Taxing the Poor: The Politics of Income Taxation in Ireland

• Published in: Policy studies journal 2000-12, Vol.28 (4), p.815-842
• Main Author: Hardiman, Niamh
• Format: Article
• Language: English
• Subjects: Comparative analysis; Cooperation; Economic trends; Employees; Employers; Fiscal Policy; Government; Income Distribution; Income tax; Income taxes; Ireland; Low income groups; Payroll costs; Payroll taxes; Personal income; Political science; Politics; Reform; Social security taxes; Tax incidence; Tax rates; Tax reform; Tax revenues; Taxation; Transition economies
• ISSN: 0190-292X; 1541-0072
• DOI: 10.1111/j.1541-0072.2000.tb02065.x

Income tax is the largest single means of generating revenue in modern states, and its impact is felt by virtually all members of society. How it is levied is therefore a matter of the highest political significance. Yet countries vary greatly in the manner in which they allocate the burden of paying income tax. In Ireland, the profile of income tax has changed dramatically throughout the course of economic modernization, since about 1960. By 1980 it was generally agreed that employees were carrying too much of the burden, especially those on fairly low incomes. Steady growth in recent years has enabled governments to cut tax rates while still bringing in rising revenue. But shifting the distribution of tax has proved very difficult, and tax reform has tended to favor the wealthy most. This article draws on comparative political science literature to highlight the political and institutional variables relevant to explaining these trends. “The Chancellor of the Exchequer is a man whose duties make him more or less of a taxing machine. He is entrusted with a certain amount of misery which it is his duty to distribute as fairly as he can” (Robert Lowe, Viscount Sherbrooke, (Liberal), Hansard, 1870, April 11, col. 1639).