The Taxpayers' Perspective November 2010

1The Taxpayers’ Perspective


The Irish Government faces a difficult

balancing act over the coming years in

response to the economic crisis.

Irish taxpayers will be expected to bear

much of the burden of restoring the

public finances to a sustainable trend.

This special Amárach Research study

explores the current perceptions and

preferences of Irish taxpayers as the

Government prepares its 2011 Budget

and 4-Year Plan.

Balancing Act


Methodology

The findings reported in this study

are from the monthly Amárach

Research omnibus survey.

1,000 adults over the age of 15 in the

Republic of Ireland were interviewed

between 11th and 20th October 2010.

The quota-controlled sample

comprised 850 online interviews and

150 face-to-face interviews, the latter

to include groups with low levels of

internet usage.

The combined results have been

weighted to represent the total adult

Irish population.


1. Taxing Times

whose burden?

2. Could Do Better

value for taxes

3. Balancing Act

the big debate


1. Taxing Times

whose burden?


The Coping Classes

Although there are different ways

of measuring the distribution of

taxes (including direct and indirect

taxes) it is a little more

straightforward for workers in

relation to wages and salaries.

In our survey, we asked those

adults in employment to calculate

the share of their earning

deducted as taxes and other

deductions, and to say how much

more they would be willing to pay

in light of the impending budget.


Pay Up

The typical employee in our survey claims that he or she

pays just over a quarter of their wage or salary in taxes

and other deductions.

Men pay a higher percentage than women, and older

workers pay a higher percentage than younger workers.

Public sector workers, and employees who belong to

trade unions also pay higher percentages than others…


Taxing Incomes

Base = All Employees


Pay Up

Overall, equal proportions of Irish workers consider the

amounts deducted from their salaries to be ‘fair enough’ or

‘too high’ (49% vs 49%), and only one worker in fifty thinks

that their income deductions are ‘too low’.

Young workers are less likely than other age groups to

say that their income deductions are too high.

Public sector workers, and trade union members are more

like than private sector workers/non-members to consider

their wage or salary deductions to be too high…


Enough is Enough



Pay Up

The average employee would be prepared to pay an extra

3 percentage points in taxes on their incomes in response

to the Government’s budget requirements for 2011.

Only 16-24 year old employees would be prepared to pay

less than they currently have deducted, with the oldest

workers prepared to see the biggest increase.

There were otherwise few differences in the percentage

extra that workers in different sectors etc are willing to see

deducted…


A Little Extra



2. Could Do Better

value for taxes


Enough Already

Tax isn’t just about percentages

and burdens, it’s also about

fairness and value for money.

In our survey, we asked all adults

– employees and others –

whether the felt they were paying

a fair enough share of taxes.

We also examined their

willingness to pay more taxes (not

just income taxes on those in

employment), and attitudes

towards new taxes such as a

property tax.


Pay Up

Turning from the opinions of employees to those of the

total adult population, the majority of Irish adults (53%)

agree that ‘I pay more than my fair share of taxes right

now’. Only one in five disagrees.

35-44 year olds are more likely to agree than other age

groups, and men more than women.

Public sector workers are significantly more likely to agree

they pay more than their fair share than are private sector

workers, similarly with trade union members vs non-

members…


Unfair Shares

Base = All Adults


Pay Up

Over 6 in 10 adults disagree with the view that ‘people like

me should be prepared to pay more tax’.

There are few significant differences by age or gender,

though those in lower socio-economic groups (C2DEs)

are more likely to disagree than those in higher groups

(ABC1s).

As before, public sector workers are significantly different

from private sector workers (the former disagree much

more than the latter), thought there is a less significant

gap between union and non-union members…


Solidarity

Base = All Adults


Pay Up

There is a high level of disagreement with the view that

‘on balance we have a fair tax system in Ireland’ – 60%

disagree, and only 1 in 4 agree.

