Leo keeps pushing 30% tax rate or the equivalent in breaks for f loating voters
TÁNAISTE Leo Varadkar is seeking to use next week’s Budget to push through the biggest tax break since the Celtic Tiger era in an attempt to win back floating voters.
The Fine Gael leader is still wedded to his proposed 30% tax band and will concede to a delay only if he gets the equivalent in tax breaks, senior party sources told the Irish Mail on Sunday this weekend.
The view was confirmed by a senior Fine Gael minister.
‘The 30% is what he is absolutely wedded to. If it doesn’t happen, he wants the equivalent value,’ they said.
‘He wants his pound of flesh and he wants it, or some variant of it, this year.’
As Fine Gael continues to slump in the polls, one minister warned: ‘It is being pushed hard. His view is we have to implement it. We need to send out a clear party message.
‘At the moment we are perceived as being the Government. That means we get the blame for everything the Government does.
‘We don’t have ideas people can relate to. This is one we can build on. It utterly separates us from Fianna Fáil and the Greens.’
Another minister said: ‘We want tax cuts. We have learnt from the past. We are taking this straight from the McCreevy playbook. In 1997 we offered reform of the bands that would have given the voters more and they voted for McCreevy because they understood tax rates being cut.
‘The people don’t have time for complications. Keep it simple. That’s what McCreevy did to us and now we are going to do it to them. Leo is only short of saying, “When I have it I spend it”. He’s the new McCreevy.’
The Tánaiste’s most recent public declaration on the issue was made on the floor of the Dáil last week in a carefully choreographed question during leaders’ questions on Budget 2023. Fine Gael’s Brendan Griffin asked the Taoiseach-in-waiting: ‘When it comes to the Budget, will serious prioritisation be given to reducing the personal income tax burden on householders?’
In reply, Mr Varadkar confirmed: ‘The income tax package in the Budget… will be the largest income tax reduction package in any budget for quite a number of years.’
Mr Varadkar assured his TD that the objective ‘is to make sure that people get to keep more of their own hard-earned money and especially that people on middle incomes do not see any pay increase, overtime or increment that they get, mostly being lost to tax, PRSI and the universal social charge (USC).’
The Tánaiste’s ongoing advocacy of the 30% rate comes against a backdrop of deteriorating relations between Fine Gael and Fianna Fáil over the attempt by Fine Gael to retain Paschal Donohoe as the Finance Minister.
Speaking to the MoS, Fianna Fáil minister Niall Collins dismissed the campaign before adding ‘a deal was done, that’s the end of it, now we move on to the big issues’.
‘The people will not thank Fine Gael if they get distracted by this game playing from sorting out their heating, fuel, jobs, childcare and the cost of food.
‘That is Fianna Fáil’s priority. Fine Gael has to decide what theirs is.’
There is growing anxiety though that Fine Gael’s coalition rivals will form an alliance of convenience to stifle the move. Fianna Fáil have been chilly in public when it comes to the 30% rate, but in a move that will elevate the fractiousness of their Fianna Fáil coalition partners, senior Fine Gael sources dismissed the Taoiseach’s unease.
One noted: ‘The power is already starting to move to Leo. When Micheál talks now the mandarins are looking at him thinking that in three months’ time your day is done.’
The shift in power means many in Fine Gael believe that despite the hostility of their coalition partners, the controversial 30% tax rate is still on. It is expected that next week will be decisive in shaping the fate of the Tánaiste’s ambitions.
One minister warned: ‘Fianna Fáil are mad if they oppose this.
‘Their voters, the ones we borrowed, are totally in favour of this. The Greens are utterly detached from the people.
‘The smarter FF people, though, privately are going bananas.
‘Either way, Leo wins. He will get the commitment to implement the 30% rate next year if it is too late this year so he can spend all of his first year as Taoiseach talking about it and if he doesn’t, then he will get a big fat tax cut.’
The scale of any tax cuts that would be needed to assuage Mr Varadkar is unclear with one senior Fine Gael source noting: ‘Something like that will not be decided by Paschal and Micheál. That’s a matter for the three leaders.’
Another minister warned: ‘That will be more secretive than the old Economic Management Council, it won’t be leaking down to mere ministerial level.’
‘Leo wants his pound of flesh’