Tax burden falls below 50pc on middle incomes
Published 05/10/2015 | 02:30
Middle-income earners will pay less than 50pc tax on their salaries for the first time in six years, the Irish Independent can reveal.
Every euro earned above €33,800 is currently hit with the marginal tax rate of 51c.
With just over a week to go to the last Budget before the General Election, the Government will lower the total tax rate to at least 49.5pc - and possibly 49pc.
The reductions will be targeted at middle-income workers earning between €33,000 and €70,000. The Budget is not yet finalised and there is a strong desire within both Fine Gael and Labour to deliver a 2pc tax cut, should the numbers allow it.
A 2pc cut would see those earning €70,000 more than €1,000 better off. Those on €50,000 would be €650 better off and those on €35,000 would be €350 better off.
Government sources said there was a "strong desire" to reduce the tax burden on middle-income earners as low as 49pc, if this proves achievable.
"It is now just seeing what is achievable in the final shake-up of the numbers," one senior source said last night.
The unpopular Universal Social Charge is set to be the focus of the Government cuts.
Finance Minister Michael Noonan is looking at a cut to the 7pc rate, while also considering raising the entry point at which people start paying the USC.
"We would love to do a 2pc cut, but certainly at this stage we are looking at a 1.5pc cut," said one well-informed source.