rip-off/how much tax do we pay?

[Purple]

Re: Different definitions and interpretations of "rip-off"

Over the last few years we have had; the introduction of what is now the highest minimum wage in Europe, benchmarking and massive increases in spending by government. Did people really think that these things would have no knock on effect on the cost of state provided goods and services? Did people really think that these state price increases would have no knock on effect on costs in the private sector?
If everyone in the country gets a 5% pay rise then their relative wealth stays the same. We just damage our economy.
Rip-off Ireland? I don't think so. At least it's not from a taxation point of view. I agree with ClubMan that we pay low indirect taxes (maybe too low), and moderate indirect taxes.

 

[ClubMan]

Re: Different definitions and interpretations of "rip-off"

If everyone in the country gets a 5% pay rise then their relative wealth stays the same.

Not everybody gets these increases. In fact, a few years ago I took a 25% pay cut in order to get back to work after several months unemployment having been made redundant. Thankfully I've gone back to something closer to the industry standard for my profession now but I've never received a nationally negotiated pay increased in my life.

 

[Purple]

Re: Different definitions and interpretations of "rip-off"

To be clear ClubMan I wasn't saying/implying that everyone gets the increases under national wage agreements. I was just making the point that if everyone goes up a step then no one has a better view (so to speak).
The reality is that the unions have sold out the poorest in society in order to get pay rises for their middleclass members in the public sector. Their insistence that income tax did not go up to pay for benchmarking meant that indirect taxes had to. This effected the poorest the most. These policies have also contributed to the loss of manufacturing jobs in the country. But I digress.
I have also never received a nationally negotiated pay increase and have had to take a pay cut in the past (about 30%) to move from a skilled manual position to a management roll.

 

[balga]

Re: Different definitions and interpretations of "rip-off"

Obstetrician Fees :

2001 £1600 expensive
2003 E2600 v expensive
2005 E3200 vv expensive.

 

[ClubMan]

Re: Different definitions and interpretations of "rip-off"

Obstetrician Fees :

2001 £1600 expensive
2003 E2600 v expensive
2005 E3200 vv expensive.

Where do these come from (he said nervously! )?

 

[Sue Ellen]

Re: Different definitions and interpretations of "rip-off"

"Originally Posted by balga
Obstetrician Fees :

2001 £1600 expensive
2003 E2600 v expensive
2005 E3200 vv expensive.

Where do these come from (he said nervously!)"

Hi Clubman,

Looks they are figures for 3 babies born over 2 year gaps and they sure do look like high charges/increases. In my baby days the fee used to go up by £50 per year for private patients but they appear to running amok now.

Just had a look at your previous thread and if thats anything to go by the ones mentioned above don't appear unusual! At a guess I would say they're for strictly private patients though so if your wife is getting either public or semi-private it might not be so bad - hopefully.

Trust they're both keeping well?

 

[ClubMan]

Re: Different definitions and interpretations of "rip-off"

Thanks. Yes - she's semi-private, combined care (alternating between GP and hospital) with VHI cover. Strangely we were never asked for the [broken link removed] we thought was standard for private/semi-private (or all?) patients. Thursday is the due date and things are going fine so far. We have found the public and semi-private care, treatment and facilities in the Rotunda and with her GP excellent all the way through the pregnancy.

 

[casiopea]

Re: Different definitions and interpretations of "rip-off"

Good luck to you and your wife for next thursday Clubman. Be sure and post the news when clubbaby shows!

cas.

 

[sherib]

Re: Different definitions and interpretations of "rip-off"

Originally posted by ubiquitous
A mythical single worker earning €30,000 on PAYE in 2004* (around the average industrial wage), with standard personal & employee credits) would have paid €3,880 in tax that year, or 12.9% of their income. A similar worker earning €40,000 that year would have paid €8,080, or 20.2% of their income.

* Applies to 2005 based on link below
The point I am trying to make is that the tax burden falls inequitably higher on the PAYE worker just above the average industrial wage. The figures here are for a single PAYE taxpayer who is a full rate PRSI contributor in 2005. The largest percentage increase in tax paid ( in 2005) is between €30,000 and €40,000 gross, i.e. +7.27% as posted by Ubiquitous.

