Income tax, who pays what

aftermn · 05-12-2009 2:25am #1

Business section of Fridays Times has an analysis of tax paid. Like all statistical presentations it shows what it is intended to show, that the higher paid pay relatively more then the lower paid. In a progressive tax system one should not be surprised with this result.

There is a surprising figure in the analysis. It is that over 60% of the earners are in the 0 - 40K bracket. 1.4 million earners earning 27.7 million euro. This works out at approx 19K each.

Since the minimum wage works out at approx 17.5K, would it be fair to say that the race to the bottom is almost over?

The_Honeybadger · 05-12-2009 2:28am

aftermn wrote: »

Business section of Fridays Times has an analysis of tax paid. Like all statistical presentations it shows what it is intended to show, that the higher paid pay relatively more then the lower paid. In a progressive tax system one should not be surprised with this result.

There is a surprising figure in the analysis. It is that over 60% of the earners are in the 0 - 40K bracket. 1.4 million earners earning 27.7 million euro. This works out at approx 19K each.

Since the minimum wage works out at approx 17.5K, would it be fair to say that the race to the bottom is almost over?

I would guess most of these people are not full time, my partner works about 20 hours a week for example and makes about 15-20k. Alot of people don't work full-time so that is why the figures say that I guess

Diarmuid · 05-12-2009 9:57am

aftermn wrote: »

There is a surprising figure in the analysis. It is that over 60% of the earners are in the 0 - 40K bracket.

Why is this surprising? The average industrial wage is €33k so by definition 50% should be below this.

aftermn wrote: »

Since the minimum wage works out at approx 17.5K, would it be fair to say that the race to the bottom is almost over?

What do you mean?
Who are we racing?
How do you win?
Considering we have the second highest minimum wage in Europe does that mean we win or lose the race?

K-9 · 05-12-2009 11:30am

aftermn wrote: »

Business section of Fridays Times has an analysis of tax paid. Like all statistical presentations it shows what it is intended to show, that the higher paid pay relatively more then the lower paid. In a progressive tax system one should not be surprised with this result.

There is a surprising figure in the analysis. It is that over 60% of the earners are in the 0 - 40K bracket. 1.4 million earners earning 27.7 million euro. This works out at approx 19K each.

Since the minimum wage works out at approx 17.5K, would it be fair to say that the race to the bottom is almost over?

No, about 10% earn minimum wage. Part time workers would also make up the lower incomes.

Why you see 30-40k as part of the race to the bottom, I don't know!

ei.sdraob · 05-12-2009 11:38am

Sigh

until there is someone hungry left in this world who is willing to work to get some food, some jobs will migrate (get outsourced)

like it or not the employees in this country (except the public sector who live in lala land) have to compete against another 6 billion people on this planet with the economy being open

the fact that we have such high standards of living is a miracle when compared to the poverty of rest of the world, hey were even relatively richer than most of europe now (even with recession and all)

people really need to standback and get some perspective

oh and OP seem my sig for OECD report, pay particular attention to the taxation section

4Xcut · 05-12-2009 1:55pm

Diarmuid wrote: »

Why is this surprising? The average industrial wage is €33k so by definition 50% should be below this.

What do you mean?
Who are we racing?
How do you win?
Considering we have the second highest minimum wage in Europe does that mean we win or lose the race?

That's not how averages work.

Ten people each earning, say, 30,000 a year have an average wage of 30,000 a year. Suppose now, of those ten people one becomes unemployed and earns nothing*. The average wage is now ((E30,000x9)+(E0x1))/10, which is E27,000.

We have 90% of people earning more than the average wage.

The opposite could also be true with only one person working out of our original ten, where the average wage would be E3,000 and only 10% of people would be above the average wage.

*Assume no social welfare/friends helping them out/etc. Just to make the point about averages mathematically.

Diarmuid · 05-12-2009 2:05pm

4Xcut wrote: »

Ten people each earning, say, 30,000 a year have an average wage of 30,000 a year. Suppose now, of those ten people one becomes unemployed and earns nothing*. The average wage is now ((E30,000x9)+(E0x1))/10, which is E27,000.
.

From the original "It is that over 60% of the earners are in the 0 - 40K bracket. "

Sandwich · 05-12-2009 2:14pm

aftermn wrote: »

Since the minimum wage works out at approx 17.5K, would it be fair to say that the race to the bottom is almost over?

No, because minimum wage is far to high - another delusional indulgence we allowed ourselves during the boom(=borrow to simulate boom) years. The 'race' has another 20%-30% to decrease before we get there.

Lockstep · 05-12-2009 3:04pm

I'm pretty sceptical about the idea of lowering the minimum wage and it actually achieving something; I don't see lowering the minimum wage as doing much beyond making life more difficult for those on it and creating some extra minimum wage jobs (which isn't the kind of jobs we need to be focussing on during a recession)

http://www.irishtimes.com/newspaper/opinion/2009/0814/1224252547193.html

ceret · 05-12-2009 3:49pm

4Xcut wrote: »

That's not how averages work.

