Something that I see many people here complain about is Irish Income Tax and how little people on lower incomes pay compared to middle or higher income earners and how the money those in the middle to higher income bracket pay then goes to social services that they are means tested out of.
[Even the Irish Tax Institute agrees.](https://www.independent.ie/business/personal-finance/call-for-more-people-to-pay-income-tax-to-reduce-burden-on-middle-and-higher-earners/38511289.html) You can probably also find other articles and organisations making the same argument.
[Middle Income earners in Ireland also pay more than their Swedish counterparts.](https://fora.ie/how-much-taxes-paid-ireland-2988103-Sep2016/) Even if Sweden has been a beacon of social democracy many here want to emulate.
I would be in favour of widening the tax base, mainly because it’s not good for the tax system to rely on about <20% of workers to pay for a majority of a nations tax and we’ll also have to deal with an ageing population, with increased healthcare and welfare needs.
However, I know there are plenty of people here who are on lower incomes and/or more left-leaning who don’t want to see them being taxed more. I also know that many people here are struggling with the CoL (Cost of Living), and the last thing they want to see is their taxation increase.
I’d like to hear your thoughts.
33 comments
> Even the Irish Tax Institute agrees.
They’re the Certified Tax Accountants guys rather than something relevant like a government body with responsibility for advising on the setting of tax rates… so I find the phrasing “even the Irish Tax Institute agrees” very leading.
Like, who do you think the customers for Tax Accountants are?
Right now you can be considered a high earner taxed at the 48% bracket, but still be eligible for the social housing list. That tells you everything you need to know about inaction on housing and lack of movement of tax brackets with inflation.
The biggest challenge facing all western countries is a decreasing proportion of workers relative to the non-working population. This is mostly inevitable due to a demographic shift due to an aging population, but we have a huge portion of society who don’t work despite being of working age and having no disabilities that prevent them from working.
The first thing to do would be a proper analysis of the true unemployment rate. Long term unemployed are not included in the monthly figures. We should identify people who have not worked in 3+ years, and come up with some mechanism through which they can positively contribute to the economy.
Secondly, we need to even the playing field between regular citizens investing/saving and institutional investors. Our CGT allowance is set at €1,270 as it was £1,000 before we switched to euro – that tells you how outdated it is. We need to revise tax treatment of ETFs, which are currently taxed at 40%+ every 8 years. Something like the UK’s ISA would be perfect. It would steer people away from property as an investment, alleviating the housing crisis.
Third priority for me would be legalisation of drugs. It saves us money on the courts system, free legal aid, prison costs, policing costs, all while generating employment and tax income for the state.
With these measures in place, we should simultaneously have reduced spending and increased the tax take, only then could you look at serious changes to income tax rates, prioritising a shift of the marginal rate or creating a 30% bracket around median income levels.
It’s worth mentioning that some positive steps have been taken recently – Employer PRSA contributions are no longer taxed at any level, meaning the pension burden should be reduced.
I’d have no problem with widening it but truthfully we’ve a serious issue still with people who simply refuse to work.
Anyone caring, sick, disabled or old 100 percent deserves to be supported by anyway possible which in this case is tax. I for one like the fact my tax goes to those cause one I’ll either be sick or hopefully not sick but old and will be in need of some (well i do have a good pension policy tbf).
The issue is the fact that low earners as in bottom rung get shafted by missing out on lots of benefits and therfore the incentive is not to work creating a system there to be abused.
If you don’t work simply because you don’t have a job you should have benefits gradually stripped. On top of that anyone receiving social that falls into the ones abusing the system should be made work in communities. Plenty of streets and building could be cleaned and painted. At least make them work for it and then they may be swayed to try earn more by taking a low paying job.
Rant over sorry
Edit: some people are missing my point regardless of how many people are abusing the sysyem talking about tax brackets and widening them this is a factor. If you hit lower income earners then they will simply choose not to work as its more financially beneficial. In talking about the topic the OP posted this is certainly relevant.
Someone else replied but looks to have been removed. I didn’t say the scammers are the result of high taxes…I said the lower income people paying high taxes stops the people close to it from working as there’s no incentive. I think I’m seeing what people mean about bullies on here. Get a grip lads. One person offended and probably went off and asked all his mates to downvote and argue mute points. Still waiting for a decent reply to my comment where someone actually reads what I said.
Listening to people talking about widening the tax base over many years, it seems to be a term that means different things to different people. Everyone thinks that the tax base should be widened, but everyone also has different ideas about who should pay more tax, what specifically should be taxed more, and how the tax should be structured. While OP wants to tax low earners more, there are others who want to tax property, or home ownership, or corporate profits or introduce new service charges or any other number of other schemes with different targets.
