Sunday 19 February 2017

Top earners main winners in recovery - Tasc

Published 09/11/2015 | 09:31

Construction sector has grown for each of the past 26 months
Construction sector has grown for each of the past 26 months

The ability of the tax system to deal with rising inequality has been undermined by Budgets that are benefiting the rich, the independent think-tank, Tasc, has claimed.

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In a new report issued this morning, Tasc claims that the top 10pc of Ireland’s earners have been reaping the biggest returns from looser Budgets as the economy recovers.

“Our research shows that as the economy recovers, more than half of the gains in incomes before tax are going to the top 10pc of earners,” according to Tasc policy analyst Cormac Staunton.

Tasc has been urging the Government to focus on raising public spending rather than cutting taxes. It argues that such a strategy would make the recovery “more inclusive” and create “a more equitable and sustainable economy”.

“While there are some welcome announcements (in the Budget), particularly in the area of childcare, the increase in spending is insufficient to address the various social crises and austerity-related underinvestment” said the report’s co-author and Tasc policy analyst, Rory Hearne.

He added: “The spending allocations for future years show that there are no plans for significant increases and that spending will in fact fall as a proportion of GDP. According to the Government’s own figures, by 2019 we are likely to end up with the lowest government expenditure in the EU at just over 30pc of GDP, against a Euro area average that will be closer to 50pc.”

Tasc said that taxpayers who are single and earning €70,000 a year have been the biggest winners from the past two Budgets.

It said that the latest Budget will see a single earner on €70,000 gain €902 a year, which is 2pc of their take home.

By contrast, a single earner on €25,000 will gain €227 a year, which represents about 1pc of their take-home pay.

Tasc has called for Ireland’s welfare model to be overhauled so that public services play a greater role, rather than what it said was the “current over reliance on direct welfare payments”.

 

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