Tax on incomes of €50,000, €60,000, €80,000, €100,000 and €120,000 is respectively:
€12,280, €16,480, €24,880, €33,280 and €41,680 or, as % of income:
24.56%, 27.47%, 31.1%, 33.28%, 34.7%.

On gross salaries from €50,000, €60,000, €80,000, €100,000 and €120,000 the % increase in tax is +4.36%, +2.91%, +3.63%, +2.18% and + 1.42%

These are the figures for 2005. I hope I am correct in assuming tax credits and exemptions (what are the exemptions?) are the same for all income brackets. There is a ceiling of €44,180 on PRSI but none on the Health Levy. The higher the income the less PRSI is paid as a % of gross income:

PRSI as a % of gross incomes of:
€30,000, €40,000, €50,000, €60,000, €80,000, €100,000 and €120,000 is:

5.12%, 5.34%, 4.92%, 4.5%, 3.9%, 3.6% and 3.33%.

A widening of the 20% tax band, at least linked to inflation, would improve the net income of everyone but especially those just above the average industrial wage. Cost increases impinge on everyone but proportionately more the lower the net income.

One further point with reference to SSIA incentives. The net difference between incomes of €40,000 and €30,000 is €5,200 - revenue taking 48% of that salary difference. If such a worker wishes to save the max SSIA costing €3,000+ p.a. this leaves €2,200 for cost of living increases. No need to tell me it is discretionary! I am simply pointing out such a worker is less likely to be able to afford a maxed SSIA. The cost of that bonanza will, possibly already is, be borne by all taxpayers. Not such a great idea but doubtless a vote catcher. Charlie McC's eipthaph
http://www.budget.gov.ie/2004/example4.asp#example4

On what income would 42% tax be paid? Is there anyone in this tax bracket?

 

[ClubMan]

Re: Different definitions and interpretations of "rip-off"

Are you sure that your figures above are correct? I checked some of them using [broken link removed] and got significantly different results for both tax and PRSI.

The largest percentage increase in tax paid ( in 2005) is between €30,000 and €40,000 gross, i.e. +7.27% .

I think that this is incorrect for 2005. Using Karl's calculator the figures are:

€30K
Tax €3282 (10.94% of gross)
PRSI €1526 (5.09%)
Total €4808 (16.03%)

€40K
Tax €7482 (18.71%)
PRSI €2136 (5.34%)
Total €9618 (24.05%)

There is a ceiling of €44,180 on PRSI but none on the Health Levy.

There is also a weekly/monthly PRSI (4%) exemption on the first €127/€551 of income.

 

[sherib]

Re: Different definitions and interpretations of "rip-off"

Originally quoted by ClubMan
Are you sure that your figures above are correct?

Yes, pretty certain. They tally with the figures posted by ubiquitous seemingly from the same table. They were extrapolated from this http://www.budget.gov.ie/2004/example4.asp#example4
However, since I'm not sure if the "proposed tax figure" from the DOF table includes PRSI, I have done the calcuation again (not using Karl) so it is clearer. I had a nice table but it went all over the place when I tried to copy it.

Referring to the DOF table, for all gross incomes from €30,000 to €120,000, I've added (a) "Proposed PRSI Levy and (b) "Proposed Tax Liability" and then calculated (a) + (b) as a percentage of gross income.

On €30,000 (a) PRSI is €1,536 and (b) is €3,880 = 5,416/30,000 = 18.05%.

On €40,000 (a) + (b) = €10,216/40,000 = 25.54%.
25.54% - 18.5% is +7.49% - the % increase in tax between 30K and 40K

On €50,000 (a) + (b) = €14,743/50,000 = 29.49%.
29.49% - 25.54% is +3.95% - the % increase in tax between €40K and €50K

On€60,000 (a) + (b) = €19,178/60,000 = 31.96%
31.96% - 29.49% = +2.47% - the % increase between €50K and €60K

On €80,000 (a) + (b) = €28,024/80,000 = 35.03%
35.03% - 31.96% = + 3.07% - the % increase between €80K and 60K

On €100,000 (a) + (b) = €36,855/100,000 = 36.86%
36.86% - 35.03% = + 3.83% - the % increase between €80K and €100,000

On €120,000 (a) + (b) = €45,670/100,000 = 38.06%
38.06% - 36.86% = + 1.2% - the % increase between €120K and €100K

My focus is on tax paid relative to gross income.
(PRSI on €30,000 is €1,536
PRSI on €120,000 is €3,990 - explained by ceiling on PRSI.
Yet no ceiling on Health Levy)

The largest % increase in tax on gross income is between €30,000 and €40,000. That is the sole point I am trying to make. Try the sums on a calculator based on Revenue's table. I can't use Karl's calculator! Please, could you test the figures on incomes of €50,000 to €120,000? I think that would show what I'm getting at.

