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Workers 'on tax tipping point'

Average workers are reaching a tipping point over the amount of tax they can pay, experts have said.

With VAT going up 2% in next month's budget, the Irish Tax Institute has warned the Government that consumers are running out of room to keep giving to the exchequer.

In the last three years, families have seen take-home pay collapse by anything up to 613 euro after income tax rises, new levies, child benefit cuts, health insurance hikes and the abolition of childcare supplements are all measured.

Bernard Doherty, president of the Irish Tax Institute, said there had been a dramatic impact on people's ability to pay in just four budgets.

He added: "The capacity for people to bear more pain is running out as we approach an overall tipping point in terms of the money that can be taken from them in tax.

"We welcome the minister's commitment not to touch income taxes which would damage employment and the economy; however there is no doubt that 1.6 billion euro in tax adjustments next year would still be felt by Irish taxpayers at an individual level."

The Institute claimed that a single worker on the average industrial wage of 35,000 euro is 157 euro worse off since 2008 while someone earning 75,000 euro is down by 405 euro.

According to the figures, a married couple with two children and both working on average wages would be seeing a decrease of 315 euro.

The Institute also warned that losses soar to 613 euro for average earners with children when child benefit cuts, childcare allowances and general living expenses such as commuting costs are factored in.

Mr Doherty added: "The only real solution for increasing taxes is to broaden the tax base through job creation. We need an ambitious tax strategy that supports Irish indigenous business, drives sales and exports and creates the major employers of the future."

Press Association


From Belfast Telegraph