Brendan Burgess
Founder
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Interesting data from publicpolicy.ie
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we spend about 4 per cent of GDP on public pensions compared to an EU average of 9 per cent and 14 per cent in Greece. This relatively favourable position will change. The ageing of the population puts upward pressure on public spending and hence on the level of taxation required to pay for it. The cost of the state pension in Ireland is increasing by about €200 million a year as more and more people qualify for the State pension. Therefore, promises to reduce the overall level of taxation should be examined carefully.
the tax paid by a single person on half average earnings is the second lowest in the OECD (out of 34 countries) and is about one-tenth that in Denmark while the tax paid by a single person on two and a half times average earnings is the 7th highest in the OECD.
People in the top decile pay 30 per cent of their gross income in direct tax1 so their disposable income is 70 % of their gross income. Since VAT paid is related to expenditure, a proportional VAT will by definition be regressive as a percentage of income. This impact is mitigated in Ireland (uniquely in the EU with the exception of Malta and the UK) where food which accounts for a sizeable part of the expenditure of low income people is zero rated for VAT. For example, Finland charges 14 % and Denmark charges 25 % on food – so our VAT system is more progressive than other countries.
[broken link removed]
we spend about 4 per cent of GDP on public pensions compared to an EU average of 9 per cent and 14 per cent in Greece. This relatively favourable position will change. The ageing of the population puts upward pressure on public spending and hence on the level of taxation required to pay for it. The cost of the state pension in Ireland is increasing by about €200 million a year as more and more people qualify for the State pension. Therefore, promises to reduce the overall level of taxation should be examined carefully.
the tax paid by a single person on half average earnings is the second lowest in the OECD (out of 34 countries) and is about one-tenth that in Denmark while the tax paid by a single person on two and a half times average earnings is the 7th highest in the OECD.
People in the top decile pay 30 per cent of their gross income in direct tax1 so their disposable income is 70 % of their gross income. Since VAT paid is related to expenditure, a proportional VAT will by definition be regressive as a percentage of income. This impact is mitigated in Ireland (uniquely in the EU with the exception of Malta and the UK) where food which accounts for a sizeable part of the expenditure of low income people is zero rated for VAT. For example, Finland charges 14 % and Denmark charges 25 % on food – so our VAT system is more progressive than other countries.