Significant tax breaks required in upcoming Budget – Phelan

The rate at which people enter the top tax bracket must be changed significantly to offer greater relief to all as the cost of living continues to pinch, a Fine Gael TD has said.

Carlow-Kilkenny TD, John Paul Phelan, said with rising inflation worldwide and the fallout from the Russian invasion of Ukraine continuing to drive energy prices, every effort must be made to support people working hard to support their families, save for a home of their own, or trying to get by against the rising cost of living.

“Currently taxpayers enter the top tax bracket of 40% at €36,800. Everything earned up to €36,800 is taxed at 20% and everything above this is at 40%.

“This needs to be increased to at least €40,000 in the next Budget, and for future Budgets, we should be looking to increase the entry level, gradually, to the top tax bracket to €50,000,” Deputy Phelan said.

“When someone is rewarded for their work with pay increases, they should not have to pay the majority of the increase in income tax, USC and PRSI.

“It may sound a significant leap but prices of essential everyday goods are increasing, inflation will continue next year even if the current rate eases off, and a ceasefire in the war in Ukraine looks as far away as ever. Hopefully, events will change, but in the meantime, we must ease the burden on all here using levers within our control, and the tax system is an essential cog in this.

“Fine Gael will never apologise for standing up for middle income earners, as well as those on lower incomes. We have a good record of doing this and we want to do more.

“The Budget should also include increased universal childcare subsidies for all parents. The recent public transport cuts need to be made permanent and extended to private services nationwide. Rural bus services are extremely important in Carlow and Kilkenny, and assistance has to be offered to private bus commuters as well as public transport users.

“Fine Gael has shown how we can safely manage the country’s finances and stand by all, employees and employers, in a crisis – whether it is Covid or Brexit – and provide the necessary supports.

“We insisted on tax relief in last year’s Budget when no other party did. We are now determined to build upon the supports provided so far this year,” Deputy Phelan said.