Do we pay too much income tax in Ireland?


Fine Gael would plan to cut income tax if it got back into office after the next general election, Paschal Donohoe, the Minister for Finance said on Wednesday. Or at least it would increase the income level at which people become liable for the top 47 per cent rate. But do we pay too much income tax in this country? And is planning to reduce it a practical goal, at a time when there are so many pressures to increase spending?

What we pay – the facts: The income tax burden here compared with other countries has always been a point of debate. Recent OECD data provide some clarity. The OECD data have typically shown that the income tax burden here is lower than the international average. However, as UCC economist Séamus Coffey pointed out in a recent blog, the OECD has now decided to take a higher figure for the Irish “ average” wage. And this changes the outcome.


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