Growing population lends scope for income tax cuts

AS IRELAND’S population grows to more than 4.5 million over the next three years, the Government will have scope for income tax cuts, Davy Stockbrokers argued yesterday.

A report entitled Beyond the housing shock — Why Ireland will grow faster than the euro area in the medium term, economist Rossa White states Ireland’s potential growth rate is 3.5-4% until 2011, comprising trend productivity growth of at least2% and labour force growth of 1.5%.

“Ireland’s personal income tax rates are still slightly above average. That is partly due to progressivity (caused by higher-than-average inflation and strong real per capita GNP growth). Ireland’s demographic structure and low dependency rate mean it has scope for further income tax cuts in the next few years,” he said.