TASC: Budget 2015 'Triple Benefit' for the Top Third of Workers
TASC: Budget 2015 'Triple Benefit' for the Top Third of Workers
USC reduction for the lower paid is largely cancelled out by water charges
FOR IMMEDIATE RELEASE
Speaking in response to Budget 2015, TASC's Research Director, Nat O'Connor said: "The budget gave a clear indication that the main beneficiaries are the top third of those in employment. The income tax and USC changes give a proportional benefit to workers with incomes of €33,800 to €70,000, and the greatest gain goes to those with incomes of €70,000 or more. This does nothing to reduce income inequality in Ireland, and indeed it reinforces existing inequality.
"Only the top third of the 1.9 million people at work in Ireland get a 'triple benefit' of the USC changes combined with the rate and band changes focused on the higher rate of income tax.
"Of concern is that although USC changes do benefit lower income workers, these may be entirely cancelled out by water charges. Some low paid workers won't benefit from the water tax credit or the welfare assistance for water. Likewise, some people who are dependent on welfare will not receive any assistance with water, which is inequitable given that people on much higher incomes are now receiving a water tax credit in addition to tax cuts.
"The use of a higher rate of USC at 8% to cap the benefit of the reduced higher income tax rate is to be welcomed. But the fact remains that high paid workers on €70,000 gained more than four times more than those on the minimum wage and more than twice what those on average earnings received.
"The targetted increases in education, health, social housing and other areas also provide some welcome relief after years of disinvestment in public services. But instead of €500 million of tax cuts, more could have been done in this area," Dr O'Connor concluded.
ENDS
For further information, and to arrange interviews, please contact TASC’s Research Director, Nat O'Connor on 085 8269093 or noconnor@tasc.ie
Notes for editors
TASC is an independent progressive think-tank promoting action on social change grounded in evidence-based policy proposals. Our vision is of a flourishing society based on equality, social justice, transparent democracy and sustainable economic activity.
Website: www.tasc.ie
TASC's full commentary on Budget 2015, an Executive Summary and other budget analysis are all available here: http://www.tasc.ie/researchpolicy/projects/equality-budget/