About a third of all income earners – equating to 1.2 million tax units – are effectively outside of the income tax net. The higher 40 per cent income tax rate here is not and never has been the problem. There are several reports highlighting the lopsided nature of Ireland’s income tax system now gathering dust in the Department of Finance. The converse is that earners in the bottom 50 per cent of income distribution generate just 10 per cent of income tax receipts and 5 per cent of USC. Even more striking is that about one-third of all income earners – equating to 1.2 million tax units (which can be an individual or a couple) – are effectively outside of the income tax net courtesy of the State’s generous system of tax credits.

Source: The Irish Times December 27, 2025 09:02 UTC