Special report: what the main parties have promised on tax
Published 11/02/2016 | 02:30
The hated Universal Social Charge (USC) has become a major battleground for political parties as the election campaign is fought out on the doorsteps of the nation.
All of the main parties have pledged to make major reductions to the impact of the USC on workers' take-home pay.
But PRSI, motor tax, water charges and the burden on the self-employed are divisive issues that will play a big role in influencing where the electorate cast their votes.
The parties' varied tax policies will be a deciding factor for tens of thousands of voters who want more cash in their pockets after years of austerity.
And the USC - which has been described as penal, pernicious, hated, nasty, cruel and brutal during the course of its short life - embodies the lean years in the minds of many.
Little wonder that Fine Gael has pledged to abolish it by 2020 while Labour, Fianna Fáil and Sinn Féin all have their own plans for reducing the burden it imposes on workers.
Elsewhere, Fine Gael wants the maximum tax rate for middle income earners to be cut to 44pc.
Labour pledges to reduce the PRSI burden on workers earning between €18,305 and €36,608.
Fianna Fáil has a strong focus on entrepreneurs and the self-employed. Sinn Féin also wants to ease the tax burden on the self-employed, but pledges to raise €1.7bn in extra taxes. Individuals earning more than €100,000 would pay an additional 7pc tax on income above that.
Meanwhile, the parties differ on taxes to be raised on tobacco products, fizzy drinks, and gambling.
Several parties have also pledged to abolish the property tax and end water charges.
Universal Social Charge
FINE GAEL: Abolish the USC by 2020.
LABOUR: Abolish USC for the first €72,000 of income over the next five years.
FIANNA FÁIL: Abolish the USC for the first €80,000 of income.
SINN FEIN: Remove workers earning under €19,572 from USC net.
ANTI-AUSTERITY ALLIANCE/PEOPLE BEFORE PROFIT: Abolish the USC.
SOCIAL DEMOCRATS: Maintain the USC.
RENUA: Abolish the USC.
GREEN PARTY: Maintain the USC.
Tax measures for business
FINE GAEL: Pledge to cut the lower the rate of employers’ PRSI and widen the lower rate band. Pledge to lower capital gains tax for start-ups
LABOUR: Increase the capital gains tax entrepreneur relief to 15pc
FIANNA FAIL: Exemptions and cuts to employers’ PRSI for early stage companies which take on additional employees. Introduce a pre-approval mechanism for research and development tax breaks.
SINN FEIN: Introduce a new 15.75pc employers’ rate of PRSI on the portion of salary in excess of €100,000. Increase employee and employer PRSI bands in line with increased in the national wage. End artificial arrangements companies use toavoid tax. Simplify filing arrangements for corporation and income tax. Extend start-up refunds for entrepreneurs to the self-employed. Tax relief on beer production to support microbreweries.
ANTI-AUSTERITY ALLIANCE/PEOPLE BEFORE PROFIT: Increase employers’PRSI. Force Apple to pay “back taxes”. A “RobinHood tax on financial speculation.
SOCIAL DEMOCRATS: Implement a user-friendly web portal for businesses to file tax returns. Make research and development tax credits available for small businesses.
GREEN PARTY: Support the implementation of a financial transaction tax.
FINE GAEL: €2.5bn to be allocated to tax reform, cutting marginal and effective tax rates. Maximum tax rate for middle income earners (less than €70,000) to be cut to 44pc. Keep entry point into income tax system at €13,000. Limit benefits for high earners while reducing marginal tax rates below 50pc for all earners.
LABOUR: €2.866bn in tax relief measures. Reduce PRSI burden on workers earning between €18,305 and €36,608. Change the tax credit system to benefit low and middle income earners, while those earning over €120,000 do not benefit at all. Increase capital gains tax relief. Bring tax for self-employed in line with PAYE workers.
FIANNA FAIL: €2.92bn in tax relief measures. Equal tax treatment for the self-employed and PAYE workers within two years. Cut capital gains tax rate for entrepreneurs to 10pc on the first €15m of chargeable gains
SINN FEIN: Raise €1.7bn in additional taxes. Ease tax burden on the self employed, moving towards equalisation of self employed tax credit with the PAYE tax credit. Increase rates of capital acquisition tax and capital gains tax for passive investments. Examine the introduction of a wealth tax. Individuals earning over €100,000 to pay an additional 7pc tax on income above that level.
ANTI-AUSTERITY ALLIANCE/PEOPLE BEFORE PROFIT: Increase income tax for individuals earning over €100,000.
SOCIAL DEMOCRATS: Not in favour of cutting tax rate. Improve tax credits for the self employed. RENUA: Introduce a flat tax rate of 23pc, doing away with the two existing tax rates and a range of other taxes. Abolish PRSI. Abolish all tax credits. The self employed to get the same tax credits as PAYE workers.
GREEN PARTY: No change in income tax. Introduce a refundable tax credit system for those who don’t claim their full allowance
Other tax measures
FINE GAEL: Increase taxes in nicotine related products
LABOUR: Increase tobacco taxes. Introduce a tax on sugar sweetened drinks.
FIANNA FÁIL: Simplifying tax returns mechanisms for farmers. Extending stamp duty exemptions to farmers up to the age of 40 to incentivise the transfer of farms. Allow investment in co-op shares to be exempt from tax until the shares are later sold or the co-op converts to another type of business structure.
SINN FEIN: Abolish the local property tax. Abolish water charges Raise betting tax. Introduce a sugar tax. Tax relief on VAT for charities.
ANTI-AUSTERITY ALLIANCE/PEOPLE BEFORE PROFIT: Abolish water charges. Abolish property tax.
SOCIAL DEMOCRATS: Abolish water charges. Explore ways to reform local property tax to improve ability to pay. Ensure tax incentives for pension savings are limited to provide pensions no greater than €60,000 per annum. Expand tax breaks for lower income artists.
RENUA: Abolish motor tax. Abolish the TV licence
GREEN PARTY: Abolish the property tax, replacing it with a site valuation tax Introduce a tax on sugary food and drink