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Why do Irish people put up with such high income taxes?

If you earn €34,302 in Ireland, then every single extra euro you earn after that will be taxed at a marginal rate of 52%. Once you earn that much, the Government feels entitled to take more than half of every extra euro you earn.

In the UK, a person earning £34,302stg would pay an income tax rate of 20%. They would only hit the higher, 45% rate, once they reached £50,000stg. In California, the highest tax state in the United States, a person earning $34,000US would pay a tax rate – including state income taxes – of 30%. In Texas, with no state income tax, the rate would be 22%.

In France, income tax rates for someone on €34,300 are 30%. Again, the top rate of 41% only applies if you reach an income level of €74,000, with an extra top rate of 45% once you hit an income level of over €150,000.

Ireland’s marginal income tax rates on income are inordinately high, and, crucially, kick in at a remarkably low level of income. And yet, for some reason, we barely complain.

It is not as if we have little to complain about: You won’t find many Irish people who believe that we get world class public services in return for what we pay. Our greatest national challenges are nearly all financial: We have thousands homeless. We have an allegedly underfunded health service. We have a national debt that is an eye-watering quarter of a trillion euros. With the Government taking half of every additional euro from a person on the average industrial wage, where is all the money going?

But of course, it is cultural: The problem in Ireland is that most people who pay tax are almost embarrassed by the fact that they earn enough money to be robbed blind by the state. Many people would rather keep their heads down and say nothing, rather than face a baying mob saying “well isn’t it well for some, that you’re earning what you are”. Rather than complaining that our taxes are poorly spent, we are almost expected to be grateful that we are not one of the many victims of incompetent Irish governance.

Indeed, the tax debate – or, lack of a tax debate – is yet more evidence for the proposition that the most important value for Irish people is not, as is often claimed, kindness or compassion. It is respectability. It is not respectable to complain about our taxes, and therefore we do not. It is respectable to say we should “invest more in public services”, and therefore that is what most of us profess.

The issue is that that investment has delivered almost nothing. For twenty years or more, Ireland has been investing in public services. Inflation – the rate of decrease in the value of money – has been historically low for the past two decades. Despite that, our spending on the health service, for example, has more than tripled. In 1997, Ireland spent about €5billion on its health service. In 2021, Ireland will spend about €24billion on its health service. Has the service gotten five times better? Vast amounts of money has been frittered away on endless reform plans, and schemes, and giving money back to voters in the form of medical cards for children of parents who can afford their doctors already.

We pay extortionate rates of income tax, we continue to pay a Universal Social Charge that was introduced as an emergency measure to see the nation through the crisis, we pay PRSI, and – perhaps worst of all – we pay 23% in Value Added Tax on almost every purchase. VAT is a tax that targets the poorest amongst us, but we say nothing about it.

At the same time, most of our political energies on tax are expended on ensuring that we protect a corporate tax rate of 12.5%. Now, there is no reason to charge corporations more, and that is not my argument. But it is worth wondering how we arrived at a position where it is seen as more politically important to give tax relief to facebook, than to families.

This really is not a political problem, either. It is a cultural one. Ask a politician, and they’ll tell you, straight out: There are no votes in lower taxes. Nobody wants to be seen to demand them. People would rather stay quiet than admit that taxes hurt them, because they are afraid to be seen as greedy.

But what if it is not greedy to want to keep what you earn from working? And what if, as citizens, we are actually letting the country down? After all, when you don’t complain about taxes, the Government has no particular incentive to be careful with its money. When they are not under pressure to keep income taxes low, the cost of each scandalous mis-spending of money becomes less and less.

In any democracy, the voters usually get what they want. In Ireland, when we fail to do our job as voters and complain about the failures of the Government, and the robbery they persist in perpetuating on workers, we can’t be surprised when that robbery continues.

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