Mayo councillor wants lower tax band for average income earners
BALLINROBE-BASED Fine Gael Councillor Michael Burke has called on the government to introduce a new tax band to help middle income earners.
He has called for income over the standard rate cut-off point of €36,800 to be taxed at 25% up to €50,000, replacing the current rate of 40%.
Councillor Burke commented: “People earning average wages are not on high incomes yet for far too long this is how they’ve been treated by the Irish tax system. I believe it is fundamentally wrong to have a situation where a person earning €40,000 per year is taxed at the same rate as someone earning €250,000 per year yet this is what has been done in Ireland for far too long.
“Currently Ireland generates the seventh highest proportion of revenue through taxation on individuals in the OECD with approximately 32.7% of the country's tax revenue being generated via personal income taxes.
“Individuals currently enter the highest rate tax bracket at €36,800 in a country where the average industrial wage is approximately €49,000. This has led to a situation where average income earners are being taxed as high earners on 24.9% of their income.”
He continued: “In order to combat this and alleviate financial pressure on these workers and families I am calling for the introduction of third tax band to reduce the number of people who are currently being taxed at the highest rate.
“I propose that a middle tax rate of 25% is introduced, starting at the current standard rate cut off of €36,800, that would be levied on all income up to €50,000 with any income over this amount being taxed at the current higher rate of 40%. The tax bands for married couples would also be increased in line with the above under the plan.
“For an individual an individual earning €45,000 per year this would lead to a reduction in their income tax payable of over €100 a month. Where an individual was earning €50,000 there monthly income tax payable would fall by €165 per month.
“I believe this is a necessary step to reduce the financial burden that has been placed on middle income earners.”