Labour backs higher social charge for top earners

Labour is backing plans for a top social charge for high earners as the party fights to reverse sliding support among its voters.

Proposals for the universal social charge to be raised to 10% for those earning over €100,000 as part of a “solidarity tax” in the budget were discussed by party members and ministers last week.

The move could raise €71m, and party members have given their support.

It comes as a Red C poll yesterday showed Labour voters were losing faith, with 59% of supporters saying the country was on the wrong track.

Labour sources last night confirmed there had been discussion at last week’s parliamentary party meeting about the possibility of increasing the social charge for high earners.

“All members are keen that the budget is as fair as possible,” said a source. “The overriding concern of all members is that the budget is fair.”

All individuals are liable to pay the charge at varying rates if their gross income exceeds €10,036 a year.

Those earning over €16,000 a year pay 7%.

There is a 3% surcharge on individuals who are self-employed and earn more than €100,000 a year.

Extending this surcharge to all workers could raise €71m, Finance Minister Michael Noonan has told TDs.

Labour TDs say the surcharge could be widened to all individuals earning six-figure incomes, and the rate increased.

Labour TD Joanna Tuffy told RTÉ: “It would send out an important signal that everybody is having to make a contribution to Ireland’s recovery. It’s particularly important that people do see that people on higher incomes are paying their share.”

European Affairs Minister and Fine Gael TD Lucinda Creighton was cautious about the plan. “Steps have been taken already to ensure that we gain the maximum revenues from wealth and from capital in this country and we have to weigh up the implications of taking further steps,” she said.

Opposition TDs questioned the logic of the proposal last night.

Social Party TD Joe Higgins said the move was a face-saving measure by Labour.

Sinn Féin’s Aengus Ó Snodaigh said the Government needed to go further than hiking up the charge and introduce a third level of tax for high earners.