What taxes do low earners and middle earners pay in Ireland?

TheBigShort said:
Todays budget must be hurting you so. More transfers for welfare recipients and pensions and childcare. Only a token cut in USC.
What hope do the top 20% have now? How will they cope with only 50% of the income between them?
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Yep, another populist budget which narrowed the tax base, will feed an overheating property market, increased welfare to the richest demographic in the country and increased spending in a country which will borrow a further €600 for every man woman and child in the country this year... back to Bertie-nomics... you must be thrilled!
 

Not really, I agree with a lot of what you said. I would have left welfare rates alone, along with pensions. I think the child care support is a good thing, but thats about it. Cutting the USC was mere tinkering and would have been better to leave it alone.
I agree with you on the intervention in the property market. I do think it is already in bubble territory, in Dublin anyway, and that prices need to fall to what they are really worth.
I would have liked to see more for capital infrastructure investments. Most of what was announced was simply reaffirming what is already in train.
Thankfully, they didnt increase taxes on low income earners to facilitate tax breaks for higher earners.
 
Brendan Burgess said:
Conclusions

  • We have low tax rates on low and average earners who are single
  • Despite having lower taxes, we have much higher social welfare
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I’m amazed that nobody has pointed out just how spurious this juxtaposition (“despite having…”) actually is: the two are not connected. You may as well say “The VAT rate on fish tanks in country A is lower than country B, yet country A spends three times as much on paperclips!!!”. You are comparing one element of taxation in one country with one element of expenditure. People may get higher social welfare (really?) than in the UK, but they don’t get a national health service, nor do they benefit from free education that is actually free.

It’s essentially taking some fairly random pieces of information to make an ideological point.

One explanation for the higher social welfare rates might just be so people can afford to pay the assorted other charges they are faced with without actually starving.

If you want to reduce the burden on that famous squeezed middle, I’d suggest it’s more fruitful going after those with the funds rather than those without.
 
newtothis said:
I’m amazed that nobody has pointed out just how spurious this juxtaposition (“despite having…”) actually is: the two are not connected.
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They are very much connected.

One is a payment of money from citizens to the state. The other is a payment from the state to citizens.
In particular, some of that money, PRSI, goes into a Social Insurance Fund which pays out the welfare.
One would expect high social welfare in high tax countries and low social welfare in low tax countries.
In Ireland we have high social welfare and low tax. And this is funded by taxes on the higher paid, artificially high corporation tax receipts and borrowing.

Brendan
 
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This simply isn't true. The connection is illusory: it would only be true if particular sources of tax were used to fund particular programs of expenditure (e.g. income tax funding social welfare, as you are trying to imply). This isn't the case: there's just one big pot tax flows into and funding out of. It’s not even the case for things like car tax; if motoring taxes were all spent on road infrastructure, we’d probably have the best roads in the world.

You could equally ponder why direct supports to business are high, when corporate tax rates are low, but presumably that doesn’t fit the agenda.
 
So you are saying there should be no link between Pay Related Social Insurance and Welfare.
 
Purple said:
So you are saying there should be no link between Pay Related Social Insurance and Welfare.
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Where did I say or imply that? I'm simply pointing out the fact of how government income and expenditure works, not commenting on whether it is correct or not.
 
newtothis said:
Where did I say or imply that? I'm simply pointing out the fact of how government income and expenditure works, not commenting on whether it is correct or not.
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You implied it when you pointed out how government income and expenditure works and in the comparison you made.

By the way, direct supports to business are tiny in this country. They are much better in the UK and Northern Ireland in particular.
 
Purple said:
You implied it when you pointed out how government income and expenditure works and in the comparison you made.

By the way, direct supports to business are tiny in this country. They are much better in the UK and Northern Ireland in particular.
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Eh? All I did was point out there is no link between items of income and expenditure. You magically translated this into me saying that I thought there should be no link.

As for direct supports to business, I suggest you take a look at the Enterprise Ireland Web site (in a country with a corporate tax rate of 12.5%) and show it to someone from the USA (federal corporate tax rate of between 15% and 39%) and see what they think. Following Mr. Burgess’s logic, it is shocking that we provide so much assistance to business in comparison to the USA when the corporate tax rate is so much lower. Before you start quoting tax rates and other measures at me I don’t actually agree with the comparison: I’m just using it as an illustration of the absurdity of the original argument.
 

SME's, the businesses who employ most people, make very little profit. The rate at which it is taxes is not that important. Our effective tax rate is about average by European standards.
I know the EI website very well. I know how little support we get relative to our UK counterparts. The downside of our love-in with US MNC's.
 

All points which re-enforce my argument: the spuriousness of both examples.

Example 1: taxes on income and social welfare rate comparison between two countries, Ireland and the UK. According to Mr. Burgess the validity of this is based on “One is a payment of money from citizens to the state. The other is a payment from the state to citizens.”

Example 2: government supports for business and corporate tax rate comparison between two countries, Ireland and the USA. I can point out that “One includes payments from the state to companies (either direct or through subsidised services). The other is a payment from companies to the state.”

The logic of the two examples is exactly the same: a complete nonsense.

You may well find other countries with better business supports (what we have here would be seen as inconceivable in the USA), but equally you can probably find another country as a counter example to example 1.
 

To be fair your comment came across as such. Mainly because you didn't distinguish between the two points he made in his post (i) low tax should = low benefits / high tax should = high benefits, and (ii) PRSI funds Social Welfare.

Your point on the fungability of taxes is correct though. While taxes are introduced or increased to fund specific budget items, in practice everything gets lumped in together at the end of the day.
 
According to Revenue statistics for 2014, only 18.18% of taxpayers paid tax at the higher rate.

Total income tax payers 2,224,048
Exempt 857394 38.55%
Marginal Relief 24796 1.11%
Standard Rate 937419 42.15%
Higher Rate 404439 18.18%
 
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