Originally posted by ClubMan
There is also a weekly/monthly PRSI (4%) exemption on the first €127/€551 of income.

I don't understand that. Is it relevant to incomes of €30,000+?
Nevertheless, the fact is the greatest increase in the % of tax (18.05% to 25.54%) is between gross incomes of €30,000 and €40,000 as the DOF table shows. After that from €60,000 to €120,000, the sequential increase on every additional €10,000 gross income declines to 1.2%.

For every €10,000 above €30,000, a PAYE taxpayer pays an additional ~€4,000 in tax. There is no difference in the increased tax burden for every €10,000 between incomes of €30,000 and €120,000. There is a huge difference in gross income.

I don't know why your tax calculations on €30,000 and €40,000 differ from the above but I don't think that alters the point I am trying to make.

Incidentally, the best of luck for the safe arrival of Ms/Mr Jnr CM in the next week of so.

 

[ClubMan]

Re: Different definitions and interpretations of "rip-off"

I don't understand that. Is it relevant to incomes of €30,000+?

Yes - it's relevant to all incomes where PRSI is normally paid. The first €127 p.w. or €551 p.m. is exempt from PRSI (4%). After that PRSI (4%) and health levy (2%) is paid on all income up to the PRSI ceiling. Above that only the health levy is paid. However the effects of including this weekly/monthly exemption are probably marginal in the greater scheme of things.

I can't use Karl's calculator!

Does this note from Karl help at all?

14 Aug 05 - Some people from Ask About Money have reported a problem - an "!" is displayed when to click on the 'show' button. To fix this for the moment: if a %7e appears in the link change it to ~ as follows: [broken link removed]

The largest % increase in tax on gross income is between €30,000 and €40,000. That is the sole point I am trying to make.

That seems to be a fair point and maybe something that needs to be looked at (get ready for the annual AAM budget submission!). However this point does not support the suggestion that we pay high direct taxes which was suggested earlier on in the thread. Would you agree?

Thanks for the best wishes.

 

[balga]

No need to be (financially) nervous. This is an optional service in
Dublin. Although, my understanding, from speaking to a sibling, is that one normally pays a certain amount in WA. Apparently there is a very good at home midwifery programme which operates out of the NMH. It is currently available in only certain areas of Dublin, and involves no extra cost.

I included this recent and concrete example in the definitions thread on purpose. These payments qualify for inclusion in the MED 1.

All the best to you and yours.

 

[ClubMan]

balga - I presume that the post above was misplaced. If you can point to the thread where it should have gone please do and I'll move it to the correct location.

 

[sherib]

Originally posted by ClubMan
The first €127 p.w. or €551 p.m. is exempt from PRSI (4%). After that PRSI (4%) and health levy (2%) is paid on all income up to the PRSI ceiling.

I didn't know about that exemption. Does that mean that irrespective of gross income, the first €6,604 (€127x52) is exempt from PRSI? And, if so, the effective PRSI ceiling is €50,780 (€6,604+€44180)?

Originally posted by ClubMan
That seems to be a fair point and maybe something that needs to be looked at (get ready for the annual AAM budget submission!). However this point does not support the suggestion that we pay high direct taxes which was suggested earlier on in the thread. Would you agree?

I have to pack for my holiday so haven't enough time to consider that question. However, I don't like the term "rip-off" - it is too broad and too emotive. I do believe that 21% VAT is too high and VRT unfair and not in line with European directives. Nonetheless, there seems to be a culture among some people to charge whatever it is thought the customer will bear. I would call that sharp practice. There is the option of walking away but if an essential service is needed, the consumer has no choice but to pay. High prices, e.g. €5 for a pint in the Merrion are not rip-offs - just a long held practice of separating "them" from "us". I don't think that state controls should be introduced to counter that. The same applies to fancy restaurants.

