would love to hear you both debates the pros/cons of reforming tax system for better economic sustainability - how progressive is too progressive; is lifting people out of the tax net always a good thing - and how do we stack up for the diversification of our tax base; income seems skewed towards ever higher earners when corporate is kept low strategically, property seems low and has been frozen for ages, water/rates etc seem impossible to bring in, VAT seems messy and always getting trimmed etc etc
Ireland may have a progressive income tax system but however that only accounts for Income tax, however the majority of the tax paid by people on lower incomes are consumption taxes not income tax.
In fact according to the Nevin institute the bottom 10 per cent of people pay nearly 30 per cent of their incomes in indirect taxes . Consumption taxes and other indirect taxes in Ireland are in general much higher in Ireland than in the Europe and the rest of the OECD it is therefore wrong to suggest that Ireland has the most progressive tax system by just looking at taxes on income alone.
When you add indirect taxes back in the mix the top 10 per cent of households pay 29 per cent of their incomes whereas 10 per cent pay 28 per cent - roughly the same amount
Also regarding the Irish income disparity if we look at pre tax and transfer income inequality. Ireland is almost the worst in the OECD. We need to have a the worlds most progressive income tax system because we have the most (pre tax) income inequality. I fear what the country would look like if we had UK style tax rates with Irish style (pre tax) income inequality.
Also also regarding your comment saying what would happen to the economy if the Irish tax system were to become more progressive. Well not much will happen at all according to the data
An analysis by Gravelle and Marples (2011) of top tax rate changes since World War II show that higher rates have no statistically significant impact on factors driving economic growth—private saving, investment levels, labor participation rates, and labor productivity—nor on overall economic growth rates. There are numerous study's that find no statistical relationship between the tax on high earners and economic growth.
would love to hear you both debates the pros/cons of reforming tax system for better economic sustainability - how progressive is too progressive; is lifting people out of the tax net always a good thing - and how do we stack up for the diversification of our tax base; income seems skewed towards ever higher earners when corporate is kept low strategically, property seems low and has been frozen for ages, water/rates etc seem impossible to bring in, VAT seems messy and always getting trimmed etc etc
It’s a brilliant suggestion - thanks, it is very much appreciated. We will definitely dedicate a podcast to this. Watch this space!
Ireland may have a progressive income tax system but however that only accounts for Income tax, however the majority of the tax paid by people on lower incomes are consumption taxes not income tax.
In fact according to the Nevin institute the bottom 10 per cent of people pay nearly 30 per cent of their incomes in indirect taxes . Consumption taxes and other indirect taxes in Ireland are in general much higher in Ireland than in the Europe and the rest of the OECD it is therefore wrong to suggest that Ireland has the most progressive tax system by just looking at taxes on income alone.
When you add indirect taxes back in the mix the top 10 per cent of households pay 29 per cent of their incomes whereas 10 per cent pay 28 per cent - roughly the same amount
Also regarding the Irish income disparity if we look at pre tax and transfer income inequality. Ireland is almost the worst in the OECD. We need to have a the worlds most progressive income tax system because we have the most (pre tax) income inequality. I fear what the country would look like if we had UK style tax rates with Irish style (pre tax) income inequality.
Also also regarding your comment saying what would happen to the economy if the Irish tax system were to become more progressive. Well not much will happen at all according to the data
An analysis by Gravelle and Marples (2011) of top tax rate changes since World War II show that higher rates have no statistically significant impact on factors driving economic growth—private saving, investment levels, labor participation rates, and labor productivity—nor on overall economic growth rates. There are numerous study's that find no statistical relationship between the tax on high earners and economic growth.
Thanks for your comments, which we appreciate and have taken on board. We will explore these issues and many others as we go forward.