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THE HIGHEST EARNERS paid more tax in 2010 thanks to the introduction of a restriction on high income individuals by the Revenue Commissioners, according to a new report.
The report from the Revenue Commissioners showed people earning €400,000 or more paid an average effective tax rate of over 30 per cent that year, yielding an additional €52.2 million in tax.
This represents a 95.5 per cent increase on the tax that would otherwise have been paid if the restriction was not in place.
The overall number of individuals who were subject to the restriction was 1,544 producing an additional yield in 2010 of just over €80 million, almost double the yield of 2009.
In 2010 Brian Lenihan, then finance minister, introduced strict restrictions on relief which limited the use of certain tax reliefs and exemptions by high earners.
The new measures meant a reduction from €250,000 to €125,000 in the income level at which the restriction normally starts to apply to those earning €400,000 or more and the reduction from €250,000 to €80,000 in the amount of specified reliefs that can be used without restriction.
The report also said almost 600 people earning more than €125,000 but less than €400,000 still had an effective tax rate of 20 per cent or less, while some 18 paid less than 5 per cent.
Investment in hotels and holiday cottages, as well as stallion and greyhound fees were among the main categories of relief. Another major category for relief was donations to approved bodies.
Some 55 artists, writers and composers claimed relief of over €20 million in 2010 on their profits and gains.
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They pay in excess of 30% of their income!!!!! People on 30k pay about 12%!!!!! Add to this the fact these are the very people who create jobs, spend money in our struggling domestic economy and you will see that your line of economics just does not add up…..
I’ve often wondered about this. I’m not an economist and will admit that I’ve fallen for the populous view before however the reason high earners make money is because they are in business. That means employment.
I’d love to know what the whole argument is. Who are these top earners? What businesses are they involved in? Is the percentages quoted around their contribution to tax based on their personal income or does it take into account that they create jobs?
Even taxing high earning employers will have to find a limit – if you were an employer who puts a lot of work into your company and provided employment then you’d feel pretty aggrieved at people looking to add to your personal taxes without understanding that there is more of a contribution to the economy that your direct taxes.
Like I said, I don’t really know a lot about economics but I’m sick of the blinkered populous view – about a lot of things – in this country.
how many of the high earners arr not generating jobs, wealth for other? I’m looking at you govt consultants, govt bank executives, state monopoly executives, senior civil servants… those feckers should be taxed to the hilt. otherwise, either s flat or progressive tax for everyone else, so long as everyone contributes fairly.
@ Declan,
Are you including VAT, TV Licence, motor tax, fuel tax, household charge, etc in those percentages?
If you did you will see that your comparisons just don’t add up…..
There seems to an incredibly dumb view from some Irish people that just because someone creates a job, they deserve a tax break… The idiocy of this belief demonstrates how corrupt Ireland still is.
For example, one poster above mentions “however the reason high earners make money is because they are in business. That means employment.” !
So that means they should be given special treatment??? Man, stop living in a fantasy world. If you are a business or wealthy corporation, PAY YOUR FAIR SHARE LIKE ANYONE ELSE.
That was me Rob – and if you read my post I think I’m admitting I’m no expert and hardly deserve to be called dumb by inviting people to educate me on the subject rather than just jump on the populous bandwagon.
I would also say that it’s hardly the person who creates A SINGLE JOB who is managing to avoid the tax net but those high earners who are in business with many employees being paid out of the pocket of their business and who themselves may be unemplyed rather than contributing to the tax take
That was my point. I at no time said that everyone who was a high earner was directly employing a lot of people. I at no time suggested that they shouldn’t be taxed at all so wind yer neck down….
If you are under the delusion that a business or a corporation has no limit to wealth or that any dent in profits does not make them immediately look at lowering their numbers of employees then you need to think again.
I, like many was made redundant and can assure you that any threat to profits and a company’s ability to weather the storm of tough financial times instantly brings up thoughts of downsizing. If that company is a medium sized enterprise then personal taxation becomes a factor.
