Revenue 2011 income tax distribution data published

Geuze

The Revenue have published their 2011 Stats report.

http://www.revenue.ie/en/about/publications/statistical/2011/index.html


One of the reports is on income tax, with data on 2010 income tax paid.

http://www.revenue.ie/en/about/publications/statistical/2011/income-distribution-statistics.pdf


Gross income earned, tax paid, and the average tax rate are as follows:

2008 -

2009 - 82,051m tax = 10,616m, ATR = 12.9%

2010 - 77,729m, tax = 9,816m, ATR = 12.6%


A few points:

(1) the average income tax rate is way lower than the public perception

(2) while marginal rates are 52% for single people on 34k approx, the ATR is much, much lower

(3) should the MTR facing people on average income be reduced?

(4) in light of the huge fiscal deficit, should the ATR be increased?

Can (3) and (4) be done at the same time? How? Higher income tax collected with lower marginal rates on typical workers?

Godge

Geuze wrote: »

The Revenue have published their 2011 Stats report.

http://www.revenue.ie/en/about/publications/statistical/2011/index.html


One of the reports is on income tax, with data on 2010 income tax paid.

http://www.revenue.ie/en/about/publications/statistical/2011/income-distribution-statistics.pdf


Gross income earned, tax paid, and the average tax rate are as follows:

2008 -

2009 - 82,051m tax = 10,616m, ATR = 12.9%

2010 - 77,729m, tax = 9,816m, ATR = 12.6%


A few points:

(1) the average income tax rate is way lower than the public perception

(2) while marginal rates are 52% for single people on 34k approx, the ATR is much, much lower

(3) should the MTR facing people on average income be reduced?

(4) in light of the huge fiscal deficit, should the ATR be increased?

Can (3) and (4) be done at the same time? How? Higher income tax collected with lower marginal rates on typical workers?

(3) and (4) can be done at the same time but doing so is political poison unfortunately.

By cutting the top rate of tax, you decrease the marginal tax rate.
By cutting tax credits, tax allowances, personal credits etc., the average tax rate is increased.

However, this measure would hit hardest on those who pay little or no tax - those earning less. Charlie McCreevy's budgets by increasing social welfare and tax credits thus spreading the largesse around have created an unsustainable income tax system that removes the incentive to work or to work harder.

carpejugulum

USC is income tax so needs to be included in an honest analysis. It's just a marketing trick to charge it separately.

Although income tax is incredibly progressive, we have quite a few unavoidable flat taxes.

Also, if you want to spread the burden, you have to cut welfare, short term by at least 20% and long term by at least 40%.
PRSI should also be reformed to reflect how much you contribute.