Sinn Féin to propose €1.5bn tax package to abolish USC on first €40,000 of income

Pearse Doherty says the proposal would benefit more workers than raising the threshold for entering the higher income tax rate

Sinn Féin leader Mary Lou McDonald, with TD Pearse Doherty speaking at the Sinn Féin think-in in Malahide, Co Dublin (Clodagh Kilcoyne/PA)

Sinn Féin will propose a €1.5bn personal income tax package in its alternative budget, aimed at abolishing USC for the first €40,000 of income.

Speaking at the Sinn Féin think-in in Malahide, Co Dublin, on Wednesday, the party’s finance spokesman Pearse Doherty said the proposal would benefit more people than an increase to the point at which workers enter the higher rate of tax, expected to be announced in the Government’s budget.

Mr Doherty said: “We’re talking about a personal income tax package of in excess of €1.5bn that goes on abolishing the USC for the first €40,000 that people earn.

“That means everybody benefits from that as a worker. The problem with what Fianna Fáil and Fine Gael are talking about at the minute, is that if you’re on €40,000, you’re not benefiting in any substantial way, because the bands only kick in at levels well above that.

“So that’s not acceptable to us. It’s not acceptable that again we would have a large majority of workers left without proper support.”

Mr Doherty also accused the Government of having its priorities wrong in the budget last year.

He said: “They chose to give a quarter of a billion euro to developers. They chose to allow banks to make five billion euro profit and still pay less than 1% tax.

“They chose to allow the institutional investors to charge €3,000 rent in the city and not pay a penny tax.

“But, they also chose to leave workers worse off. They chose to leave people with disabilities work worse off.”

Taoiseach rejects USC proposal

Taoiseach Micheál Martin said that abolishing USC is not realistic.

Speaking at Government Buildings before Cabinet, he said: “I notice, Mary Lou (McDonald) did not mention income tax reductions for workers. We’re committed to reducing income tax for workers.

“There was a lot of absence this morning. In terms of, where would one get the money.

“I mean, to take out USC would cost an enormous amount of money and would reduce your resources then for workers and for those for us behind.”

Sinn Féin leader Mary Lou McDonald said that the party’s alternative budget will focus on workers and families.

Ms McDonald said the party is focusing on reintroducing energy credits and bringing down the cost of childcare.

She said: “We’ll talk about obviously spiralling energy costs, the fact that we still have so many households in arrears, and the need now coming into the autumn and winter to restore energy credits.

“We believe that needs to be given a priority.

“We’re focusing on reintroducing the energy credits. We will have proposals around childcare.

“We’re going to have a whole range of proposals, and of course we’ll focus also on public service provision in healthcare and infrastructural issues.

“We will have something around disability and disabled people, in particular, as well, because we’re conscious last budget they were particularly badly hit.

“In fact, they were as much as €1,400 worse off after.”

Government opposes return of energy credits

Finance minister Simon Harris argued that the reintroduction of energy credits is a temporary measure that will not help in the long run.

The Tánaiste said: “I think kind of untargeted, temporary measures, I think that people want us to do a bit better than that.

“I’m not in any way dismissive of the idea that assisting people right now with this Bill is an assistance in that moment of time.

“But then the next Bill comes, and then the next Bill comes, and then the next Bill comes.

“We do need to name that move on energy. There’s no doubt, but I’d rather see a kind of structural move rather than just temporary.” 

Sinn Féin is expected to release its fully costed alternative budget in late September or early October 2026, ahead of the Budget 2027 announcement on October 6.