Taoiseach to signal sizeable USC cuts in next budget

The Taoiseach is expected to outline significant cuts to the Universal Social Charge in the next budget that will bring the marginal rate on middle income earners to below 50%.

Enda Kenny is making a speech at Grant Thornton this afternoon, where he will signal the budget intentions of the coalition – that cutting personal taxes will drive recovery similar to the way Ireland's corporation tax rate drove investment.

In his speech he is expected to say the coalition is committed to getting below 50% personal taxation, saying that just as the 12.5% corporation tax rate introduced in 1997 unleashed a new wave of investment her, cuts in personal taxes could drive us to full employment and attract back hundreds of thousands of young emigrants.

After the tax cuts in the last budget the marginal tax rate here fell from 52% to 51% - but that is still well ahead of the OECD average of 46%.

People who are classed as middle income earners - below €70,000 - pay that much tax on a portion of their income when the higher rate of tax is applied along with PRSI and the Universal Social Charge.

In the last budget the focus was on a cut to the top rate of tax as well as some reductions in the USC.

It is expected in the next budget most if not all of the tax cuts will be focused on the USC.