Sunday 25 February 2018

Fresh USC hope for squeezed middle

Finance minister Michael Noonan. Pic Tom Burke
Finance minister Michael Noonan. Pic Tom Burke

Kevin Doyle and John Downing

Finance Minister Michael Noonan has told Fine Gael backbenchers that USC cuts will help middle-income earners and not just the low-paid.

Earlier this week, he indicated to the Cabinet that he would reduce the two lower rates of USC by 0.5pc, down to 0.5pc and 2.5pc respectively.

However, Mr Noonan told a meeting of the Fine Gael parliamentary party this is not definite and that he is also looking at the 5.5pc rate, which applies between €18,000 and €70,000.

The minister gave colleagues a briefing on his Budget plans but signalled that he has not yet finalised his position.

Mr Noonan also ruled out a special tax rate for skilled emigrants who return home to work, only hours after Taoiseach Enda Kenny had conceded that it would be "unfair".

Fianna Fáil leader Micheál Martin dismissed as "bananas" a suggestion from Jobs Minister Mary Mitchell O'Connor that a 30pc tax rate could apply for a limited period to returning workers with skills in sectors like medicine, finance and IT.

Workers in such sectors could otherwise expect to pay an effective 50pc tax rate.

"Many Irish graduates are thinking, 'Who came up with this bananas idea?'" he said.

The suggestion by Ms Mitchell O'Connor was revealed in the Irish Independent on Tuesday.

But Mr Martin said the scheme would be illegal under EU law, as any concession open to an Irish citizen must also be extended to citizens of the other member states. He said it would acknowledge the privileged status of some jobs.

"No construction workers need apply," Mr Martin insisted.

The Fianna Fáil leader repeatedly asked if the Taoiseach found the suggestion as "discriminatory and unfair".

Mr Kenny frankly replied: "I would regard that as being unfair and discriminatory - of course." But the Taoiseach also argued that Fianna Fáil in government did discriminatory things which his Government was now trying to remedy.

Irish Independent

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