Varadkar says middle earners pay too much tax and USC

Taoiseach Leo Varadkar speaking to the media at the National Economic Dialogue conference in Dublin Castle (PA/Damien Storan)

Taoiseach Leo Varadkar has said he believes middle-income earners pay too much in tax and the Universal Social Credit.

Addressing the National Economic Dialogue, Mr Varadkar also said an increase in the national minimum wage for 2024 will be a “further step towards achieving the living wage”.

The event involves a key series of pre-budgetary engagements with stakeholders including trade unions and employers.

Mr Varadkar hailed his Government’s economic progress (Damien Storan/PA)

Mr Varadkar said one of the best ways to help people out of poverty is through good employment.

“We increased the minimum wage this year by more than the rate of inflation projected for this year and we are phasing in a national living wage.

“It’s an important step towards eradicating low-wage employment for all workers.

Younger workers and new entrants are often those who bear the highest living costs like rent and the cost of raising a child. We have choices.

“Hundreds of thousands of workers will benefit directly and from knock-on increases.”

Mr Varadkar said improved terms and conditions can go “hand-in-hand” with employment growth.

He pointed to statutory sick pay, the protection of workers’ tips and improvements to parental leave.

“Wages have never been higher. And we have more jobs, not fewer.”

He said employers facing increased costs will be helped as these reforms are introduced.

Mr Varadkar said a new public sector pay deal will also improve incomes.

Govt hosts National Economic Dialogue 2023 at @dublincastleOPW. Great opportunity to hear from stakeholders & for them to hear from each other in advance of #Budget24. Great to have @Carol_Newman chairing this yr. Looking forward to productive day #NED23 https://t.co/7s5TufPutx pic.twitter.com/bxA7LYTdhN

— Paschal Donohoe (@Paschald) June 12, 2023

“This is, of course, a matter for negotiations but I would ask partners to consider focusing on entry-level pay and the earlier years in pay scales.

“Younger workers and new entrants are often those who bear the highest living costs like rent and the cost of raising a child. We have choices.”

He said the Budget will also feature a substantial welfare and pensions package to protect the incomes of the elderly, sick and disabled.

The Taoiseach and Fine Gael leader said current tax bands are unfair.

Mr Varadkar speaking to the media at the National Economic Dialogue conference in Dublin Castle (Damien Storan/PA)

“It’s simply not fair that average full-time workers are hit with the higher rate of income tax.

“And it’s not fair that the tax system erodes any pay increase they do get, or overtime worked.”

He said the Budget should make progress on lifting the point at which an individual pays the higher rate of income tax and it should also benefit all income taxpayers to ensure fairness.

“This will increase take-home pay and will help with consumer confidence and demand.

“It should also help moderate demands on employers for bigger increases.”