Tag Archives: tax wedge

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….

taxwedge

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.

single2kidsbenefitscouple1earnnokidsbenefitscouple1earn2kidsbenefits

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.

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If Ireland was Greece…in tax terms anyhow

taxleftontableIreland has a tax problem.. If we were to collect tax at Greek levels, we would take in €8b extra. Greece,…Think about that for a little while and wonder how we could spend that on investment, debt paydown, and increased social services. The chart shows how much more we could raise in taxation if we were to levy tax at the rate of our compeers.

We don’t, really, as an economy pay as much as we should for the services we want. There, I said it. In 2012 we collected 28.7% of GDP in tax. The EU average is closer to 40%. Taxing at the EU average we could have nearly €18b more pa to deploy, taxing at Danish levels nearly €32b. The next time a politician says we dont have resources to prosecute white collar crime, to treat sick children decently, show them the graph here.  Continue reading