Taxation on "high income" earners and the family (individualisation)

wexfordman

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Just been doing some taxation calculations based on income thresholds of dual income and single income families to see how they fare out

For the purposes of the excercise, I took a straight forward non complex approach, where earnings are all based on employee/payee earnings, and no pension calcuations included.

I decided the benchmark income would be 70k, as this is the threshold which most seem to identify as those who are well off or not.

Family income I have taken as the income of a couple, be they both working or one working. I have not taken into consideration child benefit, as taxation does not take this into account either, it is paid irrespective of income.

The objective here is to dispell the myth that taxation can and should be based entirely on individual incomes (individualisation), particular when it comes to family income.

A family, is two people with a legally recognised partnership/marriage etc.

So, some figures based on the deloitte 2017 tax calculator Deloitte | Budget 2017 Tax Calculator



Earners on 70k or above, are taxed heavily as they are perceived to be well off/better off, but as stated, family income is pretty much disregarded

A single income family on 70k takes home €4160 pm (€960 per week)

A dual income family on 25k each takes home €3627 pm (€837 per week). The 70k income couple take home jsut 6k more than the 25k dual income couple, despite earning 20k more.

A dual income family on 29k each takes home €4100 pm (€946 per week). Thats just €14 pw less than a 70k single income couple.

The above is the cruncher to me, the state targets people on low incomes to reduce taxation, and increase benefits and supports, but in reality, they are just as well of as a single income family on 70k!

A single income family on 80k takes home €4560 pm (€1052 per week), just over 100 euro per week better off than the dual income on 29k each.

The single income family on 70k, or 80k is creased with taxation, and gets little to no tax relief or supports from the state.

So, the question is really, why do we, and should we base our taxation policy based on a sledgehammer approach ?
Is targetting taxation based on individual income correcttly and fairly applying taxation based on ability to pay ?

Do these figures surprise anyone, and do they fit in with the narrative of low paid/high paid that we hear so much about ?
 


wexfordman

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Well, I'm up in 4hrs to put in a 13hr day, an overnigght away from home and back to the kids late Thursday night.. All so I can pay the state most if it in tax.

Sickening when I now see most of it is completely in vain...work does not pay anywhere near as much as you think.

Busting my hole for pretty much nothing.
 

Uganda

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Well, I'm up in 4hrs to put in a 13hr day, an overnigght away from home and back to the kids late Thursday night.. All so I can pay the state most if it in tax.

Sickening when I now see most of it is completely in vain...work does not pay anywhere near as much as you think.

Busting my hole for pretty much nothing.
When the guards and teachers are finished screwing you, you will have even less.
 

HarshBuzz

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Well, I'm up in 4hrs to put in a 13hr day, an overnigght away from home and back to the kids late Thursday night.. All so I can pay the state most if it in tax.

Sickening when I now see most of it is completely in vain...work does not pay anywhere near as much as you think.

Busting my hole for pretty much nothing.
I've pulled out of a job application process during the negotiation stage recently. I had two main concerns - one was around the viability of the employer but the other was the reward\effort payoff. My salary would have gone up about 25k but I would have gone from ~9hr days to lots of 12+, lots of travel and some weekend work. The payoff under our income tax system just wasn't worth it.
 

Watcher2

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Fvck off will ya. While FFers are scum the Gaelers have continued the charade. Look at the latest budget where baldy reduced USC rates AGAIN for the lower paid. At the previous budget, he tinkered at the lower end to give the lower paid less tax, and took many out of the USC net while increasing the rate at the higher end.

Fvck you and your blind support of thieves.
 

Voluntary

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A family, is two people with a legally recognised partnership/marriage etc.
The first issue is the State uses multiple definitions of a 'family'

Your definition is used for taxation (tax credits):
A family, is two people with a legally recognised partnership/marriage etc.

The definition State uses for Social Welfare affairs (means testing):
A family, is two people living together at the same address.

So the State uses 'family' definitions as it suits against many families interests.

The STATE should decide if 2 people living together in partnership make a family or not. The State should stick to only one definition.
 

farnaby

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Vicious circle - government reduces tax on low earners in the good times when tax intake elsewhere is high; wages follow suit; bad times reduce tax intake; govt can't raise low-wage taxes without serious standard of living impacts; govt hammers mid- to high-earners with tax increases.

And yes, this takes place without considering the number of dependents in a family except some paltry tax credit impact.

I recently got a promotion with a 6-figure salary, living in a one-income family with four dependents. Things are a lot better than last year but it's not plain sailing.
 

wexfordman

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wexfordman

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The first issue is the State uses multiple definitions of a 'family'

Your definition is used for taxation (tax credits):
A family, is two people with a legally recognised partnership/marriage etc.

The definition State uses for Social Welfare affairs (means testing):
A family, is two people living together at the same address.

So the State uses 'family' definitions as it suits against many families interests.

The STATE should decide if 2 people living together in partnership make a family or not. The State should stick to only one definition.
You know, you brought this up in the budget thread when we were discussing the same thing, I created this thread to specificity compare married single income versus married dual income.

I am bit dismissing your point, but perhaps it should be discussed under its own thread.
 

Watcher2

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Vicious circle - government reduces tax on low earners in the good times when tax intake elsewhere is high; wages follow suit; bad times reduce tax intake; govt can't raise low-wage taxes without serious standard of living impacts; govt hammers mid- to high-earners with tax increases.

And yes, this takes place without considering the number of dependents in a family except some paltry tax credit impact.

I recently got a promotion with a 6-figure salary, living in a one-income family with four dependents. Things are a lot better than last year but it's not plain sailing.
oooh, the knives will be out for you. Shades of P Flynn on 100k trying to upkeep three houses. Others should try it some time.

I do jest though. P Flynn uttered those ill fated words 30 years ago now and he was also talking about paddy pounds too. While 100k will keep you comfortable (unless you have a massive mortgage), for a single income household with multiple dependents, its not rich you are getting, doing well, but not rich. Shoulder to the grind stone is still mandatory. You probably dont have too much time to spend with your dependents either to hold down such a job requires crazy hours I suspect.

Congrats on the promotion.
 

Watcher2

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What's the solution?
Tax the lower paid....there, I said it. Everyone should pay something in income tax (and I include PRSI and USC as income tax). Employers PRSI should also be raised. 10.75% is a paltry amount....there, I said that too. Shock horror!!!
 

hammer

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Fvck off will ya. While FFers are scum the Gaelers have continued the charade. Look at the latest budget where baldy reduced USC rates AGAIN for the lower paid. At the previous budget, he tinkered at the lower end to give the lower paid less tax, and took many out of the USC net while increasing the rate at the higher end.

Fvck you and your blind support of thieves.
Rubbish.

Its a policy to try and make work pay.

Getting people off live register.

The whole system is broken. We need a bunch of accountants and Revenue officials to sit down and re-design it.

Marginal rates are too high. Standard rate tax band needs to be widened. FIS looked at. Tax credits need to be looked at etc...
 


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