Sinn Féin wants to keep all three rates of hated USC in tax policy
Published 15/10/2015 | 02:30
Sinn Féin is the only party proposing to keep the three rates of the Universal Social Charge as a General Election looms.
The party is proposing raising the entry threshold from €12,012 to €19,572 which would exclude around 100,000 from the charge.
The Government reduced the top rate of USC by 1.5pc in the Budget and pledged to abolish the charge by 2021 if elected back into Government.
Fianna Fáil said it would be able bring an end to the USC in between six and eight years. Renua want to abolish almost all taxes and introduce a flat rate tax of 23pc.
The newly formed alliance of People Before Profit and the Anti-Austerity Alliance have pledged to eradicate USC for low and middle-income workers.
Finance Minister Michael Noonan announced cuts to all three levels of the hated charge.
Mr Noonan said the top rate would drop from 7pc to 5.5pc for income earned in excess of €18,668 and up to €70,044.
The 3.5pc rate will be reduced to 3pc for income earned between €12,012 to €18,688.
And the bottom rate of 1.5pc will drop to 1pc for the first €12,012 of income earned.
The USC cuts will mean the marginal rate of tax will be 49.5pc for all people earning under €70,444.
Meanwhile, the entry point for USC will increase from €12,012 to €13,000 which will result in 42,500 being removed from USC entirely.
From next year, 700,000 low income workers will now pay no USC.
The exemption from USC for those on medical cards or those over 70 earning less than €60,000 will remain in place
"The changes I introduced in Budget 2015 resulted in every worker in Ireland receiving increases in their pay this year; for many, the first increase in years. It also supported job creation across the economy," Mr Noonan said
"Focusing the majority of the available resources for tax reductions on low and middle-income families was the right thing to do last year.
"By reducing the marginal rate for people earning less than €70,000, workers kept more money in their pocket," he added.
Tánaiste Joan Burton said a middle-income family with two children would be almost €1,000 better off because of the USC cut and the €5 increase in child benefit.
Taoiseach Enda Kenny said the "top priority" in the Budget was to "keep that recovery going, while providing relief and better services for the Irish people".
"It includes steps like a cut in the USC, more nurses and doctors for the health service, more affordable and quality childcare, and ending the unfair treatment of the self-employed," he added.
"These are sensible, affordable steps that will keep the recovery going and bring its benefits to more households.
"This Budget is another step in our plan to keep the recovery going."
He added: "I fully intend to continue this progress into the next Government where the USC will be abolished in a phased and controlled manner by 2020.
"The aim of getting rid of the USC will be to support job creation and to make work pay."