High earners 'benefit most from tax changes in the Budget'

High earners 'benefit most from tax changes in the Budget'

More than half the income gains of the last five years have gone to the top tenth of earners, a think tank has stated.

Think-tank for Action on Social Change (TASC) added that falling public spending will undermine the ability of public services to deal with social crises.

TASC policy analyst Cormac Staunton said: “While income tax and Universal Social Charge mitigate this, the regressive nature of the tax changes announced in Budget 2016 give the greatest benefit to higher earners, and undermine the ability of the tax system to deal with rising market inequality.”

The report said three-quarters of the pre-tax income gains in the last five years have gone to those earning €70,000 and above.

Key findings of the analysis include:

* A single earner on €70,000 will gain €902 per year which is 2% of their take home pay.

* A single person on a middle income of €25,000 will gain €227 for the year, about 1% of their take-home pay.

* A person on €35,000 will gain €377 – just over 30 per month or 1.3% of their take home pay.

In the run up to the Budget, TASC recommended focusing on increased public spending rather than on tax cuts.

Report co-author and TASC policy analyst Dr Rory Hearne said: “While there are some welcome announcements, particularly in the area of childcare, the increase in spending is insufficient to address the various social crises and austerity-related underinvestment.

“The spending allocations for future years show that there are no plans for significant increases and that spending will in fact fall as a proportion of GDP.

“According to the Government’s own figures, by 2019 we are likely to end up with the lowest government expenditure in the EU at just over 30% of GDP, against a Euro area average that will be closer to 50%.”

More on this topic

Michael Noonan: We will abolish USC if back in powerMichael Noonan: We will abolish USC if back in power

Government failed to take 'prudent financial path' in Budget 2016, says FACGovernment failed to take 'prudent financial path' in Budget 2016, says FAC

Group warns that parents may have to pay to hold child's place until free preschool startsGroup warns that parents may have to pay to hold child's place until free preschool starts

Taoiseach says abolishing USC will bring home young emigrantsTaoiseach says abolishing USC will bring home young emigrants


More in this Section

New taxes being considered as Government bid to reduce plastic useNew taxes being considered as Government bid to reduce plastic use

Sinn Féin: Taoiseach must take the lead on border pollSinn Féin: Taoiseach must take the lead on border poll

Man due in court in connection with Dublin drug and gun seizureMan due in court in connection with Dublin drug and gun seizure

Not having a second language hurts job opportunities, experts warnNot having a second language hurts job opportunities, experts warn


Lifestyle

Make-up artist Terry Barber reveals the secret to pulling off the bold lip look.This is how to make black lipstick work in real life, according to a catwalk make-up pro

Off to the Japan? After a trip to Tokyo, Ella Walker outlines the best things to eat between matches.These are the dishes to try if you’re going to Tokyo for the Rugby World Cup

It still surprises me as I am achingly private and do not enjoy being at the centre of attention.This Much I Know: Actor Aislin McGuckin

Bride Geraldine O’Donovan felt as wonderful as she looked on her big day — knowing she was supporting a cause close to her heart as she donned her wedding gown.Wedding on the Week: Supporting a cause close to their hearts

More From The Irish Examiner