People's opinions of a third income tax rate?

look, almost anything would be fairer than individualisation (or a strict aggregation system that pushes married income into higher rates and effectively penalises marriage). I'm all for fairness. Whatever is the fairest system i will support. Perhaps you have a point about the third rate in that sense. However I want to see something fairer than what we have at the moment - it is unfair that the government is pushing me out to work when i don't want to - i feel a third rate (and individualisation abolished) would at least allow me the option of staying or going
 
Not if you can't use lateral thinking. But then most men can't (my husband included ;) )

Of course it does. one of the principal arguments in favour of individualisation (for instance from Sean Fleming TD last night on Prime Time) is that individualisation lowers the marginal rate and allows a stay at home spouse to join the work force more easily. This is due to the large gap between the two tax rates, 21 per cent difference. With a third rate, at say, 32 per cent a spouse could join the work force at a lower marginal rate. That would abolish the principal reason for tax individualisation. This was the FG reply to tax individualisation back in 1999 and Charlie McCreevy appeared to like the idea, in fact he said he would reconsider it - but he never did. Instead we got individualisation .. more's the shame
 
Protocol said:
The UK have 3 rates
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Gordon Brown, in his recent budget announced the abolition of the lowest (10%) tax rate, leaving 2 rates of 20% and 40%.

Persons who had some of their salary taxed at 10% will now be taxed at 20%. An adjustment to tax credits is expected to compensate those who will pay more tax as a result.
 
i suggested this to an 'economist' and he laughed.. i think it's an excellent idea, but that the earned income threshold should be €100,000 at the highest rate - either way, both tax bands and thresholds should reflect true economic performance - ie, be adjusted in times of booms and busts...

cowen doubled mortgage interest relief, yet left the term for 7 years, when he should also have increased the term.. at least to 10 years...
 
I missed the start of this debate but it sounds like a horrible idea. I've never been convinced of the need for even two tax rates. A flat rate of tax is much fairer.

The government should be constantly seeking to reduce this rate, to remain as small a portion of the economy as possible. Nothing nullifies an economy as much as the distortion created by an overly large government.
 
One single flat rate of tax is not fairer. It is regressive.

More tax rates are more progressive and fairer.
 
Protocol said:
One single flat rate of tax is not fairer. It is regressive.
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If I had suggested that there should be two rates of tax 40% and 20% with the 20% rate levied on those who earned more than €100k a year and 40% on those who earned less, that would be regressive.

What is the justification for penalising people when they earn more? It makes them disinclined to work harder or strive for a better job if the government is going to confiscate half of the increase. This means companies need to offer higher wages to tempt people to move or accept promotions, further reducing our competitiveness.

Protocol said:
More tax rates are more progressive and fairer.
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So why stop at three? Why not have one hundred different rates depending on income and we'll have the fairest system in Europe, if not the world?
 
On balance I am happy enough with the tax system as it is but I can see the case for a flat rate. There is only so much that one person or family can consume in goods and services offered by the state. Why should someone earning €10 million pay over €4 million in tax? Their contribution to the exchequer is far higher than anything they could ever take back. It seems unfair.
If we set the ceiling for taxable income (the rate above which no tax was collected) at say ten million we could attract some of the super rich from around the world, those that don’t like Monaco. We have built our economy by stealing other countries corporation tax; why not steal some of their income tax as well? ;)
We could also remove some of the tax incentives that upset so many people.
I started paying tax as a first year apprentice; with a gross weekly income of IR£78 I paid £14 in tax and PRSI. I went onto the higher tax band, then 48%, as a third year apprentice. PRSI was on my entire income and was 9% (plus a health or employment levy). Our current system is much more progressive and equitable. Ubiquitous is completely right and this is another ill thought out populist policy from FG (my opinion, not his). I hate to admit it but if they get in I hope Labour get Finance, FG have lost the plot.
 
I'd be in favour of a third tax rate, but at the top. Once your income puts you into the super-rich bracket I don't think you should be paying the same rate as people just above the average industrial.

So obviously I'd say no way on the flat tax.
 
Brooklyn said:
I'd be in favour of a third tax rate, but at the top. Once your income puts you into the super-rich bracket I don't think you should be paying the same rate as people just above the average industrial.

So obviously I'd say no way on the flat tax.
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Do you mean that the third should be lower as they have already paid a large amount at 42%?
 
That's not the tone I got from his post. :p

If tax rates are to change I would be in favour of bringing them closer together, not further apart. I don't want us to end up like France with a millionaire leaving the country every day.
 
There already are millionaires leaving, or should I say, claiming to have left so that they can claim non-residence for tax purposes. They should do away with the non-resident exemption for the super super rich as well.
 
shanegl said:
If tax rates are to change I would be in favour of bringing them closer together, not further apart. I don't want us to end up like France with a millionaire leaving the country every day.
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Exactly, high-wage earners are extremely mobile and where they are not - they are usually pretty good at avoiding tax. The higher the tax, the more incentive there is to avoid it. Just ask Bono.

So in theory it sounds great levying 50% income taxes on millionaires but in practice they find some way to avoid it or they simply leave the country.

This country has prospered enormously since the introduction of a low corporation tax. I find it strange that so many people don't see similar benefits arising from a low flat-rate of income tax.
 
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room305 said:
This country has prospered enormously since the introduction of a low corporation tax. I find it strange that so many people don't see similar benefits arising from a low flat-rate of income tax.
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The principle has also been clearly demonstrated with capital gains tax and betting tax. In both cases, large cuts in the rates of these taxes resulted in big increases in the actual revenue collected.
 
I'm with purple here. 20% of €1m is more than 20% of €10k. That's progressive. I don't see why you should pay higher percentages the more you earn. You already pay more through paying a percentage at all. That's the fair part. If everyone paid 20% and we got rid of the tax breaks then things would be perfectly equitable.
Though stealing other countries income tax is indeed a novel suggestion!
 
Lower Rate Cutoff Point @ 20%

Standard Rate Cutoff Point @ 40%

Higher Rate Cutoff Point @ 60%

The Tax Credit removed lower paid employees from the Tax System.

The PRSI system will be done away with, along with it's Annual Ceiling etc.

The reality is that the PRSI will be changed to an accumulative system, ie like tax.

Towger
 
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