Comments on: A little quiz on Ireland’s income tax

By: Ronan Lyons

Ronan Lyons — Thu, 10 Dec 2009 19:22:48 +0000

@anonymoussquirrel
Let’s assume for the moment that you’re not married, so that we can get your effective tax rate up as high as it can go.
The first €36,400 of your income is taxed at 20%, so that’s €7,280 on to your tax bill. From this we have to subtract €1,830 in tax credits and another €1,830 in PAYE credits, so your tax bill so far is €3,620, or just a rate of under 10%. For your overall effective rate to be 27%, the government would need to be taxing you 71% of your remaining €11,600, which they’re clearly not.

In fact, they’re taxing you 41% on that last quarter of your income, which means your effective income tax rate is 17%, not 27%. As is outlined in the post, the latest figures we have are pre-income levy, so you can add on another 1% – that brings you up to 18%. (If you’re married, your rate will be even lower.)

Thanks for the comment and for giving me the opportunity to explain the breakdown in a little more detail,
R

By: anonymoussquirrel

anonymoussquirrel — Thu, 10 Dec 2009 16:34:42 +0000

I don’t know where you and Revenue Commissioners get you’re data from I earn 47k and pay 27% in real incom taxes

By: Five things to remember when judging Budget 2010 | Ronan Lyons

Five things to remember when judging Budget 2010 | Ronan Lyons — Thu, 10 Dec 2009 13:32:18 +0000

[...] 5. The structure of the taxation system is also important. No-one is arguing that we can, let alone should, return to 2006 when stamp duties and capital taxes provided 16% of our revenues, but there is a danger in over-reliance on income taxes, which seems to be the only lever under discussion. Income taxes typically have provided about 30% of the Government’s tax revenues. Next year, they will provide much closer to 40% (actually 37.5%). In absolute terms, the picture is not as alarming. The Government expects to take in €12bn in income tax next year, compared to €11.4bn in 2005. However, the income tax system is incredibly over-reliant on those with high incomes, while two thirds of earners paying hardly anything in tax. [...]

By: Liam Griffin

Liam Griffin — Tue, 17 Nov 2009 11:50:38 +0000

Hi Ronan
I rolled along with the common perceptions even though I pay damn all tax myself.I thought I was being smart claiming all the right allowences.It appears my friends and neighbours have been missrepresenting their own tax liabilities

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By: The Irish Economy » Blog Archive » Limited Gains from Taxing the Rich

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