Local Independent councillor, Michael O’Brien, has called on the Minister for Finance, Paschal Donohue, to increase the standard rate tax band to €40,000 ahead of the 2018 budget, rather than reducing the higher rate of tax.
The current standard rate tax band for a single person is €33,800, so PAYE employees pay the higher rate of tax at 41 per cent once they earn more than this amount.
Cllr O’Brien says the aim of the Government should be to incentivise work and reduce the tax burden on the working person.
“The standard rate band should be increased to €40,000 in the forthcoming budget, enabling more income to be taxed on the lower rate,” Cllr O’Brien commented. “We are seeing the cost of living increasing, with increases in costs such as motor insurance, public transport costs, 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, as some are suggesting. 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.”
Cllr O’Brien said many young workers and families are trying to save a deposit to purchase a home, but that after paying out for all of their living expenses they have nothing left.
“I am calling on the Government to increase the standard rate band from €33,800 to €40,000 in Budget 2018, which in my view is the best way to put more disposable income back into the pockets of working people,” he said. “This will increase consumer confidence and demand for our goods and services.
“I’ve made a submission to the Finance Minister, Paschal Donohue, and our local Minister of State, Kevin ‘Boxer’ Moran, on this issue. Hopefully, we will see this addressed in Budget 2018, giving a reduction in the tax burden for our working people.”