Taxes – You are Here (and its not where you think)

So the general elauction is in full swing. And the theme of GE2016 is “Irish taxpayers are uniquely, punitively, outrageously taxed, and thats causing all our trouble:. Pretty much every party, bar the courageous (in a Sir Humphrey Appleby way) Social Democrats are pledging to cut, slash, reduce….

Meanwhile, away from the fevered fantasies of Irish political parties, in the real world, this is where we are. Data from OECD Taxing Wages 2015, 2014 data : here

First, the total : the tax wedge, defined as  the difference between total costs to the employer (so including PRSI and other social security) vs what the employee gets (so including USC and PRSI). Oh, look….


Then tax on the average wage (a shade under €700 per week for 2014 from CSO data) by family type. Cash transfers here are the standard benefit packages such as childrens allowance or its equivalent.


Finally at different percentages of the average wage. Ireland is in red.

Screenshot 2016-01-31 08.51.57


Feeling overtaxed is fine. Claiming that we are, at least in the comparative sense, is not. Its not just a misreading, its a misrepresentation. We get the politicians we elect. If we elect people who look us in the eye and lie a hole in a pot, so be it.


5 thoughts on “Taxes – You are Here (and its not where you think)

  1. Pat Donnelly

    Brian. This is becoming a rant. My point to you again is that looking at what we are taxed is looking at only half the equation. We get very little for the taxes we are paid. In fact I’d say we are short changed by government. I am ‘obliged’ to pay for Health Insurance, private schools fees, university fees because I lack confidence in that provided by the state and that’s before I pay secondary taxes for car, property etc. Please look at the total picture and not the half that is sensational. By the way an awful lot of people must pay no tax whatsoever as I pay 32% of my salary.

  2. bossbutteringbee

    Pat has nailed it.
    The top two earning deciles of the Irish population pays almost all nett tax yet receive negligible state services in return. Most high cost state services (e.g. education, health and social welfare) in Ireland as in other Anglo states are designed to deliver only a triage level of service so as to repel those who can afford options, deepening the divide between service funders and service consumers.
    Pat highlights the high level of secondary (stealth) taxation in the Irish state which has swollen in recent years via a conveyer belt of new levies and levy increases on just about every product or service whether or not it involves the state. Consider also the fact that Ireland has no significant defence budget and (as an ex-colony) a relatively small spend on international affairs and a negligible refugee burden.
    The reality is that Ireland is and has always been an unstable platform on which to grow the sustainable private sector business ‘wedge’ needed to generate national wealth and well-being. Public v private sector employment apartheid is only gradually being resolved. The entire economy is distorted to entice and retain insubstantial employment and income tax flows based on MNC tax arbitrage and IP administration to the detriment of the indigenous small business sector which is crowded-out, undervalued, and struggles to scale.
    While Deng Xiaoping declared that to “get rich is glorious…” any apparent ambition in Ireland to generate significant wealth typically results in targeting by Revenue, political parties and others. In the face of this, far too many wealth creators with ambition either emigrate, invest in political protection, or carefully avoid the risk of placing critical physical assets within the jurisdiction.
    Statistics for establishment and growth of businesses of scale in Ireland are far below the EU average. This is one rarely acknowledged root problem with Irish society, and I am sure it is one reason for its highly-politicised social and economic structures, for the survival of an ineffective and self-serving legal system, and for the relatively high level of organised criminal and illegal business activity that operates in the state with impunity.
    In summary, to look at payroll taxes in isolation, and to compare life as a salaryman/sole trader/businessman in Ireland with other states is simplistic in the extreme.
    A parting statistic. ‘Developed world’ economies with stagnant growth typically have a total slice of GDP requisitioned and spent by their public sectors in excess of 48% or so. This is inclusive of direct and indirect (stealth) taxation. The equivalent slice of GDP for those national economies that still have a significant growth trend is closer to 35%. After netting off for distortion of its GDP statistics, reliance on the UK for defence budgeting and inclusion of provisions for absent state services in areas such as health and childcare, the Irish state appears to snaffle in excess of 50% of adjusted GDP. No wonder yet it has been incapable of providing a stable economic platform for its citizens.

  3. mike flannelly

    One earner couple with two children.
    Are we back in the 50’s ?

    What is the average cost of a home for this group? 3,5 times 35,000 would be 122,500 euro when the are trying to tell us that it costs 400,000 to build a one bed apt in Dublin.

    How much does a couple with two kids earning a joint income of 70,000 take home.
    48,000 euro ?

  4. mike flannelly

    How much tax does an Irish couple with two children and a joint income of 70,000 pay. This group have a 200,000 mortgage on a 240,000 home. They pay 4,000 more per year on their mortgage for the IRISH blank cheque variable rate mortgage. The failed Irish bankers tax.

    Straight question. Please answer it.
    They take home 48,000 before the Irish failed bankers tax.


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