The Irish Taxation Institute also claims the Government’s continuing reliance on imposing more tax increases on the falling number of people at work was unsustainable.
The institute said that income tax rises, new levies, child benefit cuts, health insurance hikes and the abolition of childcare supplements have all hit households hard and dramatically impacted on their ability to take any more financial pain.
“The capacity for people to bear more pain is running out as we approach an overall tipping point in terms of the money that can be taken from them in tax,” said Bernard Doherty, president of the Irish Tax Institute.
A stark analysis of the budget measures since 2008 shows:
* A single worker on the average industrial wage of €35,000 is €157 worse off.
* Someone who earns €75,000 is down by €405.
* A one-wage couple with two children on €35,000 are €423, or 16%, worse off.
* A similar couple on €55,000 lost €283.
* Those on €75,000 have taken a hit of €428.
* A married couple with two children and both working on the average wage have seen a drop of €315.
* On top of the income tax and levies, child benefit for the parents of two children has been cut by €52 and the childcare supplement of €183.
While welcoming the Government commitment not to raise income tax rates, Mr Doherty said that taxpayers would still suffer because €1.6 billion in extra tax revenue needed to be found somewhere.
The institute also warned that the Government might have no choice but to seek to renege on the Croke Park Agreement if there were any further global financial shocks, which would drastically reduce tax revenues.
It also recommended that the proposed VAT increase from 21% to 23% should be held off until January 1 to avoid major administrative difficulties for retailers.
However, the institute predicted that the VAT increase was unlikely to lead to a major upsurge in cross-border trading because of the narrow difference in VAT rates with the North, poor exchange rates and the cost of travel.