01381932 plus vat @ 13.50% for several years now despite rapidly increasing energy costs and standing charges on electricity bills. The imminent once-off universal payment of €100 will still leave those entitled to the  FEA seriously and disproportionately out of pocket with higher earners. OK so it's a benefit and not a tax, but it needs looking at urgently.


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## ClubMan (20 Jan 2022)

mathepac said:


> Start by eliminating the one universal payment that crosses all tax boundaries - Child Benefit.


Hardly a *universal* payment when only those with children get it?


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## Gordon Gekko (20 Jan 2022)

How much is there to be saved by making Child Benefit taxable for people earning over €200k pa?

Not much in the grand scheme of things I strongly suspect.

I agree with the overarching point though; it’s not fair that there are 700,000 people paying no income tax or USC. The tax burden at the higher end is too great.


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## The Horseman (20 Jan 2022)

Everyone should pay some tax. The smaller the number of people paying income tax, the over reliance we place on a source of tax revenue that can disappear. 

Look at our reliance on the property sector in the past, look at our reliance on corporation tax. Whether people like it or not you cant continue to rely on middle Ireland to fund everything. 

A wealth tax is not an answer as this discourages  the accumulation of wealth as a result of sacrifices made by working people.


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## Gordon Gekko (20 Jan 2022)

It wouldn’t be that hard to move to Northern Ireland and commute if the tax burden got too high here.


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## Purple (21 Jan 2022)

Gordon Gekko said:


> It wouldn’t be that hard to move to Northern Ireland and commute if the tax burden got too high here.


It would if you worked in Cork.


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## Purple (21 Jan 2022)

The Horseman said:


> Everyone should pay some tax. The smaller the number of people paying income tax, the over reliance we place on a source of tax revenue that can disappear.
> 
> Look at our reliance on the property sector in the past, look at our reliance on corporation tax. Whether people like it or not you cant continue to rely on middle Ireland to fund everything.


A broader tax base has been recommended by just about everyone who has examined our tax system.


The Horseman said:


> A wealth tax is not an answer as this discourages  the accumulation of wealth as a result of sacrifices made by working people.


Wealth taxes are fair and equitable. Most wealth accumulated in Ireland in the last decade is not as a result of work or sacrifices made by working people. It's due to capital appreciation.


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## Purple (21 Jan 2022)

mathepac said:


> Start by eliminating the one universal payment that crosses all tax boundaries - Child Benefit.


I'd increase it by 30% and then make it taxable. Or just get rid of it and make it a refundable tax credit.


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## Peanuts20 (21 Jan 2022)

Any tax of lower paid workers would need to be balanced against reform of the SW system to not disincentivise people to actually go to work. it's not just as simple as increasing tax on those on minimum wage.


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## Purple (21 Jan 2022)

Peanuts20 said:


> Any tax of lower paid workers would need to be balanced against reform of the SW system to not disincentivise people to actually go to work. it's not just as simple as increasing tax on those on minimum wage.


True, but most people on minimum wage don't live in low income households so they wouldn't get welfare anyway.


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## Allpartied (21 Jan 2022)

The way to increase tax take is to increase low  wages. 
The way to reduce dependency on Social welfare, for those on low wages is to increase wages. 
The way to increase wages is to encourage organised labour and strong trade unions.


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## ashambles (21 Jan 2022)

This move to move low income out of the tax net was Bertie Ahern's and the trade unions/social partners legacy. Economic simpletons who neither understood socialism or how to build a robust tax system that can fund a Nordic style of socialism. 

We now have one of worst outcomes for middle income earners with their taxes close to higher tax EU countries, but it's a fragile income tax system having few of the social benefits those countries can offer, often some type of income linked state pensions, better healthcare, childcare, public transport.  

Keeping low income out of the tax net has been the policy in Ireland for over 20 years.  To undo it in the current climate of political populism would be very slow - decades of gradual movement - even if any of the political parties showed an interest in doing so. Realistically it won't happen while any of us are still working.  One of the biggest financial crashes in modern economic history only temporarily made a dent in it.


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## ClubMan (21 Jan 2022)

Purple said:


> True, but most people on minimum wage don't live in low income households so they wouldn't get welfare anyway.


What data shows this to be the case?