On OP’s proposal for more income tax on low earners, the current arrangements are as they are because the distribution of income pre-tax-and-benefits in Ireland is one of the most unequal in the developed world. Low direct taxes and generous benefits for those on low incomes are designed to offset this, and are successful in making the distribution of income after-tax-and-benefits among the more equal in the developed world. This is a hugely positive outcome, and if it is not to be achieved in part through the income tax system it needs to be achieved some in some other way. Personally, I would prefer to do it through a stonking big increase in the minimum wage introduced over a period of about 5 years, accompanied by other measures to tackle low pay at source. So, subject to first tackling our extreme inequalities in pre-tax pay I am all in favour of widening the tax base by increasing income tax on lower paid people.
Problem statement: the middle income earners pay more than in other countries, I would even imply they pay too much.
Proposed solution: have the low income earners pay more.
Question: how does that reduce the taxes of the middle income earners?
Yes every worker should pay some form of income tax. But it can’t be done without a full overhaul of numerous other areas when it comes to wages, taxation and unemployment benefits.
Minimum wage needs to rise at least 30% for any worker aged 23 or above. This age group must have a ‘living wage’ as the minimum level of pay. 16-22 year olds can continue on a lower level of minimum wage for entry level / part time jobs.
Unemployment benefits are too high in relation to a minimum wage paycheck. They need to be cut or overhauled. I would scrap unemplyment benefits and replace them with a universal employment scheme of equal or higher value payable at the living wage per hour worked. I.E someone who find themselves unemployed can work for 15 hours per week on community focused projects. Street cleaning, graffiti removal, public spaces maintenance, litter collection etc. It will work out at 2 days per week worked and the can spend the rest of the time searching for a permanent job.
Tax system in general needs to be overhauled to make it pay to work. I personally think receiving less payment than you pay in tax for any time worked is immoral. Upper tax rate should be reduced to a maximum of 45% and should kick in at a much higher level (at least €75k+). A third rate of tax should come in between €25k and €75k
Urban areas should have a higher minimum wage/living wage level.
I make give or take, it works out, with expenses at about 140,000 a year and I pay 30.3 percent tax on that so it’s about a net 100,000. And out of that 100k I run a home in Dublin, Castlebar and Brussels.
If you tax low income workers more then they will need to be paid more. It is tight out there and plenty of working people are finding it hard. Maybe they are working full time low paid jobs, or part time for medium paid jobs. There are an increasing number of working poor. Absolutely widen the tax base, but make it so lower income working poor get more.
What we need is to start taxing the mega-corporations that have artificially inflated our GDP since arriving here.
The ones with the most money are paying the lowest percentage.
We have to get more diversified in our tax income. We’re too reliant on corporation tax from MNCs. There has to be some sort of lobbying by the few corporations we are heavily reliant on for taxes, lobbying that probably isn’t in the best interest of the state. Don’t get me wrong, I detest the idea of Ireland becoming more capitalist and materialistic, but IMO that boat has sailed long ago. We’re an advanced small open economy with a lot of social issues like healthcare, housing and being susceptible to inflationary pressures from global trade. We need to adopt a Nordic model.
My thoughts are you have worms wriggling around in your brains
No.
I’d be in favour of stopping giving contracts to speculators government pals and others to generate profit off of essential services.
The issue with tax in Ireland is not how much we collect but how it is spent.
Take from the poor, give to the not-rich, eh?
Aren’t they running a surplus at the moment? Why would widening the tax base (in the way described, by increasing taxes on the low end) be necessary?
If we’re going to widen the bracket it should be at the top. Currently the middle and high earners are getting absolutely rinsed for tax but once you start getting into earning millions then the rate drops off a cliff due to complicated tax avoidance schemes and loopholes. If we’re talking about ‘fairness’ and relieving pressure on workers, then we should be agressively going after those people who rise above the upper tax bracket and start to take most of their earnings via ownership of assets and not income.
So the reason we’ve got such a narrow tax vase is because market income inequality (that’s income inequality before tax and welfare kick in) is really really high in Ireland.
Our tax and welfare system does a lot of work just papering over those cracks.
If you widen the tax base you undo that more or less.
Long term, we need to find a way to address that market income inequality. If we managed this it would also in theory unlock a lot of other resources that are currently going to just keeping everyone at par.
I’d be in favour of reducing government spending and reducing taxes overall. The amount of waste in the government is absolutely ridiculous and the money would be better off in workers pockets to improve their lives. This idea that we need to give the government MORE money when they’ve shown time after time that they’re ineffective and produce piss poor public services.
People who complain about lower taxes for those on lower wages should thank themselves lucky they’re on higher wages and fuck all the way off. The entitlement is off the fuckin charts. We should be increasing taxes on the rich. Who do you think runs this country? JFC
Taxing low income earners is probably the most stupid, paint by numbers solution to widening the tax base. These people earn very little, so how is pushing them further down going to solve anything? It will only lead to an even greater reliance of public services to keep them afloat, thus necessitating more funding, thus cancelling out any additional IT collected from them.
