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Joan takes a veiled swipe at 'catchy' FG tax cut promises

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Joan Burton

Joan Burton

Joan Burton

DIVISIONS have emerged within the Coalition over the focus of future tax cuts after Labour Party leader Joan Burton suggested Fine Gael is trying to prioritise higher earners.

The Tanaiste said yesterday that a pledge to reduce the higher income tax rate sounds "catchy", and her party is instead determined to reduce the tax burden on lower and middle-income workers.

In what will be seen as a veiled swipe at Labour's coalition partner, Ms Burton said she is not interested in prioritising tax rate cuts for people earning more than €100,000.

The Social Protection Minister said the focus should instead be on low- and middle-income earners and families with children.

She added that she wants to look at introducing changes to the point at which people pay the higher rate. This threshold will rise from €32,800 to €33,800 next month.

"I can appreciate that for some people earning, say, €100,000 plus, reductions in income tax rates would be very attractive," she said.

"But I think that, in terms of boosting an economic recovery right around the country, we really do have to look at the point at which people enter the top tax rate. That's a difficult feature of our tax system."

Speaking after the announcement of a further fall in the Live Register figures, Ms Burton insisted that Labour and Fine Gael are "two different parties" and, therefore, have differing views on tax reductions.

But she distanced her party from what she described as "catchy" promises to reduce the higher rate of income tax.

This rate will be reduced from 41pc to 40pc next month, with a further rate cut promised by the Taoiseach in next year's Budget.

determined

Referring to the need to look at the point at which people enter the top rate of tax, Ms Burton said it was "maybe not as catchy as talking about reducing top rates".

"Actually, it gets the effective reductions to where they are needed most - people on low incomes and people on middle incomes and families with children," she said.

Fine Gael sources last night played down Ms Burton's remarks and said the two parties will set out separate stalls ahead of the next election.

"You need to remember that Fine Gael is also determined to look at things like the bands and thresholds, as well as rates. It's not like we don't want to assist people at the lower end," said one source.

Nonetheless, the remarks by Ms Burton suggest a level of unease within Labour over the continued focus on the higher tax rate.

A senior Labour source told the Herald that the Tanaiste's comments will be welcomed by TDs and senators, particularly with a general election on the horizon.

noconnor@herald.ie


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