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## Purple (21 Jan 2022)

ClubMan said:


> What data shows this to be the case?


The last point of the executive summary of this makes that point.
Section 3.3 states;
_3.3 THE EFFECT OF THE MINIMUM WAGE CHANGE ON HOUSEHOLD INCOME Figure 3.7 indicates that the 2016 minimum wage increase had little effect on the gross household income distribution, using either measure of income. The minimum wage effect oscillates around zero and is not statistically significant at any point of the annual equivalised gross income distribution. The effect is also close to zero for most of the equivalised monthly gross employment income distribution (ranging from €0 to €5,000 per month) although a small, positive and marginally statistically significant effect is observed at one point (€800 per month).20 Therefore, there is no strong evidence to indicate that the increase in the minimum wage impacted household income. While we observe strong effects when looking at the hourly wage distribution of individual employees, the fact that minimum wage workers are located along the entire household income distribution, and are typically not primary earners within households, means that these effects do not translate into household income. This is in line with some of the recent literature on the relationship between the level of the minimum wage and income inequality (Logue and Callan, 2016; MaCurdy, 2015; Caliendo et al., 2017)._

If we want to reduce poverty then have a more graduated reduction in welfare supports. Increasing the minimum wage has little or no impact on poverty.


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## Leo (21 Jan 2022)

Gordon Gekko said:


> It wouldn’t be that hard to move to Northern Ireland and commute if the tax burden got too high here.


You'd need the employer to facilitate that as there would be implications for them. Covid and remote working has brought that to the fore and most of the large employers who didn't already already have introduced rules stating employees must live within the jurisdiction.


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## Gordon Gekko (21 Jan 2022)

Leo said:


> You'd need the employer to facilitate that as there would be implications for them. Covid and remote working has brought that to the fore and most of the large employers who didn't already already have introduced rules stating employees must live within the jurisdiction.


You would indeed


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## Allpartied (21 Jan 2022)

ashambles said:


> This move to move low income out of the tax net was Bertie Ahern's and the trade unions/social partners legacy. Economic simpletons who neither understood socialism or how to build a robust tax system that can fund a Nordic style of socialism.
> 
> We now have one of worst outcomes for middle income earners with their taxes close to higher tax EU countries, but it's a fragile income tax system having few of the social benefits those countries can offer, often some type of income linked state pensions, better healthcare, childcare, public transport.
> 
> Keeping low income out of the tax net has been the policy in Ireland for over 20 years.  To undo it in the current climate of political populism would be very slow - decades of gradual movement - even if any of the political parties showed an interest in doing so. Realistically it won't happen while any of us are still working.  One of the biggest financial crashes in modern economic history only temporarily made a dent in it.


The Nordic style socialism does not have a minimum wage.  That is because their governments encourage and actively support trade unions.  They enforce, by law, the principle of collective bargaining.  
This means that they have much higher wages than the rest of Europe.  
Their tax systems are not much different, but wages are much higher.   So more people pay tax.


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## Purple (21 Jan 2022)

Allpartied said:


> The Nordic style socialism does not have a minimum wage.  That is because their governments encourage and actively support trade unions.  They enforce, by law, the principle of collective bargaining.
> This means that they have much higher wages than the rest of Europe.
> Their tax systems are not much different, but wages are much higher.   So more people pay tax.


Yep, the Trade Unions in places like Denmark work closely with employers to ensure that work practices are efficient and businesses profitable so that higher wages can be paid. I agree with high minimum wages. I have a big problem with paying people under 18 a lower wage for doing the same job as someone over 18. I don't like employers who don't pay shift allowances or overtime or higher rates for weekend work. It would be great if we didn't have the "them and us" culture in industrial relations in so much of the Unionised sector but we do. It's hard to say who's to blame, probably everyone, but it's hard to build something like the Danish model in such an environment.


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## Interest% (21 Jan 2022)

Middle income should get the tax exemption.
My salary is double my partners 30k vs 60k yet i only take home 1000k more per month. So that 30k extra only nets me 12k extra. 18 grand to the taxman.


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## Interest% (21 Jan 2022)

Purple said:


> Jasus, Are you paying a pension levy?
> Are you saying that meddle and low income earners should both be on the lower tax band?


