Report suggests 'payroll tax' to protect healthcare

seabhcan

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Report suggests 'payroll tax' to protect healthcare - The Irish Times - Thu, Nov 29, 2012

A report by the Dept of Health says that unless they find a way to pay themselves less, then new taxes will have to be invented to maintain our high standards of healthcare.

"Payroll taxes, found in 18 out of 27 European countries, are common across high-income countries, the report notes."

The report recommends a 'payroll tax'. Now, I've heard this phrase from the US, but I always thought PRSI was a payroll tax. Your employer pays it - its a cost of employing someone. I don't understand how it is different from what this report is proposing.
 


willow68

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Not a bad idea, it works fine in the likes of Germany and Holland, but over here it would merely rubberstamp all the inbuilt systemic inefficiency of the HSE. Where's the political will to truly reform local government and health care systems. Pies in the sky.. Incidentally, there's been a broken water pipe in my street for the last three months. I expect an attempt by government to levy water charges. A good metaphor for the whole rotten thing that we're made to endure daily.
 

seabhcan

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Not a bad idea, it works fine in the likes of Germany and Holland, but over here it would merely rubberstamp all the inbuilt systemic inefficiency of the HSE. Where's the political will to truly reform local government and health care systems. Pies in the sky.. Incidentally, there's been a broken water pipe in my street for the last three months. I expect an attempt by government to levy water charges. A good metaphor for the whole rotten thing that we're made to endure daily.
It isn't a bad idea - but I think we've had payroll taxes for decades. PRSI includes a component earmarked only for the health system. Its paid by employers. Is that not exactly what this report is calling for?
 

willow68

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t isn't a bad idea - but I think we've had payroll taxes for decades. PRSI includes a component earmarked only for the health system. Its paid by employers. Is that not exactly what this report is calling for?
We agree. My point was, though, that unless duplication and inefficiencies are seriously and intelligently tackled, it's just more taxation for no particular improvement of services.
 

jams odonnell

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An employer payment is the main funding source (along with the individual's insurance payment) in The German and Dutch Universal Health Insurance systems. The Employer contribution is used to fund chronic conditions. Not a bad idea. All in the implementation....
 

Skin the Goat

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It isn't a bad idea - but I think we've had payroll taxes for decades. PRSI includes a component earmarked only for the health system. Its paid by employers.
Sorry???

Health Levy
The health levy is a charge payable by all individuals aged between 16 & 70 towards the cost of health services in the State. For many years the health levy was charged at a rate of 2% however the rates for the 2010 tax year are now as follows:

Employed & self employed contributors
4% on income up to €75,036
5% on income over €75,036

An employee or a self employed contributor will be exempt from the health levy where his/her income for the year does not exceed €26,000. Also, holders of a full medical card are exempt from the health levy.
 

cytex

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Report suggests 'payroll tax' to protect healthcare - The Irish Times - Thu, Nov 29, 2012

A report by the Dept of Health says that unless they find a way to pay themselves less, then new taxes will have to be invented to maintain our high standards of healthcare.

"Payroll taxes, found in 18 out of 27 European countries, are common across high-income countries, the report notes."

The report recommends a 'payroll tax'. Now, I've heard this phrase from the US, but I always thought PRSI was a payroll tax. Your employer pays it - its a cost of employing someone. I don't understand how it is different from what this report is proposing.
Stupid question incoming but why dont the pay themselves less instead of inventing new taxes to keep the perks going ?
 

seabhcan

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Sorry???

Health Levy
The health levy is a charge payable by all individuals aged between 16 & 70 towards the cost of health services in the State. For many years the health levy was charged at a rate of 2% however the rates for the 2010 tax year are now as follows:

Employed & self employed contributors
4% on income up to €75,036
5% on income over €75,036

An employee or a self employed contributor will be exempt from the health levy where his/her income for the year does not exceed €26,000. Also, holders of a full medical card are exempt from the health levy.
Unless you are self employed, your employer pays about an additional 10% (I forget the exact number) of your salary as Employer PRSI - a portion of which goes to health. This is in addition to the PRSI you pay out of your wage and the health levy.
 

seabhcan

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An employer payment is the main funding source (along with the individual's insurance payment) in The German and Dutch Universal Health Insurance systems. The Employer contribution is used to fund chronic conditions. Not a bad idea. All in the implementation....
Pre-wage payroll taxes are just a statistics fiddle on behave of the government.

If I hire someone in Ireland on a wage of 50,000 - it actually costs me about €60k because of Employer PRSI and other costs. The tax man takes €10k from me and then takes 'tax' from the employee at point of payroll. The take home pay is about €35k. The employee thinks they are getting paid 50k and paying €15k tax - really they should be being paid €60k and paying €25k tax.

In France the cost of paying someone €50k is about €110k because of all the levies, payroll taxes, pensions, etc. But by doing it this way - France gets to claim that average wages are lower than they really are, and that tax is lower.
 

optics

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Stupid question incoming but why dont the pay themselves less instead of inventing new taxes to keep the perks going ?

Your idea is common sense but you do know you're dealing with the public service in Ireland right?
 

jams odonnell

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Pre-wage payroll taxes are just a statistics fiddle on behave of the government.

If I hire someone in Ireland on a wage of 50,000 - it actually costs me about €60k because of Employer PRSI and other costs. The tax man takes €10k from me and then takes 'tax' from the employee at point of payroll. The take home pay is about €35k. The employee thinks they are getting paid 50k and paying €15k tax - really they should be being paid €60k and paying €25k tax.

In France the cost of paying someone €50k is about €110k because of all the levies, payroll taxes, pensions, etc. But by doing it this way - France gets to claim that average wages are lower than they really are, and that tax is lower.
Nevertheless, countries which use this payment system have excellent healthcare systems with much better outcomes than ours.

Insurance payment are very good for acute and procedure-based treatments but very poor for the treatment of chronic conditions.

Most other western European countries fund chronic care through employer contributions and it works well.

Welcome to the Eurozone :)
 

highgiant

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Nevertheless, countries which use this payment system have excellent healthcare systems with much better outcomes than ours.

Insurance payment are very good for acute and procedure-based treatments but very poor for the treatment of chronic conditions.

Most other western European countries fund chronic care through employer contributions and it works well.

Welcome to the Eurozone :)

I'm confused... whats the difference between the health levy and this proposal? Would they not be as well to just increase the health levy contributions if they wanted to do this.
 

daveL

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I'm confused... whats the difference between the health levy and this proposal? Would they not be as well to just increase the health levy contributions if they wanted to do this.
you forget the Irish administrations love for ever increasing complexity and layers of taxation
 

jams odonnell

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I'm confused... whats the difference between the health levy and this proposal? Would they not be as well to just increase the health levy contributions if they wanted to do this.
None really.

If they ringfenced the health levy for funding of chronic condition treatments it would work just as well.

Health levy is paid by the employee though and this would be paid by the employer.
 

EvotingMachine0197

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Report suggests 'payroll tax' to protect healthcare - The Irish Times - Thu, Nov 29, 2012

A report by the Dept of Health says that unless they find a way to pay themselves less, then new taxes will have to be invented to maintain our high standards of healthcare.

"Payroll taxes, found in 18 out of 27 European countries, are common across high-income countries, the report notes."

The report recommends a 'payroll tax'. Now, I've heard this phrase from the US, but I always thought PRSI was a payroll tax. Your employer pays it - its a cost of employing someone. I don't understand how it is different from what this report is proposing.
Of course, a high cost of healthcare does not necessarily mean a high standard of healthcare.
 


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