Tuesday 21 January 2020

Editorial: USC cut could be easy option for Coalition

DECISIONS: Michael Noonan and Enda Kenny have a big role to play in convincing 27 governments to make the technical amendment to the Troika deal
DECISIONS: Michael Noonan and Enda Kenny have a big role to play in convincing 27 governments to make the technical amendment to the Troika deal

Tampering with the tax system is a dangerous exercise that requires understanding and dexterity.

Two aspects of the Irish income tax system grate with most workers. The first is that they reach the top rate of income tax at such a low income threshold. The second is that many, if not most employees, consider the introduction of Universal Social Charge (USC) as unfair and an imposition that robbed them of their disposable income. This in turn has caused havoc in the retail industry as people literally stopped spending and devoted spare cash to mortgages and paying down debt.

Now, as the good news seeps through and tax cuts of some sort or other have been flagged for hard pressed workers, the government is faced with the dilema of how it can meet the expectations of workers, while at the same time keeping its fiscal targets on track.

Successive governments have failed to deal with the issue of low-income workers entering the top tax bracket at such an early stage. We have been told changing this would require an overhaul of the tax system. Although it remains a well loved political aspiration, it is unlikely that anything will happen in this regard during the term of the present government.

But there does seem to be a mood to cut USC in the coming Budget as a way of rewarding PAYE workers for their forbearance during the austerity years, as a way of putting more money back into the retail economy, and, if one was cynical, as a feel-good factor for a government facing into a problematic election, if the current opinion polls are to be believed.

The Irish Tax Institution has declared that a cut in USC would benefit the widest number of workers.

It would put money back in the pockets of 2.2 million taxpayers and its effect would be quantifable, as against the complications involved in an overhaul of the tax bands.

Against that, the Minister for Finance Michael Noonan has recognised that the current entry level into the higher tax band needs to be addressed.

However, after grappling with the economic crisis in its early years, the current government may not have enough time and cutting USC may be the simpler option in the short term.

BCG jab shortage a risk for babies

Parents are constantly advised about the benefits of vaccination to prevent childhood disease, some of which can be fatal or disabling.

So it is unfortunate to confirm reports about a summer shortage of the BCG vaccine which is given to newborns to reduce the risk TB.

It is a disease that still holds a silent terror for older generations here who remember family and neighbours who died from it in sanitoriums until the advent of antibiotics in the middle of the last century.

The recent shortage was due to manufacturing problems but it begs questions about what kind of contingency measures are in place.

As we know, children who miss out on a scheduled vaccination can slip through the net. They will be offered "catch up" jabs but any break in the childhood immunisation timetable is disruptive.

Thankfully, cases of TB here are falling among all age groups but there is no room for complacency. Ensuring many parents keep their appointments for childhood vaccinations is a delicate exercise at the best of times.

Irish Independent

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