Thomas Molloy

Friday 1 August 2014

It's fair: Pensioners still pay less tax than workers

Thomas Molloy

Published 16/05/2014|02:30

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IT may seem petty and nasty to slap another tax on pensioners, but it makes sense. Even if pensioners begin paying USC (universal social charge) at the same rate as the rest of the population, they will still pay less tax than wage slaves on the same income.

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That's because pensioners don't pay PRSI and have different tax brackets to the working population. This leaves them with considerably more free income than most workers who must pay for the cost of getting to work as well as children, mortgages and the like.

Oh, and don't forget the free medical care thanks to medical cards, which are handed out much more often to the elderly. Or the free travel, cheap electricity and various other benefits such as TV licences and fuel allowances. That's on top of one of the most generous pensions in the world.

The latest population projections from the Central Statistics Office showed we had 532,000 people over the age of 65 in 2011. Thanks to modern science, that could reach 860,700 by 2026 and increase by a further 470,000 by 2046.

The Government has already taken one sensible measure to prepare for this by attacking the pension bill for young public sector workers. Civil servants beginning their careers will get pensions based on their average salaries rather than their final salaries.

Several independent examinations of the winners and losers of the Great Recession show that the young have suffered the most while the elderly have been largely unaffected.

To suggest that the elderly should be taxed more than anybody else is preposterous, but it is equally preposterous to shield any section of society from taxes at a time when so many are suffering and the country is borrowing more than €1bn a month to keep the lights on.

Irish Independent

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