Finally, while financial incentives have helped to grow our economy, increase employment etc, it has always been my view that the heavy hand of the state is remarkably efficient when it comes to people at the lower end of the scale as compared to those at the top end. By that I mean, people trying to return to work yet upon doing so loose their state benefits. At both ends of the economic scale there will always be those who know how to "work the system". It is not good for our society to see an ever increasing divide between the haves and the have nots. I also think that not enough is invested in education, especially at primary level, to ensure that the boats of all our citizens are lifted. I read a recent ERSI report which makes that point.
But then teachers have always been aware of this. There has been some improvement but not enough to make a large enough difference.

 

[ClubMan]

I didn't know about that exemption. Does that mean that irrespective of gross income, the first €6,604 (€127x52) is exempt from PRSI? And, if so, the effective PRSI ceiling is €50,780 (€6,604+€44180)?

The first €127 p.w. (if paid weekly) or €551 p.m. if paid monthly is exempt from PRSI. The PRSI ceiling is still €44,180. In effect this means 2% health levy only on €6,604 (or €6612 if paid monthly), 6% (PRSI + health levy) on the next €37,576 (or €37,568) and then 2% health levy only on the balance if applicable.

I do believe that 21% VAT is too high

Many essentials are 0% VAT rated and some items are charged at 13.5% (?).

Nonetheless, there seems to be a culture among some people to charge whatever it is thought the customer will bear. I would call that sharp practice.

I disagree - I call it business but competition and consumer discretion should ensure that intolerably high prices are not sustainable and create downward pressure on prices.

Finally, while financial incentives have helped to grow our economy, increase employment etc, it has always been my view that the heavy hand of the state is remarkably efficient when it comes to people at the lower end of the scale as compared to those at the top end. By that I mean, people trying to return to work yet upon doing so loose their state benefits. At both ends of the economic scale there will always be those who know how or "work the system". It is not good for our society to see an ever increasing divide between the haves and the have nots.

I'm not sure what specifically you are talking about here. Maybe you could give a few specific examples (after the holidays if necessary! )?

I also think that not enough is invested in education, especially at primary level, to ensure that the boats of all our citizens are lifted. I read a recent ERSI report which makes that point.
But then teachers have always been aware of this. There has been some improvement but not enough to make a large enough difference.

Many people who complain about lack of investment in education and public services are the same people who moan about benchmarking, negotiated payments for efficiency improvements and changes in work practices and the allegedly cushy number that public servants have. Seems like a bit of a contradiction in terms to me.

 

[markowitzman]

Balga
Give the obstretrician as much money as you can afford and if you can get the best one get them.........pay for quality ......dont let cost alone be your determining factor.........in a different sector I see from eddie hobbs website that a one hour consultation and report from eddie's people is 847euro vat inclusive.........much higher hourly rate than your obstetrician.............good luck to eddie........I think a lot of his work and he deserves what he gets as he provides a quality service to his clients.......my feeling is that the real point is that the real rip off in the country is POOR product/service at INFLATED price.........sadly this is becoming more prevalent.......but please remember price is not kingpin imho..........quality is! Pay for quality........if you get it great.......if not complain and vote with your feet.

 

[balga]

The post is fine where it is.

I'm afraid I wouldn't under any (currently imaginable) circumstances consider these payments as value for money. I won't bother with the complete details, however whilst attending my wife's labour (2003) in the delivery ward, a birth was taking place in the storeroom outside. The matron came in to tell me not to leave the delivery ward.

It was an interesting experience.

 

[markowitzman]

Dont get me started on the health service!.......reason for health waste of money is as simple as a complete overspend on the administration section resulting in underfunding for direct clinical care.............no politician apart from mary harney last xmas 12 months made an attempt to look for value for money from the admin section......suffice to say the unions had this shot down in 48 hours and we have heard nothing since!......in my view no more money should be thrown at health (and I work in the sector!!) until some politician sanctions a complete audit of the admin system (preferably privatise the lot of admin imho)..........but so many political appointees in the admin section of all health boards that this never will be done I fear!

 

[RainyDay]

in my view no more money should be thrown at health (and I work in the sector!!) until some politician sanctions a complete audit of the admin system

Sounds like a hugely expensive consultancy exercise which will result in yet another fat report to gather dust on a shelf.