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

By: Mike C

Mike C — Wed, 11 Jan 2012 18:13:01 +0000

Much food for thought in your analysis Ronan. While I understand your point about PRSI,it is involuntary and based on income and feels very much like a tax unless one claims benefits (dental, maternity, etc.)

@DMC – Ronan’s sums look fine to me: you need to distinguish between allowances and tax credits: the latter are credits against tax on income and are deducted from the notional tax liability as shown in Ronan’s calculations i.e the sum is (36,400*20%)-3660 = 3620.

By: DMC

DMC — Tue, 10 Jan 2012 14:06:55 +0000

Hi Ronan,

Interesting analysis. I refer to your post to anonymoussquirrel, your figures seem wrong unless I’m missing something fundamental.

36,400 – 3660 = 32740 @ 20% = 6548 and not the 3620 you mentioned so your circa10% is actually more like circa17% before factoring in your last quarter 11,600 @ 41% and also you haven’t factored in PRSI and or USC. Hmmmmmmmmm.

By: michael

michael — Wed, 21 Dec 2011 15:21:15 +0000

You are correct I was being a bit diningenuous, you see I am fed up of hearing economists and politicians on about the comparitively low tax we pay when in fact the opposite is true. Whats the pont in talking about income tax and not looking at spending tax, if you do its only maths and means nothing.However You will find one of these politicians using your figures to suit their own ends next when they lie!

By: Ronan Lyons

Ronan Lyons — Tue, 20 Dec 2011 12:13:54 +0000

Hi Michael,
I fear you are being a bit disingenuous. The post is explicitly about income tax (direct income tax), not services such as insurance (PRSI) or compensating your fellow citizens for the costs you impose on them (car and fuel duties). As you are self-employed, you may also enjoy a wide range of benefits that other workers don’t, such as your company owning various assets of which you have exclusive use (saving you VAT) or paying for your expenses (thus the cost comes out of your gross salary, not your net salary).
Thanks for your comment, though.
R

By: michael

michael — Fri, 16 Dec 2011 16:57:15 +0000

Your figures are hard to understand. I am self employed and earning about 85k, I have calculated that I have paid 63% tax and thats just at a cursory glance at wages and spending, I am certain it would be higher if I really got into it.
I included
income tax,PRSI,Levy’s,second home, VAT, Car Duty,Tax on fuel only !!

By: Phiz Hicks

Phiz Hicks — Fri, 09 Dec 2011 12:27:58 +0000

So these revenue figures capture the total income of everyone in Ireland, from the beggars on O’Connell Street to Denis O’Brien? I reckon they’re just a “garbage in, garbage out” statistic. You lot might be good at economics but that’s like being good at astrology.

By: Ronan Lyons

Ronan Lyons — Fri, 09 Dec 2011 08:51:04 +0000

@Fergaloh
While the comparison does not account for the extent of public services and the cost of living, I would make the following two points:
(a) comparisons of the cost of living do suggest that Ireland is about 10-15% more expensive, but this is more than compensated by the tax differential
(b) the extent of public services in Ireland generally compares more favourably than most people in Ireland think [Ireland's health service for example is in line with the EU median] – if people want even better public services, they will have to pay more in tax

While I appreciate you taking the time to comment, I avoid personalising comments myself and like those commenting here to try and do the same – you have no idea how much or little I earn [I earn nothing from this blog, for example, but it does cost me time and money].

Thanks,

Ronan.

By: fergaloh

fergaloh — Fri, 09 Dec 2011 08:32:17 +0000

Quick example of relative costs –
Luxembourg, a monthly bus pass for the city costs EUR 22.5, a national bus pass costs EUR 45

Dublin Bus monthly bus ramble pass costs EUR 110

By: fergaloh

fergaloh — Fri, 09 Dec 2011 08:19:27 +0000

Ronan, I suggest you live on 25k for a while and then get excited about your low rate of tax.
Making flat comparisons with other states ignores relative costs of living.

By: Should we let Michael O’Leary run our income tax system? - Public Policy Advisors Network

Wed, 07 Sep 2011 09:31:44 +0000

[...] would be a big culture shock for the vast majority of earners. Two years ago, I wrote about how the median earner in the country in 2006, earning €25,000, paid just 4% in income tax, compared to 20% in most other developed countries. By 2008, the median earner was taking home [...]