Ibec calls for 5% reduction to top rate of tax

Employers have warned about election promises to abolish the Universal Social Charge, urging instead for higher earners to get a 5% reduction in the top tax rate.
Ibec calls for 5% reduction to top rate of tax

Ibec also warned against unrealistic pay level demands or increases in salaries, eroding the competitiveness of the economy, as parties prepare to set out their campaign pledges.

The employers’ body will today launch a guide to key policy promises of the major parties, but also voice concern that “populist election positions” risk repeating serious economic mistakes of the past.

The clamber of parties to slash the USC — which at one stage collected €4bn yearly for the exchequer — and therefore narrow the tax base ignores the lessons of the past, warn Ibec.

Politicians will today debate the pros and cons about reducing taxes, future investment in infrastructure, and what should be priorities as the country moves away from recession at an event hosted by the body.

Ibec chief executive Danny McCoy is expected to stress that reducing the overall tax income would leave Ireland vulnerable to future economic and global shocks.

Fine Gael leader Enda Kenny has said his party wants to abolish the USC, if returned to power, while Labour say they would phase out the levy but keep some kind of charge in place for those earning over €70,000.

Renua Ireland says a flat rate of tax at 23%, replacing all income taxes, would treat all earners the same.

Others, including Sinn Féin and People Before Profit, are advocating an increase in taxes for those earning over €100,000.

Ibec, however, does agree that some sort of tax reform is needed. There will also be calls from the employers group to reform how welfare is paid and for entrepreneurs to have their tax credits equalised with employees.

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