6% pension contribution per year of base pay. 60k is the total plus shift. so 6% of base paid into pension.
What is a pension levy?
I'm Saying that for that extra 30k i earn why am i paying 60% of it to the taxman.
Most defiantly middle income earners should have a higher rate of cut off before they pay 40% tax.


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## Purple (21 Jan 2022)

Interest% said:


> 6% pension contribution per year of base pay. 60k is the total plus shift. so 6% of base paid into pension.
> What is a pension levy?
> I'm Saying that for that extra 30k i earn why am i paying 60% of it to the taxman.
> Most defiantly middle income earners should have a higher rate of cut off before they pay 40% tax.


6% pension contribution is still your money, not the taxman's. That's income you are choosing to save in a private pension. 
The marginal rate, including PRSI and USC is around 50% so I don't see how you're 60%.


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## Interest% (21 Jan 2022)

Sorry forget the pension for the moment.
My calculations were off a touch my bad.

Take a 30k p/a worker pays 4,437 in total tax prsi usc.

60k worker
Total tax = 17,627
First 30k =4,437
Second 30k = 13,190
_Pay 8,753 more on the Second 30k._
Id like to see a big increase in the tax rate bands before one has to pay 40% tax.


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## Itchy (21 Jan 2022)

Interest% said:


> Sorry forget the pension for the moment.
> My calculations were off a touch my bad.
> 
> Take a 30k p/a worker pays 4,437 in total tax prsi usc.
> ...



Sorry but that's just how progressive taxation works. You've compared the "undertaxed" portion of your income and "overtaxed" portion while ignoring the _effective_ rate. If they were equal you would be for a flat tax.



Interest% said:


> Id like to see a big increase in the tax rate bands before one has to pay 40% tax.



And who would you like to pay for your tax cut? People like your partner and those on lower incomes who are not currently in the tax net as per the OP? Or raise the higher rate? Cut some services perhaps?


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## Interest% (21 Jan 2022)

Itchy said:


> Sorry but that's just how progressive taxation works. You've compared the "undertaxed" portion of your income and "overtaxed" portion while ignoring the _effective_ rate. If they were equal you would be for a flat tax.
> 
> 
> 
> And who would you like to pay for your tax cut? People like your partner and those on lower incomes who are not currently in the tax net as per the OP? Or raise the higher rate? Cut some services perhaps?


Reduce big fat government salary's and golden handshakes for start. 

And if you dont pay tax or have not built up tax credits unless your physically or mentally not able to then there should be no incentive to pay out state welfare. The country is awash with people scamming the system nd the government are only too happy to use tax payers money to fuel it.


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## Purple (22 Jan 2022)

Interest% said:


> Reduce big fat government salary's and golden handshakes for start.


We don’t have a big government sector by European standards. There’s an argument that the public sector is too big but the civil service definitely isn’t. 


Interest% said:


> And if you dont pay tax or have not built up tax credits unless your physically or mentally not able to then there should be no incentive to pay out state welfare. The country is awash with people scamming the system nd the government are only too happy to use tax payers money to fuel it.


The rates of welfare we pay are high, particularly for households with low earned income, but there’s not much evidence that we are awash with people scamming the system. Working people are probably just as likely to scam the system and people claiming to be single parents who aren’t and tradespeople doing mixers and teachers doing grinds for cash and doctors and solicitors skimming cash are no different to people claiming welfare that they don’t really qualify for.


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## Purple (22 Jan 2022)

Itchy said:


> Sorry but that's just how progressive taxation works. You've compared the "undertaxed" portion of your income and "overtaxed" portion while ignoring the _effective_ rate. If they were equal you would be for a flat tax.


I don’t think anyone is suggesting a flat tax here, rather they are questioning if our system is fair based on how progressive it is. It’s not so long ago that the top rate was 40%, there was no USC and everyone who worked full time paid some income tax. The country functioned just fine.


Itchy said:


> And who would you like to pay for your tax cut? People like your partner and those on lower incomes who are not currently in the tax net as per the OP?


Yes, that would be fair. As I’ve pointed out most low income earners live in medium to high income households. It is unfair that they are subsidised by people in lower income households.


Itchy said:


> Cut some services perhaps?


Only a government does that. Organisation who operate in the real world have to satisfy the customer no matter what.


