Income tax

Green Party among those opposing proposed 30% income tax rate for budget – The Irish Times

A plan to introduce a new 30% income tax rate is facing opposition within the Green Party, with sources calling it impractical and unworkable, The Irish Times have learned.

Tánaiste Leo Varadkar first floated the idea earlier this year and it was included in budget options papers produced for the government by officials which were released last week.

However, the plan faces internal opposition, including from the Greens, who are concerned about the feasibility of introducing it this year and the impact on less well-off households.

A senior Green Party source said it was ‘not a workable or practical suggestion’ for this year’s budget, and also raised concerns about the impacts on equality. “What it appears to be is a discount for high-income earners,” the source said.

The plan outlined how more than a million taxpayers could benefit from the new rate, but that double that number would be burdened by the widening of tax brackets. It now appears to be on the verge of being abandoned in favor of this approach of widening and indexing tax brackets to wages, in line with the approach agreed in the Government Programme, the document which underpins the global policies of the Coalition.

Money change

Greens and Fianna Fáil ministers were quoted over the weekend to voice their support for the strip-widening approach. Some Coalition insiders are baffled by the Tánaiste’s support for the measure, suspecting he might back it in order to use it as bargaining chips in budget negotiations, or to set the stage for its introduction in a later budget. .

It was reported over the weekend that the Greens were open to extending fossil fuel tax breaks introduced to ease pressures on the cost of living, in exchange for progress on tax breaks linked to climate measures . These include reducing VAT on e-bikes and renovation materials, and extending reductions to public transport fares.

New electricity discounts, an extra week of social benefits and a Christmas bonus for family allowances are among the other one-off measures envisaged in a package to be put in place before the end of the year for an amount of around 1 billion euros. Housing Minister Darragh O’Brien is expected to seek tax relief for landlords and tenants in the budget amid an exodus of small landlords from the market.

The government is under pressure to act on the economy and for households, with coalition figures stepping up attacks on Sinn Féin in recent weeks, including the Taoiseach, which has branded the party’s policies ‘anti-business’ at the beginning of the month.

Speaking privately, another senior government source complained that Sinn Féin “literally opposes pro-business measures at every opportunity”, saying their policies would hurt foreign direct investment and small businesses in a backdrop of economic headwinds resulting from the pandemic, Brexit and the war in Ukraine. “People are not fooled; they can see through opportunism.