Local Independent councillor, Michael O’Brien, has welcomed the increase in the standard income tax band from €33,800 to €34,550, announced this week by the Minister for Finance, Paschal Donohue, as part of Budget 2018.
Earlier this year, Cllr O’Brien tabled a motion at Municipal District level calling on the Minister for Finance to increase the standard income tax band.
“Much of the talk had been about the Government reducing the tax rates, but I believe that addressing the standard tax band is a more effective way of putting more money back in the pockets of working people,” Cllr O’Brien said this week. “I subsequently wrote to the Minister during the summer calling for the standard band to be increased from €33,800 to €40,000. I was pleased with the positive response I received from the Minister, and I’m happy to see that the Government have made a positive step in this week’s budget.”
Cllr O’Brien added that while he would have preferred a higher increase, the announcement is still a step in the right direction.
“We must always incentivise work and reduce the tax burden on the working person,” he continued. “The fairest way of reducing the tax burden is by widening the tax band rather than reducing the higher rate of tax. Increasing the standard rate band enables more income to be taxed on the lower rate.
“We are seeing the cost of living increasing, with increases in costs such as motor insurance, public transport, rents, medical expenses, back-to-school costs, and, in some cases, property taxes. Widening the tax bands is much fairer than reducing the higher rate of tax. Reducing the higher tax rate gives more benefit to the better off, where I believe that we must focus on reducing the tax burden where lower incomes derive the most benefit.
“This is a positive first step towards putting more money back in the pockets of working people. I hope the Government will continue to increase the standard tax band in future budgets.”