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## Interest% (22 Jan 2022)

Purple said:


> We don’t have a big government sector by European standards. There’s an argument that the public sector is too big but the civil service definitely isn’t.
> 
> The rates of welfare we pay are high, particularly for households with low earned income, but there’s not much evidence that we are awash with people scamming the system. Working people are probably just as likely to scam the system and people claiming to be single parents who aren’t and tradespeople doing mixers and teachers doing grinds for cash and doctors and solicitors skimming cash are no different to people claiming welfare that they don’t really qualify for.


Former Taoiseach Brian Cowen -- the man who signed the bank guarantee which lost our economic sovereignty to the IMF -- is now retired at the age of 51 on a pension of over €150,000 a year, for life!

His predecessor Bertie Ahern, who oversaw the boom and bust in our economy, gets even more, at €152,000 a year.
Thats taxpayers money. The people elected to run the country instead ruined it and set them selves up for life. Their the biggest scammers of the system the ones that govern it.
After all who decides what salary and pension they get- its not the taxpayer nor the people who voted..

As far as the social welfare for so called lone parent scammers or a one income household they should be getting help from the welfare system. Unmarried couples cohabiting get notting but yet revenue classes them as single and the state as a couple for means. Notting against a mother or father who is not working getting welfare weather there in a relationship or married or not. Id fully support that.
As regards people doing nixers there not paying tax but there not scamming the welfare system either.


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## Purple (24 Jan 2022)

Interest% said:


> Former Taoiseach Brian Cowen -- the man who signed the bank guarantee which lost our economic sovereignty to the IMF -- is now retired at the age of 51 on a pension of over €150,000 a year, for life!
> 
> His predecessor Bertie Ahern, who oversaw the boom and bust in our economy, gets even more, at €152,000 a year.


They The dye was cast long before the bank guarantee was signed. I'm very critical of Bertie's populism and the way in which he bought votes with windfall taxes from a credit fuelled property bubble. The pension is big but not by the standards of the heads of most large organisations but it tells us nothing about overall pensions in the State sector. 



Interest% said:


> Thats taxpayers money. The people elected to run the country instead ruined it and set them selves up for life. Their the biggest scammers of the system the ones that govern it.
> After all who decides what salary and pension they get- its not the taxpayer nor the people who voted..


The people elect the politicians who make the decisions. That's representative democracy for you. 


Interest% said:


> As far as the social welfare for so called lone parent scammers or a one income household they should be getting help from the welfare system. Unmarried couples cohabiting get notting but yet revenue classes them as single and the state as a couple for means. Notting against a mother or father who is not working getting welfare weather there in a relationship or married or not. Id fully support that.


So a parent who is not working who is cohabiting with someone on a pension of €150,000 a year should get welfare payments? Why?



Interest% said:


> As regards people doing nixers there not paying tax but there not scamming the welfare system either.


No, they are not paying their taxes which is exactly the same thing. In both cases the State is has less money due to the dishonesty of citizens. One cohort is stealing money on the way into the pot and the other is stealing it on the way out. The outcome is exactly the same. If you are not paying your taxes you've no business complaining about welfare fraud. If you do you're not just a thief, you're a hypocrite.


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## Peanuts20 (26 Jan 2022)

Interest% said:


> Former Taoiseach Brian Cowen -- the man who signed the bank guarantee which lost our economic sovereignty to the IMF -- is now retired at the age of 51 on a pension of over €150,000 a year, for life!
> 
> His predecessor Bertie Ahern, who oversaw the boom and bust in our economy, gets even more, at €152,000 a year.
> Thats taxpayers money. The people elected to run the country instead ruined it and set them selves up for life. Their the biggest scammers of the system the ones that govern it.
> ...


I'll always respect Bertie for travelling to Belfast straight after his mother's funeral to continue the negotiations for the Good Friday agreement. I'm also part of the generation that emigrated and were able to return home because of that boom, If it hadn't been for that, me and many thousands of Irish people would still be overseas. So as far as I am concerned, cheers Bertie. I know that everyone wont agree with me but tough on that one.

Cowan was out of his depth but how much of the IMF was down to him and how much of it was down to Irish people partying and thinking property prices would keep going in one direction?. Not his fault people decided they had to buy apartments in Cape Verde or Bulgaria. And it's not as if he's enjoying his pension given his health issues.

