Renua plan would leave minimum-wage earners worse off, Creighton admits

Renua plan would leave minimum-wage earners worse off, Creighton admits

Renua leader Lucinda Creighton has admitted her party's new tax proposals would result in those on the minimum wage being marginally worse off.

Renua is proposing a new flat rate income tax of 23% which everyone would pay on all income, but those on welfare and lower income would get tax rebates on a sliding scale in return from the state.

Ms Creighton said those on middle and higher incomes would gain more disposable income under the plan and would stimulate the economy with their increased spending power. She acknowledged those on the minimum wage would earn less but had the capacity to increase their earnings by working more hours.

She said the plan rewarded work.

"The rewards do not diminish the harder you work - quite the opposite…You will keep a greater proportion of your earnings (77%)," she said.

The proposal would involve the abolition of USC and PRSI and the current marginal rate of tax. For the first three years, those on social welfare would retain their payments.

"There's a very, very slight reduction for people on the minimum wage - but an extra 10% (in take-home pay) in earnings, so that's the incentive," she said.

"It's about saying that for employers there's an incentive to pay more, and for workers there's an incentive to either work harder, work longer and achieve those pay increases.

"Those pay increases benefit people at a rate of 77c in the euro" she added.

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