The Irish Income Levy

There are times when I, an American living in Europe, need to be reminded that I am in favor of social services and helping people to equal opportunities. I really am and I do.

However, I find that I miss hearing the other side of the argument. The ideologues and talking heads back home who make me so angry occasionally serve just such a useful purpose. Grover Norquist might be a nut (“I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub”), but the argument that government intervention isn’t always the answer to every societal ill isn’t a crazy notion and it is one that is less visible here.

Then came the pension levy…
A stop-gap measure enacted by the government to compensate for the dwindling tax revenues and the exploding cost of unemployment and banking bailouts. So be it. Times are tough and we all have to do our part.

Then my wife received her paycheck and I noticed something odd. The pension levy was being calculated on gross pay, but so was the PAYE (income tax withholding). Both taxes pretended the other didn’t exist. Income tax was being taken for the income which was removed by the levy…

“We are paying taxes on our taxes!”, I bellowed. “This injustice must not stand!”
I was turning a shade of purple and using dialogue better suited for a Superman comic in the 50’s.

I ranted and roared while my wife smiled calmly in that way that wives do, patted me on the arm and agreed it wasn’t very fair but that we should think of those who are worse off than we were. I was not mollified.

“Pack your bags we’re moving back to America! I will not abide such indignity!”
But she’s used to me, and went back to what she was doing before my Fox News moment.

Eventually I calmed down, and rational thought returned. The income levy was always going to be painful and I suppose an argument could be made that applying it after income taxes (and the various deductions for pension contributions, rent allowance, child credits and the like), would have enabled those on a higher income and thus with more capacity to save and use income tax credits to benefit.

Either way, for probably the first and only time in my life I felt a twinge of sadness that Grover wasn’t on my radio ranting away.


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