I’m not suggesting this is true in 100% of cases, I specifically hoped that someone would give some statistics and FACTS rather than personal attacks and holier-than-though “I know but I’m not getting off this high horse to tell you” responses….
Keep suggesting that people are naive all you want – and keep the blinkers on too……
Still not enough. The taxes on the top 10% are very low compared to other countries. For example, France has a 75% tax on the filthy rich. Ireland could increase taxes on the rich.
So what do we do Tim ? Keep screwing the CEOs and the entrepreneurs in this country . Squeeze them out of the Irish market to keep the begrudgers happy . Typical attitude !!! You just read the story and how much high earners pay in tax . Some day I wish you luck and maybe you will end up as a director or CEO and I wonder will you sing the same song.
Let’s encourage the people at the top to create more work and make it attractive instead of the anti-capitalist caveman mentality .
30% of how much in 2010, and 5% of how much earnered in 2006….???
So the 387 people now earn 10 or 20 times what they did 4 years previous…These percentages prove nothing, only that the Govt/Revenue(CS) can massage the figures to suit the Media Bull & Spin…!!!
Stallion, Greyhound fees…Come on, are they serious…???. And as for artists, make them pay the same as everyone else
30% effective tax rate? The AVERAGE across OECD is 43%, this report does nothing to erode the belief that the rich don’t pay enough here. Also quit the Jim ‘they’ll flee the country if we hit them harder’ Power baloney, suck it and see, if they’re so patriotic that they only buy Irish horses and pay the wages of Irish football managers, they should be up for sticking.
“The AVERAGE across OECD is 43%”
The average effective rate? According to the OECD tax database the average tax burden on wages from “All-in average personal tax rates” comes to about 21.1% or 17.8% if you exclude child and similar benefits.
Source: http://www.oecd.org/tax/taxpolicyanalysis/2576404.xls
High earners enjoyed nearly 60 tax reliefs. BY 2005 there were nearly 60 major tax relief and exemption schemes available to higher earners in Ireland. In 2005 the Revenue Commissioners carried out an analysis of the tax rates paid by the country’s top 400 earners (that is, those resident in Ireland for tax purposes) and the results provoked a shocked reaction, even at a time when citizens were largely indifferent to the public finances.
The analysis showed this group of people had fully exploited those schemes and that a substantial percentage paid zero tax or tax in single-digit figures. Minister for finance Brian Cowen addressed the issue of tax reliefs but he gave most a tailing-off period of many years before they were closed down.
Source: http://www.irishtimes.com/newspaper/ireland/2012/0809/1224321805841.html
I see my comment referencing the rest of the article and showing that Rob is quoting 2005 information out of context of subsequent measures has been removed.
There’s always the French method. Introduce a ruinous tax rate so that the rich wealth creators move to London and pay reasonable tax rates there.
or pop over the border to Luxemburg & Switzerland,
I suspect that the French gov are happy enough with the socialist optics of tax the rich as opposed to actual income increases from a more reasonable tax system for those deemed wealthy
What evidence is there to suggest that having a cohort of super rich in a country actually generates wealth? Ireland’s economy is built mainly from small and medium entreprises, and the rest from multi-nationals, most of whose CEO’s have never set foot in Ireland. Don’t get me wrong I’m not some ne’er do well who dislikes anybody with money, but we don’t need them to have a successful economy. Don’t rich people weaken an economy anyway? An unequal distribution of wealth causes an increase in saving, pulling money out of the economy which causes a slowdown in the velocity of money and by extension a demand for goods and services.
Brendan, I’m glad some else has an understanding of economics here. The support being given to people making huge amounts of money getting off with paying less proportionately than people less income makes me so annoyed.
Those who benefit from it try to justify it, but graduated income taxation makes a mockery of our supposed right to equality before the law.
What do you suggest Del? Our tax system is very progressive…more you earn the more you pay. This has been backed up by the ERSI who believe we have one of the most progressive tax systems in the world..
Flat tax.
