Business Irish

Friday 2 December 2016

Families to be hit hardest by tax hikes revealed in four-year plan

Charlie Weston Personal Finance Editor

Published 30/11/2010 | 05:00

FAMILIES face the prospect of larger income tax increases than single earners being imposed on them over the life of the Government's four-year plan.

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Figures supplied by the Government last week in the four-year plan, known as the National Recovery Plan, indicate the income tax changes will hit families hard.

The plan outlines that the net pay of a single person on €55,000 will fall by €1,860 over the life of the plan.

But for a couple with one earner on €55,000 the income tax changes will mean they will be worse off by €2,310, according to the four-year plan.

Tax expert Laura McTiernan of the Irish Taxation Institute said the higher tax loss for a married couple with one income was due to plans to lower the tax credits and planned changes to the tax bands.

Tax credits set out the amount of money you can earn before you have to pay tax, while the tax band sets out the amount of income that gets taxed at the lower 20pc tax rate.

Ms McTiernan said: "The married couple are entitled to a higher standard rate band and to more tax credits than the single individual.

Bands

"Therefore, reducing the bands and tax credits affects them more, and it is for that reason that the loss will be greater for them. They should still pay less income tax than the single individual."

A spokesman for the National Women's Council said the four-year plan paid no attention to the role played by women in the economy.

The council would be watching out for the specific details that will be set out in the Budget to see if there was a policy shift that would impact on women, whether they were working in the home or in the labour force.

A spokeswoman for the pressure group, Protest Against Child Unfriendly Budget (PACUB), said the tax changes outlined in the National Recovery Plan seemed set to target families more than anyone else.

The group, set up to oppose cuts to child benefit, said any move to hit families harder than other groups would be unfair.

Irish Independent

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