Funding Nursing Home Care - Tax or PRSI?

[rainyday]

Today's Irish Indo tells us that PRSI hikes considered to fund cost of elderly care. I find it strange that PRSI would be considered to be preferable to PAYE for raising required revenue.

The Indo report states

Other options were considered, including higher income taxation and taxation of inheritances - but the report concluded this latter proposal was unlikely to receive political support.

I can't see why PRSI increase is any more likely to get political support than a PAYE increase.

The problem with funding from PRSI is the impact of the PRSI ceiling (around 40k, I think). This means that salaries above this ceiling will be exempt. This means that low-paid will pay a much higher percentage of their income towards these costs, when compared to the higher-paid. This breaches the fundamental principle of 'from each according to his ability'.

 

[Tommy]

It is easier for a government minister or Taoiseach to say "we cut taxes" if they increase the PRSI burden on taxpayers than if they increase income tax...