Comments on: DoF Document on Tax Reliefs

By: cliff taylor

cliff taylor — Tue, 03 Aug 2010 10:12:22 +0000

indeed !
“suspicious mind” i meant of course

By: OAC

OAC — Tue, 03 Aug 2010 09:51:04 +0000

@cliff
“a suspicion mind might wonder why the full breakdown is not published any more. ”

sunlight = disinfectant.

Transparency in all financial matters relating to wages, expenses, benefits and tax reliefs would lead to better and faster changes in both public & private sectors.

We should start with the highest-level, highest-paid positions and work our way down.

By: cliff taylor

cliff taylor — Tue, 03 Aug 2010 09:17:09 +0000

an interesting aside is that they no longer publish — as far as I know — details of what ALL top earners pay in tax. This used to be published up to recent years and was the one that used to yield the ” 3 millionaires paid no tax” headlines. Since the new restrictions were introduced, it was replaced by the document referred to, which covers only those who aggressively use the reliefs named in the legislation.

a suspicion mind might wonder why the full breakdown is not published any more. All we get, as far as i know, is a much less complete breakdown in the revenue reports. Is it the case that the minimum rate now catches everyone, barring tax exiles of course?

By: Antoin o lachtnain

Antoin o lachtnain — Mon, 02 Aug 2010 16:57:29 +0000

Hey eggheads! There is such confusion about this. Public discussion seems very naive as a result Let’s produce a chart or infographic to show where tax revenue comes from.

By: OAC

OAC — Mon, 02 Aug 2010 11:37:20 +0000

Are these studies looking at companies as well as individuals? Individuals in the know set up companies to take advantage of some massive tax breaks on pensions and CG on property investments? I first learned of this loophole at a state-subsidised entrepreneurship training programme some years ago.

It’s also documented quite nicely in 2 Irish-published books “The Tactics of the Rich” and “The Tricks of the Rich”. These books make for amusing reading in the current climate.

Panel discussions about these tax breaks emphasized the apparent reasonableness of tax breaks for Joe Soap’s pension funds. I never heard anyone mention how these tax breaks were being used systematically by those in the know to set up corporations to take advantage of tax-breaks in their property investments and personal pensions.

A closer look at tax breaks for high-level company pension schemes is warranted, considering its potential for abuse. This is the kind of pension fund that has virtually no limit on how much you set aside, typically used by company directors & executives.

By: AMcGrath

AMcGrath — Mon, 02 Aug 2010 10:44:08 +0000

“the correct figure for the average tax rate paid by those earning over half a million is 32%. ”
Given the tax breaks freely available to such earners - I suppose we should be grateful that they are contrbuting taxes they could easily avoid. Why do I have a niggling suspicion that these figures are not correct. It implies that high earners are not really interested in the money - where are all these altruistic millionaires?

By: hoganmahew

hoganmahew — Sun, 01 Aug 2010 21:36:07 +0000

@Karl
Fair enough. I stand defeated. There’s something weird going on, though. The number of taxable units has gone up between 2006 and 2008… (difference between revenue statistical report and Mr. Keena’s infographic) I would expect a decline?

By: Karl Whelan

Karl Whelan — Sun, 01 Aug 2010 21:19:26 +0000

@ hogan

No, this really is only the 423 that are subject to the restrictions — trust me, in 2008 more people than that made over half a million (look at the Irish Times table, for instance).

The 23 versus 18 figure is just another example of a really poorly explained document. There were 23 people affected by the restriction. Of those, 18 would have paid some tax without the restrictions, i.e. 5 wouldn’t.

Look at the bottom of that table and notice the difference of 35 between the two “number of cases”. This is explained elsewhere as “35 individuals with adjusted income of €500,000 or more, who would not otherwise
have paid tax in 2008.”

By: hoganmahew

hoganmahew — Sun, 01 Aug 2010 21:10:50 +0000

@Karl
Ooops sorry about that. Yes, must be 2004 referring to 2002 stats? Given the interminable wait we have for anything approaching income stats…

By: hoganmahew

hoganmahew — Sun, 01 Aug 2010 21:02:57 +0000

I have to take issue with you about the 423 number, though. The revenue statistical report on income distribution for 2006 (released in 2008 - we’re still waiting for one for any year subsequent to 2006…) shows that 11,714 taxable units had incomes over 275,000.

As 2006 was peak bubble, I suspect the numbers have declined since then.

Further, Annex 2 of the revenue document implies that 23 people had incomes of over 2 mn of whom 18 were subject to a minimum tax rate. In all, 189 had incomes of over 500k and 154 subject to the MTR, is my reading of it.

Mind you, the use of gross income may be a little suspect. Is this gross income for the individual/one-man company, or gross income after deductions, but before tax…

By: Karl Whelan

Karl Whelan — Sun, 01 Aug 2010 21:00:24 +0000

@ Hogan

To be fair, Cowen didn’t become Minister for Finance until 2004.

By: hoganmahew

hoganmahew — Sun, 01 Aug 2010 20:50:14 +0000

Of course, this is not a new complaint. See this repeat of an IT report from 2002:
http://www.thepropertypin.com/viewtopic.php?p=33#p33
“Mr Cowen announced yesterday he had signed orders on the phasing out of the seven incentives criticised in the report, as promised in the Budget last December. This combined with an effective cap on remaining tax-incentive schemes meant that all high earners would pay a minimum rate of 20 per cent.”
We’re still waiting for the 20% minimum it would appear.

We’re still waiting for a lot of things…