Friday 9 December 2016

Brendan O'Connor: It looks bad when the big guys don't share the pain

If you need people to take pain, you need to look at the psychology of it and bring them along with you

Published 09/12/2012 | 05:00

HERE'S a controversial one for you. The bulk of this Budget wasn't that bad for vast swathes of people. Pension and dole rates were not cut and the vast majority of old people won't in fact lose their medical cards, and a lot of the upper end of the squeezed middle – the €40k+ people who pay the vast majority of the taxes in this country – were expecting to be hit much harder with taxes. Most of them will just be hit with the €250 in extra PRSI, which isn't as big a blow to them as it is to the guy on 20 grand taking the same hit.

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Many of the €40,000 to €80,000 crowd are also secretly relieved to be losing only a tenner a month on their children's allowance when a lot of them think they should be paying tax on it. These are people who are used to paying a lot of tax, and an extra €500 a year lost on PRSI and children's allowance is not as bad as they were expecting, and it's not going to hit them as hard as the same €500 per annum loss will hit someone on half their wages.

High earners dodged a bullet on the extra 3 per cent USC on earnings over €100,000 and will essentially only lose the same €500 or so as anyone else. The ones affected most by this Budget were the ones on the margins, and they were affected by very specific measures.

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