This week, Minister of Finance Michael Noonan said the cost to the Exchequer of abolishing the USC for people earning below €100K is €2.025 billion. While 72 pc of the population would like to see USC abolished, this is a considerable reduction in the overall revenue the state brings in.
Our People's Budget analysis indicates how people would adjust tax in this year's budget. On average, people would like to see a reduction on income tax of €127m but this varies for people on various income levels. A reduction of income tax is the greatest cut in taxes followed by a reduction of €86m in the local property tax.
Corporation tax remains unchanged
Two in three people would not change corporation tax and of those who would adjust it, are split in their views with the net effect suggesting a mere €1.8 million increase in corporation tax revenue. This would suggest there is an uncertainty about changing our corporation tax, with 69% of people agreeing that "it is fair to give multi-nationals competitive corporate tax rates to create Irish jobs."
Those earning more want greater tax cuts
When we segment the population based on high, medium and low income earners, we can see the various demands on tax reductions. Medium and high income earners want a greater reduction in income tax - twice as much as low income earners. These two groups would also like to see reductions in property tax as they are more likely to own property.
Those with a higher income would like to see a reduction in Capital Gains tax rate, to unlock more of their investment wealth, while those on a lower income (older and retired) would like Acquisition tax reduced to pass on their estates to family members. The "squeezed middle" medium income level earners would like to see a greater reduction in VAT which would help them in day to day expenses.
With a small pot to provide tax cuts, it will be difficult for the Minister to please everyone.