Yeah there's a few kinds of averages. The common "add them all up and divide by the sum" is the mean. The one in the middle is the median. Wikipedia has more.

Usaully newspapers will choose the statistics that makes the best story. Remember there are Lies, Damned Lies and Statistics

97i9y3941 · 05-12-2009 4:10pm

if they bring the tax net down further it just encourage people to go on the dole instead...

ceret · 05-12-2009 5:27pm

Fred83 wrote: »

if they bring the tax net down further it just encourage people to go on the dole instead...

Yeah, that's why they are bring the dole down. To discourage people from going on the dole.

Diarmuid · 05-12-2009 5:57pm

ceret wrote: »

Yeah there's a few kinds of averages. The common "add them all up and divide by the sum" is the mean. The one in the middle is the median. Wikipedia has more.

For a large sample size with few outliers (ie a few earning 500k+ relative to the rest) the mean and the median are almost the same

marco_polo · 05-12-2009 6:29pm

aftermn wrote: »

Business section of Fridays Times has an analysis of tax paid. Like all statistical presentations it shows what it is intended to show, that the higher paid pay relatively more then the lower paid. In a progressive tax system one should not be surprised with this result.

There is a surprising figure in the analysis. It is that over 60% of the earners are in the 0 - 40K bracket. 1.4 million earners earning 27.7 million euro. This works out at approx 19K each.

Since the minimum wage works out at approx 17.5K, would it be fair to say that the race to the bottom is almost over?

Not quite we have a fair bit of work to do yet.

http://globalrichlist.com/

<Insert the average industrial wage -33000>
Puts you in the top 2.74% of the richest people in the world.

<Insert the minimum wage -17500>
Puts you in the top 10.73% of the richest people in the world.

97i9y3941 · 05-12-2009 7:10pm

kickoutthejams wrote: »

I'm pretty sceptical about the idea of lowering the minimum wage and it actually achieving something; I don't see lowering the minimum wage as doing much beyond making life more difficult for those on it and creating some extra minimum wage jobs (which isn't the kind of jobs we need to be focussing on during a recession)

http://www.irishtimes.com/newspaper/opinion/2009/0814/1224252547193.html

true,i mean where would we stop,if we took a euro off it,they be whingeing again to take another euro off and so forth...

nesf · 05-12-2009 7:25pm

ceret wrote: »

Yeah there's a few kinds of averages. The common "add them all up and divide by the sum" is the mean. The one in the middle is the median. Wikipedia has more.

Usaully newspapers will choose the statistics that makes the best story. Remember there are Lies, Damned Lies and Statistics

When average is used with regard to CSO stats it invariably is the mean. Median numbers are called median numbers.

nesf · 05-12-2009 7:25pm

Diarmuid wrote: »

For a large sample size with few outliers (ie a few earning 500k+ relative to the rest) the mean and the median are almost the same

However pay data isn't like that so the two are different in this regard.

Thomas_S_Hunterson · 05-12-2009 7:33pm

Diarmuid wrote: »

For a large sample size with few outliers (ie a few earning 500k+ relative to the rest) the mean and the median are almost the same

This is completely not true.

Loosely speaking, the mean and median are the same when a distribution is symmetric. Absolutely not the case with salaries.

Diarmuid · 05-12-2009 8:14pm

Sean_K wrote: »

This is completely not true..

You are right. but it's dependant on the magnitude of the outliers.

In any case this whole discussion can be reduced to the attached pdf. All the info you need is there from 2006

FYI (Ronan Lyons parsed the pdf and produced these tit bits)
1. The average millionaire pays six times the income tax rate of the average worker.
2. Two thirds of the 2.2m people paying income tax in Ireland paid an average rate of less than 10%.
3. The median earner pays about 4% in income tax in Ireland, compared to 20% in the OECD.

nesf · 05-12-2009 8:20pm

Diarmuid wrote: »

You are right. but it's dependant on the magnitude of the outliers.

This is a discussion about wages, the outliers are practically guaranteed to be large and significant.

Diarmuid · 05-12-2009 8:32pm

nesf wrote: »

This is a discussion about wages, the outliers are practically guaranteed to be large and significant.

If you read the pdf I attached, it deals with income bands, so you don't have to worry about medians or means at all!

nesf · 05-12-2009 8:34pm

Diarmuid wrote: »

If you read the pdf I attached, it deals with income bands, so you don't have to worry about medians or means at all!

You were replying to a post that was replying to someone quoting the average industrial wage (which is a mean) where they pointed out to the user that it wasn't a median value which was correct. Talking about means and medians being the same for symmetric distributions just confuses the issue.

Diarmuid · 05-12-2009 8:46pm

nesf wrote: »

You were replying to a post that was replying to someone quoting the average industrial wage (which is a mean) where they pointed out to the user that it wasn't a median value which was correct. Talking about means and medians being the same for symmetric distributions just confuses the issue.

Ok so let's get back to the title of the thread. "Income tax, who pays what"

Income tax, who pays what

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