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If you worked in any of these countries, you could be due a Tax Refund

Mitt Romney’s remarks in an Irish context

#TaxTipsIreland

Now that we’ve looked at the UK side, we have taken a look at Irish statistics for comparison purposes. As our previous blog piece states, massaging of statistics can indeed bring interesting results.

Ireland saw an increase of 7.3% in net tax and duty receipts in 2011, resulting in total receipts of €34.2 billion. Similar to the UK, income tax is the main contributor. The new USC charge helped to boost these figures yielding circa €3.2 billion in 2011. Given the fact that less people are working and many of those who are working have experienced a drop in their gross incomes, any increase in income tax take is significant.

In 2011 there were approximately 4.7 million people living in Ireland. 21.1% of these people were under 15 and 11.6% were over 65. Of course, some individuals over 65 continue to pay income tax (We all remember the media coverage in relation to the taxation of DSP pensions earlier this year!) However, the majority of elderly people are outside of the income tax net, having contributed significantly during their working lives. Such people are outside of the income tax net only as a consequence of their low incomes.

Circa 430,000 people were reported on the live register in November 2011. This leaves us with 2.75 million people or 58% of the population. Anyone earning less than €16,500 in 2011 was outside of the charge to income tax. However, the USC was particularly harsh in 2011 bringing into the charge people earning as little as €4,004. We don’t have exact figures, however, if we consider the USC as an income tax it is most likely that the proportion of the 58% above who contributed in 2011 is quite high i.e. one could expect this to result in a similar figure to that of the UK of circa 12% of those of working age not contributing via the income tax system.

Again, if this was to be examined taking the Romney approach we would have a very different picture i.e. we would have circa 42% economically inactive in Ireland!

Also worth noting, when reviewing statistics, is the percentage of tax and duty receipts relating to income tax and USC. Income tax receipts in 2011 amounted to €13.86 billion and USC receipts amounted to €3.2 billion. This means that income tax and USC accounted for circa 50% of the total receipts for 2011! (compare this to the UK where only 26.8% of total revenue comes from income tax).Again, quite an eye opener, given the fact that such income is obtained from less than 50% of the population!

There will always be a percentage of the population unable to contribute via the income tax system as they are too young, too old or unable to find employment. Also, most modern societies will allow individuals to earn a certain amount before they are taxed. Therefore, it is quite likely that a statement such as Romney’s could be made in many countries.

It is probably appropriate to remember the statement made by Benjamin Franklin:

"In this world nothing can be said to be certain, except death and taxes."

And I am sure that those counted as non-contributing parasites due to the fact that they are not paying income tax will be painfully aware, one cannot fully escape the tax system as VAT is suffered on most purchases etc.

Again, hard to see what the motivation was behind such a statement which surely only served to antagonise at least 47% of the voters!