In terms of cohabiting couples, they are broadly treated the same as married couples for any means tested social welfare payment.




__





						Marital status and social welfare entitlements
					

In certain situations, married couples in Ireland may be     entitled to certain social welfare benefits not available to     unmarried people. Find out more information and where to     apply.




					www.citizensinformation.ie
				




as for nixers, next time you get paid, look at your tax, your tax would be lower if they paid their taxes


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## ClubMan (26 Jan 2022)

Purple said:


> They The dye was cast long before the bank guarantee was signed.


That's very colourful language for Askaboutmoney...


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## Brendan Burgess (27 Jan 2022)

Is Ireland a high tax country for workers?
					

Yes if you have a big income, but those on low incomes do well by international standards




					www.irishtimes.com
				




_Yes if you have a big income, but those on low incomes do well by international standards_​


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## Ndiddy (27 Jan 2022)

Brendan Burgess said:


> Is Ireland a high tax country for workers?
> 
> 
> Yes if you have a big income, but those on low incomes do well by international standards
> ...


what counts as low income?  moderate income?


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## Purple (28 Jan 2022)

Ndiddy said:


> what counts as low income?  moderate income?


Anyone who earns more than you is on a high income. 
Anyone who has more than you is rich.
People who have the same as you pay too much tax. 
People who earn more than you don't pay enough tax.

I think that's pretty much how it works.


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## Horatio (28 Jan 2022)

Gordon Gekko said:


> It wouldn’t be that hard to move to Northern Ireland and commute if the tax burden got too high here.


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## Horatio (28 Jan 2022)

Purple said:


> A broader tax base has been recommended by just about everyone who has examined our tax system.
> 
> Wealth taxes are fair and equitable. Most wealth accumulated in Ireland in the last decade is not as a result of work or sacrifices made by working people. It's due to capital appreciation.



...on principal residential property?


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## Purple (28 Jan 2022)

Interest% said:


> As far as the social welfare for so called lone parent scammers or a one income household they should be getting help from the welfare system. Unmarried couples cohabiting get notting but yet revenue classes them as single and the state as a couple for means. Notting against a mother or father who is not working getting welfare weather there in a relationship or married or not. Id fully support that.





Peanuts20 said:


> In terms of cohabiting couples, they are broadly treated the same as married couples for any means tested social welfare payment


The issue is where a couple cohabit but the mother claims to be a lone parent. I'm aware of a number of cases where she rents the house from her partner (who lives in the house) and claims HAPS. That is serious fraud and it is common. It is very common for the mother to claim to be a lone parent to get social housing even though the father/partner is actually living with her and their children.


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## Purple (28 Jan 2022)

Horatio said:


> ...on principal residential property?


Of course, that's where most of the wealth is. If the owner doesn't have the income to pay it then roll it over with a moderate interest rate and charge it on their estate when they die.


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## Horatio (28 Jan 2022)

Leo said:


> You'd need the employer to facilitate that as there would be implications for them. Covid and remote working has brought that to the fore and most of the large employers who didn't already already have introduced rules stating employees must live within the jurisdiction.


It's a very common practice on the continent, they even have categories of permits specifically for that cohort; Frontaliers. 
Granted UK < > ROI is not the same as EU < > EU.


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## Horatio (28 Jan 2022)

Purple said:


> Of course, that's where most of the wealth is. If the owner doesn't have the income to pay it then roll it over with a moderate interest rate and charge it on their estate when they die.


Fair enough but where I was going with that is the observation that residential property is already tax'd so that slice of wealth would either be excluded from the wealth tax or double tax'd or removed the LPT.


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## Purple (28 Jan 2022)

Horatio said:


> Fair enough but where I was going with that is the observation that residential property is already tax'd so that slice of wealth would either be excluded from the wealth tax or double tax'd or removed the LPT.


It's only a very small tax. The tax on a house worth €1.3 million is only €1,400 a year. If that rolled up, with interest, for 50 years it would still only amount to less than 10% of the value of the property.


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## Horatio (28 Jan 2022)

Purple said:


> It's only a very small tax. The tax on a house worth €1.3 million is only €1,400 a year. If that rolled up, with interest, for 50 years it would still only amount to less than 10% of the value of the property.











