It's simple enough really...cut the top rates of USC to bring the combined highest rates of tax/USC/PRSI to 49%.
The punter then keeps the majority of any incremental income which would have an important psychological effect.
And I stand by my suggestion that we cut the PAYE and Personal Tax Credits.
How will you fund the deficit in revenues?
But that is the case already is it not? The marginal rate, USC and PRSI may all add up to greater than 50% but the effective tax rate is less than 50%.
But this will increase the tax take from the people that you wish to see paying less tax.
Everybody should contribute something from their income.
Cut the 8% USC rate to 5%
I used to have this view, but now I am not so sure.
From a practical point of view, as social welfare rates are so high, if you tax low earners, you reduce the incentive to work.
Social welfare should always be set lower than net income...it should always be worth your while taking a job.
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