Hospital overcrowding, increased homelessness and the direct provision system demonstrates a connection between low taxation and poor public services. That’s the conclusion of Nevin Institute director, Tom Healy, in his latest blog post.
While significant taxes are being funnelled into paying off the bank debt, the tax paid by ‘average’, ‘below average’ and ‘above average’ workers in Ireland is, he says, are well below the European and North American average.
The blog also reports that:
- those on the average wage in Ireland pay 17.9% of their income
- the lower paid, those on 67% of the average wage, pay the lowest on taxes at 11.5%
- well-off tax payers, on 200% of the average wage, pay 34.9%
These figures are for single workers, and taxation rates for couples are more favourable.
Of the 29 countries examined in the report, (within Europe, North America and Australia) Ireland pays the lowest amount in taxes for people on below average and average wages. Ireland is more ‘middle of the road’ when it comes to our high earners; ranking twelfth in the grouping. Belgium taxes their high earners the highest tax at over 50%.
Tom doesn’t argue for tax increases for average and below average workers, He says there is a more urgent need right now to restore living standards and boost domestic demand. This needs to be achieved he says “through a growth in quality employment and a recovery in wages with priority for those on low pay”.
He says the alarming aspect of the situation is that very few observers acknowledge the facts about Irish taxation or want to do so. Tom concludes “Worse still many (most?) see no connection between low taxes and very inadequate public services. And in the competition for the next phase of economic development it would appear that cutting taxes is priority item number one on the list.”
An interview with Tom Healy is one of the main features of the latest edition of Work & Life magazine. The magazine is currently being distributed to workplaces, and is available to view online here.