						Wealth Taxes in Europe
					

Net wealth taxes are recurrent taxes on an individual’s wealth, net of debt. The concept of a net wealth tax is similar to a real property tax. But instead of only taxing real estate, it covers all wealth an individual owns. As today’s map shows, only three European countries covered levy a net...




					taxfoundation.org
				




For reference:
*Net Wealth Taxes*​*Norway* levies a net wealth tax of 0.85 percent on individuals’ wealth stocks exceeding NOK1.5 million (€152,000 or US $170,000), with 0.7 percent going to municipalities and 0.15 percent to the central government. Norway’s net wealth tax dates to 1892. Under COVID-19-related measures, individual business owners and shareholders who realize a loss in 2020 are eligible for a one-year deferred payment of the wealth tax.

*Spain’s *net wealth tax is a progressive tax ranging from 0.2 percent to 3.75 percent on wealth stocks above €700,000 ($784,000; lower in some regions), with rates varying substantially across Spain’s autonomous regions (Madrid offers a 100 percent relief). Spanish residents are subject to the tax on a worldwide basis while nonresidents pay the tax only on assets located in Spain.

*Switzerland *levies its net wealth tax at the cantonal level and covers worldwide assets (except real estate and permanent establishments located abroad). The tax rates and allowances vary significantly across cantons. The Swiss net wealth tax was first implemented in 1840.

*Wealth Taxes on Selected Assets*​*France* abolished its net wealth tax in 2018 and replaced it that year with a real estate wealth tax. French tax residents whose net worldwide real estate assets are valued at or above €1.3 million ($1.5 million) are subject to the tax, as well as non-French tax residents whose net real estate assets located in France are valued at or above €1.3 million. Depending on the net value of the real estate assets, the tax rate is as much as 1.5 percent.

*Italy* taxes financial assets held abroad without Italian intermediaries by individual resident taxpayers at 0.2 percent. In addition, real estate properties held abroad by Italian tax residents are taxed at 0.76 percent.


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## Purple (28 Jan 2022)

@Horatio , it's a good idea but very hard to levy here due to the structural incompetence of our public administration.


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## Sophrosyne (30 Jan 2022)

Horatio said:


> It's a very common practice on the continent, they even have categories of permits specifically for that cohort; Frontaliers.
> Granted UK < > ROI is not the same as EU < > EU.


Potential wealth taxes would be administered by Revenue, one of our more efficient branches of Government administration.

The real problem is the design of a wealth tax for Ireland that would be worth the effort and yield more than just token amounts.

The ESRI published a Working Paper dated November 2016, which compared results based on models of existing household wealth taxes across Europe. It concluded:

*“Due to the imperfect correlation between income and wealth, we find that in almost every scenario, a non-negligible proportion of the tax would be collected from households in the lowest income deciles.”*

As an article in the IT summarized, that the problem with wealth taxes is “There not enough rich people”.


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## Horatio (30 Jan 2022)

So playing out that scenario a little...

If much of the potential wealth sits in lower income households, levying a wealth tax would in many cases force a liquidation of wealth to cater to to the wealth tax bill, right? So their wealth is eroded by the tax. 

Those same low income households are presumably paying low income tax.

Not sure where this goes just trying to play it out hypothetically...

Is Ireland unique in that much of the wealth tax would be harvested from low income households (assuming that assertion is accurate)?


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## Sophrosyne (30 Jan 2022)

Horatio said:


> So playing out that scenario a little...
> 
> If much of the potential wealth sits in lower income households, levying a wealth tax would in many cases force a liquidation of wealth to cater to to the wealth tax bill, right? So their wealth is eroded by the tax.
> 
> ...



This is the ESRI Working Paper.


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## Purple (31 Jan 2022)

Horatio said:


> So playing out that scenario a little...
> 
> If much of the potential wealth sits in lower income households, levying a wealth tax would in many cases force a liquidation of wealth to cater to to the wealth tax bill, right?


Why would that happen?

Property taxes can be deferred and levied on the estate. What other wealth is held in low income households?


Horatio said:


> So their wealth is eroded by the tax.


Yes, all wealth is eroded by taxes. Taxes transfer wealth, they do not destroy it.


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