Tens of thousands of taxpayers face being punished in Budget
SOME 64,000 taxpayers will be paying a higher marginal rate next year – unless the Finance Minister takes action to shift tax bands in the next Budget.
Rising wages in the economy will catapult over 64,000 workers into the higher income tax band of 40% from next year, according to Revenue Commissioner statistics published recently.
Another 57,600 workers will be pushed out of income exemption limits and will be forced to pay income tax for the first time. The Revenue report provides the figures in its analysis of tax trends in 2019.
Some of the data assumes a do-nothing approach from Finance Minister Pascal Donohoe who will deliver his Budget on October 9.
The natural increase in wages – up by more than 2% in the general economy this year – would then mean that 22% of all taxpayers are paying at the higher rate, up from 20% in 2016. Over one-third of higher rate payers forced out of the standard rate by salary increases would also find themselves paying a higher rate of USC.
Some 20,000 workers whose income will exceed €70,000 in 2019 will be affected, facing a rate of 8%.
Eliminating such traps has been a consistent aim of Taoiseach and Fine Gael leader Leo Varadkar, and his party is expected to give the issue further study at its pre-Dáil think-in at a Galway hotel next month.