The thing about the Irish IT system is that it actually works exceptionally well from an equality point of view – Irish incomes are amongst the most unequal in Europe, however, after everything has washed through the tax system Irish income inequality is roughly at par by European standards. What this means is that our tax system is extremely effective at redistributing wealth to combat inequality, and that is fundamental for a stable society.
I don’t think increasing taxes on the working poor is politically possible, or a good idea. The tax system should incentivise work.
If we want to increase tax take we should do it by increasing property tax. Existing rates + 1% on the proportion above €1m, 2% above €2m.
This would increase tax, affect a fairly small group of people. And you can’t avoid property taxes.
My personal issue is that every week the taxman comes and takes a massive chunk of my pay, and I have no clue where it’s going in terms of social spending, but I see TDs give themselves pay increases.
What I want to know is, would we need to pay this much tax, if the tax money we all pay already was spent efficiently and transparently
I see we are seeing the usual shite answers, everytime a question about high taxes is asked. Make people on the dole do community work. The correct answer is make the rich pay their share
The bands should increase at the percentage minimum wage, state pensions or social welfare payments are increased (let’s say, whichever is higher).
i would rather have them stop collecting tax for a year or do a 50% discount, so much surplus can’t even provide better infrastructure, transportation, and proper healthcare.
I’d like to see a flat tax on the first ~40k introduced alongside an “adult benefit” instead of tax credits. The dole would then be reduced by an amount corresponding to adult benefit.
Like you earn €40k, you pay €10k in tax and you get a stipend from the government of €5k. Rough numbers.
Earn 28k, 5k in stipend, 7k in tax etc.
As part of that make it really simple and easy to pay tax on anyone you employ – cleaners, childminders, gardeners etc. and attach some benefit to it.
Yes but we have the problem of how unequal pay is here low incomes are actually very low and those people can’t really afford a tax raise. We should look to start taxing lower earners even if just to stop the snobs looking down at low earners.
We have had the aim of increasing job numbers here instead of trying to raise the incomes of the lowest earners. We have very low unemployment and high immigration to fill the high number of jobs being created. If we were to introduce a tax on low earners we would have to reorientate our economic policies a bit. This can be messy and carries some risks I doubt government has the appetite for it and it’s more likely they’ll fly this kite every now and again because it’s popular with middle and higher income earners.
I would prefer a land value tax before taxing lower earners. It’s been recommended since the 70s and would help ease some problems around property prices. A rezoning tax wouldn’t go astray either as there is serious moral hazard around land tripling or quadrupling in value due to being rezoned.
Tax is tricky because whatever you do to widen the tax base you’ll make a large group of people unhappy.
As a middle income earner who feels that I pay too much in tax, I strongly believe that burden should be lifted by higher earners paying more rather than utterly fleecing people who are already struggling to make ends meet.
The point of the social services we pay for is to help those who need it. Bunty there nipping down to the farmers market in her Range Rover doesn’t need a childrens’ allowance to make ends meet, or HAP to cover her and Brian’s 6br place in Greystones.
I’d be more in favour of increased minimum wage. Widening the tax base by increasing people’s earnings. We have one of the more progressive taxation set ups globally from an income tax point of view.
(I’m not a minimum wage worker, I just feel they’re getting a raw deal)
Widen the tax bands at the top. The people at bottom don’t need more tax, and we don’t need their tax. But the people on top rate, over 40k, do need a break and we don’t need their tax. Stick the top rate to 50. Give the middle a break.
Get rid of the USC firstly.
I would be more be favour in tandem I want the government to borrow huge amounts of money to build infrastructure and public service that would make life easier for everyone.
>the money those in the middle to higher income bracket pay then goes to social services that they are means tested out of.
That’s sort of the point of tax, isn’t it? It’s a bit weird when people complain about their taxes going to something they don’t use. It’s not pay as you go like.
So when you say widening the tax base, you mean creating more avenues for us to be taxed in our daily lives?
Ultimately all that will mean is that we will be taxed more. It may start out that they spread the load a bit more, or have an emergency tax which we are promised won’t be forever (USC anybody??).
​
In my view there should be a higher tax bracket on income for anybody earning >200k.
I don’t agree with wealth/property taxes as that is taxing on money that was already taxed. Only taxes should be on newly acquired income.
​
and , i think we should be taxing companies higher than they are for corporate taxes. 15-20% would be reasonable imo. I don’t see it costing a lot of jobs. I mean if you think about it, workers do all the work. get taxed at 20-52%, but the company who takes the profit (which is generally more than what is paid to workers in MNCs) are currently taxed at 12.5%?
“Widening the tax base” is just a slogan. It would need to be turned into a concrete proposal before anyone can say yes or no.