A new report launched today by TASC provides a detailed analysis of the Irish tax system. While some higher earners will benefit from tax cuts, everyone will lose from the resulting reduction of public services like health, education and social protection. Tax cuts will also reduce funds available for public investment in the economy, which has a vital role in sustainable economic recovery.
- A single person on €40,000, despite paying some tax at the "higher rate”, actually pays less than 10% income tax. On an income of €275,000, actual income tax paid is only 30%.
- If PRSI and USC are included - for a "marginal tax rate" of 52% - in fact a single person on €40,000 only really pays 15.5% of their gross income.
- Two-thirds (65%) of people who pay income tax do not pay anything at the higher rate.
- Only five per cent of people who pay income tax actually pay the higher rate of tax on more than half of their gross income.
- Everyone is a taxpayer, and families on the lowest incomes pay more than a quarter of their income in consumption taxes like VAT and excise.
- The public cost of tax reliefs and tax breaks, which greatly benefit the highest earners, is equal to more than a quarter of all taxes raised. This is far above the European average, and the cost of tax breaks has increased despite the economic downturn.