Nearly half of Irish millionaires pay under 30% tax
IRELAND IS home to 620 millionaires but almost half of them pay less than 30 per cent income tax, according to new figures.
In the week when US president Barack Obama pledged to ensure that millionaires in his country would pay at least 30 per cent tax, the Irish figures show that only 42 per cent of millionaires here did so in 2009.
The same proportion of people (42 per cent) with incomes between €500,000 and €1 million were paying under 30 per cent, Minister for Finance Michael Noonan told the Dáil.
Slightly over half of those earning between €250,000 and €500,000 were in this tax bracket, while for earners between €100,000 and €250,000 the figure was over 90 per cent.
Tax fairness featured strongly in Mr Obama’s state of the union speech earlier this week, in which he proposed that “Washington should stop subsidising millionaires”.
Last August billionaire Warren Buffett revealed he paid a lower tax rate – 17.4 per cent – than any of the 20 people in his office, including his secretary. This inspired Mr Obama to propose the “Buffett rule” – “If you make more than $1 million a year, you should not pay less than 30 per cent in taxes.”
US Republican hopeful Mitt Romney had earlier revealed that he paid only 13.9 per cent on his 2010 income of $21.6 million.
Income in Ireland is taxed at the standard rate of 20 per cent and, after the first €41,800, at 41 per cent. However, many high earners are able to avail of tax reliefs.
As Mr Noonan pointed out to Labour backbencher Derek Nolan, the Irish figures are subject to a number of caveats. They do not take account of PRSI at 4 per cent and the universal social charge and its predecessors, which come to 7-10 per cent.
Mr Noonan said that, since 2010, restrictions had been tightened on high earners, who are however entitled to reliefs for health expenses and to standard tax credits. The figures relate to gross income, so that a married couple who are jointly assessed count as one taxpayer.
In total, 291 of the 620 people earning over €1 million are under the 30 per cent tax level. The figures show almost 2,500 people earn between €500,000 and €1 million, while almost 10,000 have incomes ranging between €250,000 and €500,000.