Noonan: High earners will not benefit fully from USC abolition

Noonan: High earners will not benefit fully from USC abolition

Michael Noonan has said higher earners will be hit by new levies so they will not enjoy the full benefit of scrapping USC.

He has confirmed he still wants to phase out the charge entirely over five years, at a cost of over €3.5bn a year.

In reply to Dáil questions this morning, he has admitted that scrapping USC would be worth over €12,000 a year to someone earning the Taoiseach's wage.

However, the Finance Minister said that Fine Gael does not want high earners to get that much extra money.

"As in the previous Budgets, in which the benefits of USC and income tax cuts have been capped at €70,000 in earnings, it is my intention, should I be given the opportunity, to present further Budgets to claw back some of the benefits of the USC abolition for the highest earners," he said.

"I will be setting out the details of my party's position on this issue in due course."

But this morning Mr Noonan offered a clarification, when it was pointed out that the Taoiseach would save over €1,000 a month if the charge was scrapped.

Mr Noonan said: "Your arguments are based on the assumption that it's the intention of the Government, if re-elected, to abolish USC completely for all levels of income. That is not the position.

"In the last two budgets we capped the benefits at €70,000 and we will have a clawback so that these very high benefits will not accrue to high earners."

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