Taoiseach pledges to 'reduce taxes for middle income earners' over next three years

The standard cut-off point at which people start paying the highest rate of income tax is set to be raised for each of the next three years under new Government plans, writes Fiachra Ó Cionnaith.

Taoiseach Leo Varadkar revealed his intentions at the start of Fine Gael's two day annual conference this evening.

Speaking during a live TV broadcast from the Slieve Russell Hotel in Co Cavan tonight, the Fine Gael leader said his Government wants to focus "on reducing taxes for middle income earners".

Taoiseach and Fine Gael leader Leo Varadkar delivers his keynote speech at the Fine Gael party conference, at the Slieve Russell Hotel in Ballyconnell, Co Cavan. Picture: Lorraine Teevan/PA Wire

Noting last month's budget move by Finance Minister Paschal Donohoe to cut the entry point for when people start to pay the 50% highest rate of tax rate, Mr Varadkar said this reduction will be repeated in Budget 2019, Budget 2020 and Budget 2021.

"It's not fair that people on middle incomes pay income tax at the highest rate. That means the State takes almost 50% of everything you earn above that threshold, including any overtime you get, any pay increase you earn, or any extra hours you work.

"That's not fair, and we're going to change it.

"Fine Gael believes in rewarding work. So in the budget we raised the standard cut-off point, and we will do so again in the next one - and the one after that - and the one after that," Mr Varadkar said.

The commitment to cut the entry point for the highest rate of tax is likely to be welcomed by middle and high income earners who Fine Gael is dependent on to remain in power.


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However, it is likely to be heavily criticised by the Government's detractors who have repeatedly claimed the focus on these households means people in worse financial positions are being ignored.

With the threat of a snap general election and the end of the confidence and supply deal this time next year, it is also unclear how Fianna Fáil will respond due to the fact the opposition party - which plays a central role in any budget plans - has yet to be informed of the move.

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