Those who report already paying the highest percentages

of deductions from their incomes (ABC1s, public sector

workers, trade union members) are significantly more

likely to disagree with this view than others…


Getting It Right

Base = All Adults


Pay Up

However, despite perceptions of unfairness and already

significant levels of deductions, there is considerable

agreement with the view that ‘people on low incomes

shouldn’t have to pay income tax’ – 63% agree with this.

Women and older adults over 45 are more likely to agree

with this view than others, whilst trade union members are

more likely to disagree with the viewpoint than non-union

members…


Less Fortunate

Base = All Adults


3. Balancing Act

the big debate


Don’t Look Down

One influence on taxpayers’

perceptions of ‘value for money’ is

their sense of how effectively and

efficiently government spends their

money.

In our survey, we asked all adults

whether they felt the Irish

government is spending their

money wisely.

Finally, we asked the crucial

question: what should the balance

be between tax increases and

spending cuts in the forthcoming

Budget 2011.


Pay Up

A large majority (64%) disagree with the view that ‘I have

a clear understanding of how the government spends

taxpayers’ money’.

Women and 25-34s are more likely to disagree with this

view than other adults, as are non-union members

compared to union members.

Curiously, public sector workers are as equally ‘unclear’

about government spending of taxpayers’ money as

private sector workers…


Some Misunderstanding

Base = All Adults


Pay Up

In light of the findings in the previous chart, it isn’t

surprising to learn that a huge majority (84%) disagree

with the view that ‘I trust the government to spend

taxpayers’ money wisely’.

Public sector workers and trade union members are even

more likely to disagree than their counterparts in the

private sector or those employees who not union

members…


Wise Heads

Base = All Adults


Pay Up

With regard to a property tax, a slim majority (51%)

disagree with the idea that ‘the Government should

introduce a property tax to fund our local authorities’.

Disagreement is higher among 35-44 year olds, private

sector workers and trade union members.

Agreement (1 in 3 adults overall) is highest among those

over 45 (who possibly remember local authority rates from

before they were abolished in 1977)…


Property Tax

Base = All Adults


Pay Up

In terms of ‘value for money’, two thirds of Irish adults

disagree with the statement ‘I feel I get more back from

government services than I contribute in taxes’.

Women are more likely than men to disagree, as are 35-

44s, ABC1s, and trade union members compared to their

peers.

Fewer than one in five (17%) agree with the statement,

higher among 16-24s and C2DEs…


Return on Investment

Base = All Adults


Pay Up

On the crucial issue of how the Government should meet

its objects for Budget 2011 and beyond, it is clear that

Irish adults think the greater part of the balancing process

should come from spending cuts, not tax increases.

The average proposed mix of tax increases and spending

cuts is 30% for tax increases and 70% for spending cuts.

There is remarkable consistency across all demographic

groups and employee categories in relation to this self-

proposed balance of tax increases and spending cuts…


A Little Extra

Base = All Adults


From Here to There


Crossing Over

Our findings provide some guidance to

those making difficult choices in the

weeks and months ahead.

Clearly there is a preference for tax

increases and spending cuts to support

the budget balancing act now before us.

However, most taxpayers feel they are

already contributing enough – so

convincing them to do more will require

considerable skill.

Greater clarity about how the

government will prioritise its spending in

the years ahead – securing better value

in the process – will undoubtedly help.


Amárach Research

11 Kingswood Business Centre

Citywest Business Campus

Dublin 24

T. (01) 410 5200 E: [email protected]

W: www.amarach.com B: www.amarach.com/blog


We are Ireland’s largest independent market research agency, in business since 1989.

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Cover image cred: http://www.contractoraccountants.com/2010/09/22/coalition-government-will-be-on-the-lookout-for-tax-evaders/

Appendix: About Amárach

3rd March 2009

Welcome to the latest edition of consumerforesight from Amárach Research. We

have set out to make consumerforesight a more interactive and informative research and planning tool for subscribers. Feel free to invite others to register

for our free eLetter on our home page.

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