And yet still they don’t pay higher rates of tax… August 9, 2012Posted by WorldbyStorm in Economy, Irish Politics.
A CAMPAIGN to ensure the highest income earners in the State pay their fair share of tax has been largely successful, a new report by the Revenue Commissioners has shown.
An analysis carried out by the Revenue on the 2010 tax year shows the average effective tax paid by the highest earners increased from 5 per cent in 2006 to its stated target of 30 per cent four years later.
It meant this group of 387 individuals earning more than €400,000 paid an additional €53 million in tax in 2010, almost double the amount of tax they would have paid that year had the new restrictions not been in place.
Six years ago, analysis by the Revenue of the tax returns of the 400 highest earning individuals showed a substantial majority were paying zero tax or tax of 10 per cent or less.
Wait a second. Many citizens pay income tax at the higher rate. That means that these ‘highest income earners in the State’ are still ten per cent below the rates many of us pay, and let’s not even consider additional deductions over and above income tax such as PRSI and USC. And that thought in mind for those on the ‘standard’ rate throw in those deductions and those ‘highest income earners’ are paying at rates not hugely greater.
Nor is it as even this mild amelioration is systemic…
However, nearly 600 people earning more than €125,000 but less than €400,000 still had an effective tax rate of 20 per cent or less, with some 18 paying less than 5 per cent.
And none of this is even close to the sort of measures being implemented in France.
And on a very slight tangent can I reference this post by Michael Taft where he notes that were the government to ‘fashion a set of tax measures, rates, reduction of tax expenditures , new taxes, etc – to bring the disposable income of the top 10 per cent to EU averages, it would take in between €3bn and €3.5 bn, enough to reach their Budget 2013 target. If the Government went Nordic, it would be enough for the next two budgets’.
But, and this is the crucial point he makes – and one that links right back to the issue the IT article deals with, he continues:
Would this be too onerous on high income groups? No. It would mean they would be ‘earning’ the same as their EU counterparts. But let’s not forget: we are in recession, we are in a bail-out. If there is a time to ask people who can afford it to make a sacrifice, now is that time.
Yesterday we had the pitiful display of hand-wringing on the part of the Irish Times editorial writer as regards social welfare cuts. For them there’s no alternative. But there is.