19 December 2002 Edition
Time to tax the rich
Tax inequality is nothing new to anyone who lives in the 26 Counties. But how do you measure the benefits that have flowed to the super-rich in Irish society through the culture of tax avoidance created in loopholes and reliefs, leaving the wealthy paying tax bills considerably lower than those levied on the average worker?
A new study by the Revenue Commisioners has shown that Ireland's top earners pay tax at less than 15 per cent tax. The study was based on data from 1999/2000, a time when ordinary income tax rates were 26 per cent and 44 per cent respectively.
What is incredible from the Revenue Commissioners study is that the tax rates are in fact meaningless for high earners in the 26 Counties. About 12 per cent of top earners were paying less than 5 per cent tax. The top 400 earners took home tax allowances of €74 million.
So how is all of this possible? Well a lot of the super-rich are setting up partnerships to avail of incentives. Property based incentives made up more than half of the tax relief. Other reliefs used were through investing in multi-storey car parks and hotels.
In the run up to the December budget there were many leaks coming from the coalition government promising a much needed review of the tax code. However, it all came to nothing as on budget day Finance minister McCreevy announced some piecemeal changes to the array of allowances and reliefs on offer.
The Revenue Commissioners report makes the case for real reform even more of an imperative.
A new study by the Revenue Commisioners has shown that Ireland's top earners pay tax at less than 15 per cent tax. The study was based on data from 1999/2000, a time when ordinary income tax rates were 26 per cent and 44 per cent respectively.
What is incredible from the Revenue Commissioners study is that the tax rates are in fact meaningless for high earners in the 26 Counties. About 12 per cent of top earners were paying less than 5 per cent tax. The top 400 earners took home tax allowances of €74 million.
So how is all of this possible? Well a lot of the super-rich are setting up partnerships to avail of incentives. Property based incentives made up more than half of the tax relief. Other reliefs used were through investing in multi-storey car parks and hotels.
In the run up to the December budget there were many leaks coming from the coalition government promising a much needed review of the tax code. However, it all came to nothing as on budget day Finance minister McCreevy announced some piecemeal changes to the array of allowances and reliefs on offer.
The Revenue Commissioners report makes the case for real reform even more of an imperative.