• Direct taxes are progressive. Progressive taxes take income level into account. This means that the tax rate increases as income increases. For example, individuals with higher incomes pay more income tax than individuals with lower incomes.
• Indirect taxes are regressive. Regressive taxes are levied at the same rate regardless of income. This means that the tax rate increases as income decreases. For example, VAT is a set percentage, which means that individuals with lower incomes pay a bigger share of their income than individuals with higher incomes.
TAXES PAID BY INDIVIDUALS AND BUSINESSES The following table outlines which taxes are paid by individuals and businesses in Ireland.
Tax Income tax (PAYE) Pay Related Social Insurance (PRSI)
Universal Social Charge (USC) Value Added Tax (VAT)
