Charlie Weston: Hey Mr Noonan, the put-upon coping classes need a break
Published 14/08/2016 | 02:30
The State's finances are in better shape than the perilous condition they were in just a few years ago, and the economy is racing ahead. The turnaround is largely thanks to ordinary, middle-income earners.
Ordinary people have rescued this State from the brink of bankruptcy.
Just look at the extra amount of income tax being paid by middle- and upper-income earners.
The sheer scale of the imposition on the coping classes became evident with the recent revelation that workers are now paying €5bn a year extra in income tax alone since the boom. This is despite there being fewer workers in the system.
Calculations by Dermot O'Leary of Goodbody Stockbrokers shows that income taxes in the last year amounted to almost €19bn - up by €5.2bn since the peak of the boom in 2007 and 2008.
Overall tax revenues over the past 12 months have returned to boom-era peaks. And income tax payments are now the biggest element of the tax take.
Mr O'Leary said this was proof workers are bearing the burden of the adjustment.
A series of adjustments to tax bands, the introduction of the universal social charge (USC), and the restriction and abolition of tax reliefs have combined to hike the amount of income tax paid by households. This means the average worker is probably paying an extra €4,000 a year in tax.
And this does not even capture the €8.45bn in pay-related social insurance (PRSI) that is levied on workers, another charge that has surged.
Workers are bearing the higher burden to run the State and pay for services like health and public sector wages since the boom in 2008. Add to this costs of up to €1.7bn a year to service the debt used to rescue our irresponsible banks.
Income tax is only one aspect of the burden being borne by ordinary workers. Property tax and the now-suspended water charges are also a new burden.
Working families have seen child benefit cut; levies imposed on pension payments in both the public and private sectors; higher levies on general insurance; increased levies on health insurance; and are being hit by major changes to PRSI.
And then there are pay cuts. Many workers have seen pay slashed by up to 10pc.
Many of those affected are heavily in debt, having overpaid for homes during the property bubble - so-called worst-time buyers. They are struggling with savage childcare costs, if both are working.
The blows have been relentless. More than any other sector, ordinary workers need a break.
Sunday Indo Business