Ireland: Ireland’s tax system blamed for higher Guinness price

A pint of Guinness is 66 per cent cheaper in Spain and 21 per cent cheaper in the UK — with Ireland’s tax system blamed for its sky-high prices, The Irish Sun reported on November 8.

Economist David McWilliams is on a mission to find out why Ireland is so expensive compared to our EU counterparts, with everything from booze to buses costing more in Ireland than in other nearby countries.

In his new TV3 series, McWilliams examines exactly why the cost of living is so high in Ireland.

He said: “Why do Irish people, at the end of the month, feel like they’ve been fleeced? Why do people go away and constantly look at the price of things and wonder why it costs so much more here?

“Basic economics will tell you that when you make a product in Dublin at St James’ Gate, it gets more expensive the further away you go because of transport costs. But that’s not the case.”

Looking specifically at the cost of a pint of the black stuff, McWilliams found that it’s 66 per cent cheaper in Spain, 21 per cent cheaper in the UK, 15 per cent less in Germany, and 12 per cent less in Belgium.

Examining how Ireland compares with Germany overall, he found that Irish people are paying more for most of basic necessities.

A basic basket of food essentials costs up to one third more in Ireland than in Germany, while rental accommodation is around 40 per cent cheaper there. Internet, prescription drugs, internet and childcare also costs more.

German native Ursula Tipp said of the differences between Irish and German childcare systems: “You have a legal obligation as a county council to provide free or more or less free child care for children.

“In Hanover, northern Germany, on €30-40k, you pay €76 per month for seven hours (childcare). This is not the true cost, it’s a parent contribution. It’s a different approach but means there’s more money in your pocket.

“And nobody can be taxed more than 50 per cent of their income.”

Olivia Buckley, of the Irish Tax Institute, said that non-taxation of lower earners is pushing up rates for middle earners.

She said: “Forty per cent of tax comes from personal tax, made up of income tax and USC. When it comes to the lower income levels, they pay little tax because we’ve exempted a lot of people.

“Forty per cent pay no tax and 30 per cent pay no USC.

“There’s an argument they’ve been through a lot of austerity and pain. But what happens is then when you get to the average wage — €35k to 40k onwards — we jump up the international rankings at a very high rate.

“We’ve one of the highest marginal rates. The income tax we pay is up near Germany and Sweden at the higher levels but we don’t have their level of childcare.”

06 November, 2017