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MINISTER FOR FINANCE Paschal Donohoe has announced a reduction in rates of the Universal Social Charge (USC) and a rise in the point at which you get charged the higher rate of income tax.
He said that a “system where those earning an average wage are charged the higher rate of tax is unfair”.
“We cannot hope to remain competitive if someone on a relatively low income and who decides to work a few hours overtime has nearly half that extra money taken in tax,” the Minister said.
The entry point for single earners to get charged the higher rate of tax will increase from €33,800 to €34,550, a rise of €750.
This means that anyone earning under €34,550 will only be charged the normal rate of tax, while those earning over it will see a slight reduction in the tax that they pay
The 2.5% rate of USC will reduce to 2%, and the ceiling for this new rate will increase from €18,772 to €19,372.
The 5% rate of USC, meanwhile, will reduce from 5% to 4.75%.
The top marginal rate of tax on income up to €70,044 will now be 48.75%.
The Minister also announced a €200 increase in the Earned Income Credit, bringing it to €1,150. He said the increase will benefit over 147,000 self-employed people generating economic activity in the country.
As well as that, Donohoe said that he would be establishing a working group to plan, over the coming year, the process of amalgamating USC and PRSI over the medium term.
He added: “A key objective of this group and, of mine as Minister for Finance, is that this process does not narrow the tax base but ensures that our personal taxation system is both competitive and resilient in the future.”
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People on the dole get more for doing nothing than those who work for it. Welfare state is alive and well.
@Jayo Breathneach:
People on “low wages” are also part of the problem, as they have the lowest taxes in the developed world and just got another tax cut. It’s middle income people getting shafted.
@Fred Jetson: Yes I don’t know why they cut USC by .5% for the lowest income earners. Someone on 18k already pays less than 3% in all income taxes. Could have just cut the middle rate by .5% and left it at that.
Whole budget is an insult to those who work and contribute to society. Leo is supposed to be our Thatcher? Pull the other one.
@Tristan Rowntree: well she didn’t have FF holding her back….
@Tristan Rowntree: I agree 100% this is a joke budget.
.25% off the higher rate of USC only ..gggggrrrrrrrrrrrr
@Nigel O’Neill: Can anyone do the maths on that?? surely it’s pennies and not pounds. Disgraceful altogether
@Nigel O’Neill:
There was no change to the higher rate of USC
@Nick Allen: I estimate most average wage workers will be between 12-32 euro better off a month. So it doesn’t even keep up with cost of living increases like rent & transport
@Kevin Higgins: It is not the job of taxation to increase your wage in line with cost of living changes.
@Nick too true..worse again..the 5% rate I was noting
@Reg: No but fair is fair, having the middle earners pay for everything is just ridiculous.
I’m giving up work and off to claim loads of Benefits!
@Maire: Very tempted to follow. The mental stress I’ve been under lately just isn’t worth it. What kind of life is this..
@Maire: see how that works for you.
So the PRSI which gives you nothing back, is now incorporated into the USC which was temporary but not temporary any more.
Some welcome changes for average wage workers.
@Paul: who are stuck with a 2hour commute largely because the only mortgage they could afford working in Dublin was in Louth! We need affordable housing, world class transport and top services. Not tax cuts which put more strain on services
Good to see a rise to the earned income tax credit and the standard rate cut off. That’s € 400 less income tax for me next year.
@Reg: meanwhile somebody who has never worked and will never work gets an extra €260…
@Owen Slattery:
When u put it that way it does appear a little bit of a leftie budget. I thought FG and Leo were meant to be more right and Thatcher like
“new rate will increase from €118,772 to €19,372.”
You would have thought someone at the journal would bother to proof read the budget day announcement stories…
The internet might explode when you publish €50 on a pack of cigarettes by mistake.
Will bet every media commentator on RTE and Newstalk will say this is rich persons budget….Actually this is more socialist that anything Jeremy Corbyn would ever have in British Labour party budget….
Throwing a few peanuts to the monkeys
Earth shattering stuff. Good man Pascal.
Hahahahahha. Thanks for the cheese. Time to retire I suppose.
So the 40% higher rate has now been increased from 40% to 48.75%. Anyone earning over 34, 550.00 thousand per year will now pay 8.75% more on the excess in PAYE alone .
@Isabel Oliveira: how do you figure that out?
@Isabel Oliveira: That 48.75% marginal rate includes income tax (40%), USC (4.75%) and PRSI (4%).
@Reg: Thank you Reg. I shall go and slap myself on the wrist now for being hasty , eh eh.
Whwn does it kick in?
@niall: usually 1sr January
@Paul: yeah thought that, was hoping for a few quid for Chrimbo
@niall: you need to lose a job for that……
@niall: Well it’s won’t be midnight, That’s for sure. It should have been .5% for both brackets. Temporary tax my h0le!
Jam tomorrow!
Sugar free jam though!
It leaves a bitter taste in your mouth!
Lol lol lol
have your say