Estimating the Direct and Indirect Tax Contributions of Households in Ireland

Households contribute to financing the exchequer in a number of ways. Household’s direct tax contributions from earnings, through income taxes, USC and social insurance, are apparent; albeit that we tend to have greater knowledge of benchmark taxation rates (both effective and marginal) than the actual rates households pay taking account of entitlements to tax expenditures. Household indirect taxation contributions, through VAT, excise duties, levies, local taxes and charges, are less apparent.

Using data from the most recent Household Budget Survey, this paper estimates both the direct and indirect taxation contributions of households. The paper examines, singly and collectively, the direct and indirect tax paid by households across the income deciles, alongside the overall average household contributions. In establishing these estimates, the paper aims to provide a more comprehensive understanding of the distribution and composition of household tax contributions.

Keywords: Taxation, Households, Ireland.

Authors: Micheál L. Collins, NERI and Dara Turnbull, AIB.

NERI Research Seminar Slides available here.

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