Wednesday 18 October 2017

Budget to neglect squeezed middle

■ Business, landlords and farmers get lucrative tax breaks ■ USC cut worth as little as €100 a year to mid-income workers ■ Cigarette hike on cards, diesel also expected to go up

Finance Minister Michael Noonan. Pic Tom Burke
Finance Minister Michael Noonan. Pic Tom Burke

Niall O'Connor and Kevin Doyle

The Budget Day tax package will spread €330m so thin that most workers are unlikely to feel any real impact in their wallets.

Finance Minister Michael Noonan has compiled a plan which attempts to please businesses and farmers - but will see the so-called squeezed middle gain as little as €2 a week.

The Irish Independent understands he plans to reduce the two lower rates of Universal Social Charge by 0.5pc, to 2.5pc and 0.5pc respectively.

Mr Noonan is signalling that he will not reduce the 5.5pc rate which hits incomes between €18,000 and €70,000, although he may tweak the income thresholds for the different rates. Ultimately, the benefit to middle-income earners could be little more than €100 a year.

There will be tax relief for landlords and farmers - who will be able to set aside some of their income during profitable years that will be exempt from tax.

The minister told the Cabinet he also intends to 'Brexit-proof' Ireland by introducing measures such as a reduction in capital gains tax for start-up companies to just 10pc on earnings up to €10m.

The threshold for inheritance on property transferred from parents to children is to be raised to €320,000. Cigarettes are certain to go up, while diesel is also under threat. Details of the tax plan emerged against the backdrop of a massive row between Fine Gael and Fianna Fáil over the Budget.

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