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Income Levy

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The proposed income levy is a crude and inequitable method of raising revenue. Based on Revenue's latest published statistics, 855,000 taxpayers had incomes of less than €20,000 in 2006 and paid income taxes of €198 million on total incomes of €8.5 bn.

On this basis, the income levy of 1% would cost them €85 million. At the other end of the spectrum, 58,000 taxpayers earned over €100,000 and paid taxes of €3,320 million on total incomes of €10.1 bn. Application of the 1-2% levy would cost them €145 million.

This shows that the levy is equivalent to a 43% surcharge on income taxes paid by the lowest paid whereas it amounts to just 4% of income taxes for the highest paid.

If the levy scheme was changed to exclude those earning less then €20,000, the higher rate for the levy might, for example, have to be increased from 2% to 4% to generate the same overall revenue.

This would reduce their average incomes of €175,000 by €4,000 a year, hardly a large sacrifice in these who, by virtue of their high incomes, benefited most from the Celtic Tiger.

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This page contains a single entry by Brian published on October 20, 2008 2:24 PM.

Guarantees for Banks was the previous entry in this blog.

Banking Crisis is the next entry in this blog.

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