Perhaps you misunderstood me Declan. By “those who benefit from it” I mean those who receive taxes redistributions from the state. I’m saying that people with higher levels of taxation on their income are treated unfairly in comparison to others, and it makes a mockery of their supposed right to “equality” before the law.
Are you taking the mick? Flat tax? That is simply crazy talk. Anyone who knows anything about taxation knows that progressive taxation is the only way to work it, otherwise. Taxation in effect is redistribution of wealth so that one section of society doesn’t receive too much at the expense of the rest of society.
This story is a joke, people earning over 400k a year pay 30% a year while any overtime I get I pay 40%? Why if they earn so much in excess of my base salary they don’t get hit for the 40% I pay?
Ideally it’d be scrapped outright. Flat and as close to 0 as possible is arguably the next least-worse option (still a bad one).
Now I get it, I just got trolled!
Zing! :)
I dont care what figure people pay, as long as someone who earns multiple times my salary isn’t paying less of an effective rate of tax than i, thanks to tax breaks and loopholes, then I’m happy. the people who create jobs especially, should be looked after, but if you’re head of a bank because you went to the right school or knew the right minister, then I’d happily see you taxed to the max.
It’s hilarious reading the comments made by a couple of Kenny supporters who continue the “it’s everyone else’s fault” philosophy espoused by Charlie McGreevvy.
Kenny? Nice guy. Smart too. Never should have been elected. He’s a classic example of the tax break symbol. He is in way over his head and is now in a dogfight for re-election. He (or his toadies) lashes out and, instead of trumpeting his own successes, tries to create doubt by using the “do we want to go back to the policies that got us into this mess?” line. He can’t give us any reason to re-elect him so he bashes his competition.
At some point Kenny has to accept responsibility for the economic mess we are in. Blaming FF, the tsunami, the European debt crisis, China, etc., etc. for where we now find ourselves is childish. Should we amend the constitution to allow Kenny to serve fifteen terms in office before he accepts even a modicum of responsibility for this mess?
Kenny is in full panic mode. Things will get worse for him and he knows it. He will let the rich pay less taxes and starve the country of revenue.
But Rob, you’ve already told the entire site that you pay an effective tax rate of 0% because you get paid cash in hand and don’t declare your income. Now that’s the sort of behaviour that’ll “starve the country of revenue”.
Damocles,
When the government cuts the fat, I will start to pay my tax. I will not pay it for a NAMA worker to earn €100K on my back. I will pay tax when there is an accountable public sector and competitive wage structure.
“to allow Kenny to serve fifteen terms in office before he accepts even a modicum of responsibility for this mess”
You mean kind of like Bertie/FF?
Time to stop berating “Kenny lovers” and start offering an alternative Rob. What is your alternative?
Wait a minute – I just read Damocles’ post and your reply. Now I’m off to the Senator Healy Eames thread to see what type of hypocritical cattle waste you posted there.
I need a good laugh this evening…..
And while you aren’t paying tax, are you fraudulently claiming welfare? Are you the fat?
Their wealth also rose during this time.
Stupid phone, made mistake and posted other two comments
my heart bleeds for the poor lads, its also failed to mention that in 2011 while most ordinary folk in ireland saw there wages and money decrease by as much as 10%, the rich and top earners saw a 4% increase……..so you will excuse me if I don’t exactly weep at the lad running the esb who consistently screw the nation with price increase or the head of bord gais or CIE who are on wages in excess of 500k a year having to pay a lot more tax that the public purse part funds than some struggling family on low income being hit all sides!
Are these really 2010 numbers becoming available in August 2012?
Probably, 2011 tax returns have to be in during this year. The 2010 figures will depend on tracking down any late revenue payments or other adjustments.
The 2010 tax returns can be filed anytime up to 15th November 2011
I see – so the numbers aren’t the actual tax collected in 2010 but rather the tax collected in 2010 & 2011 but relating to income taxable in 2010?
Interesting, ….very interesting.
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Reminds me of that 80s band.
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