This post outlines some key considerations in Ireland’s Budget 2010, including the scale of the challenge the government faces, the imperative to cut spending, the growing role of national debt, capital expenditure and over-reliance on income taxes. It also makes some recommendations for measures in relation to tax credits, property tax and VAT.
Last week, over 200 people filled out a simple quiz on Ireland’s tax system. The results are revealing. As one might expect, people think the system is far less progressive than it actually is and that the typical worker is paying a significant amount more in tax than they actually are. Perhaps the more surprising result is the broad consensus across all groupings about what the tax burden on typical workers should be: 23%, rather than the current 4%.
Income tax will form more than one third of Ireland’s tax take in 2009. Yet, if the wild claims about who does or doesn’t pay what are anything to go by, the nature of Ireland’s income tax regime is poorly understood. This post includes a little quiz to see whether some key aspects of Ireland system are understood and where readers think the system should be. It also outlines some startling findings in relation to income tax, but don’t forget to answer the questions before you read the findings!
S&P has downgraded Ireland’s debt rating – again – while latest Government figures show that Ireland faces a €12bn hole in its tax revenues this year, compared to 2007. This post outlines where the hole has come from and how it can be tackled. This will require an open debate, though, which will involve sacred cows such as Ireland’s corporate tax rate and a property tax.
Ireland's €12bn tax hole in 2009, by taxation type
An overview of how much the typical worker is taxed in Ireland, compared to the rest of the OECD, reveals Irish workers to have a significantly lower tax burden than the OECD peers. The trend of lower and lower since 2000, so that the average industrial worker was actually subsidised in 2007, now appears not only unsustainable but also reckless.
