The Government seems determined to continue an income tax strategy in 2016 that denies the benefits of tax cuts to thousands of struggling middle income families, according to Fianna Fáil Finance spokesperson Michael McGrath who was reacting to comments by the Taoiseach that next year’s budget will again feature a cut in the top rate of tax.
“The most significant aspect of the income tax package in the recent budget was that thousands of struggling middle income families were virtually ignored by the government because of the FG fixation with the marginal rate of tax. An individual earning €32,000 gained just €174 from the income tax package, whereas an employee on €70,000 or more gains by €746. Similarly, a one income couple on €41,000 gained just €174 compared to a gain of almost €1,500 for a double income, high earning couple. It was clear that, in deciding how to divvy up the money available for tax cuts, families with a stay at home mother or father were effectively at the bottom of the government’s list of priorities.
“These skewed effects are a direct result of the government ignoring the needs of those individuals and families whose income lies just below the entry point to the marginal rate of tax. Changes to tax credits and a more radical reform of the universal social charge would have achieved a more equitable tax package for struggling families. However, the government cannot resist the headline of reducing the marginal rate of tax, however inequitable the result.”
Deputy McGrath also described the Government’s characterisation of the next election as a choice between FG and SF as an insult to the intelligence of voters.
“FG is clearly trying to pick a fight it believes it can win. FG knows that the bogus economic policies of SF will be found out when they come under real scrutiny at election time. The FG attempts to shape the election debate against this backdrop are pathetic, self-serving and insulting to a sophisticated Irish electorate. In truth, the only credible, centre ground party in opposition to the current government is Fianna Fáil. Between now and the next election, we will present voters with a clear alternative to the current government with policies on enterprise, education, health, tax reform and other areas, based on fairness, social solidarity and a vision for a recovering Ireland.
“Instead of moving firmly into election mode, the government should concentrate on governing and avoiding a repeat of the disastrous own goals that have dogged them in 2014.”