WITH THE BUDGET fast approaching, attention will inevitably turn to how the government uses the taxpayer funds at its disposal.
Many pundits have flagged the likelihood that personal income taxes will be cut, with Taoiseach Leo Varadkar recently claiming high taxes were “holding us back as a nation”.
In comments reported by the Sunday Business Post, he said Ireland’s income taxes were an obstacle to attracting jobs from London with Brexit looming.
It is expected that the top threshold for income tax will be lifted slightly in this year’s budget, while a small cut to USC is also expected.
The highest tax band currently kicks in at a relatively modest €33,800, above which the rate of tax paid jumps from 20% to 40% for individuals.
In comparison, the 40% tax rate doesn’t kick in until £45,000 (€50,870) in the UK, while the top, 45% tax band only applies to income over £150,000 (€169,575).
Nevertheless, the OECD’s latest ‘taxing wages’ report shows that combined income taxes and employee social contributions in Ireland are still below most EU peers for those earning two-thirds more than the average wage.
With that in mind, we’re asking Fora readers this week: Should income taxes be cut for higher earners?