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Taxing Issues

Could USC tear the coalition government apart?

Joan Burton thinks that the coalition will last the full term.

THE TÁNAISTE JOAN Burton says that the government will see out its term, despite differences on tax reform.

Speaking on RTÉ’s The Week In Politics today, Burton said that the Universal Social Charge had to be reformed over the next “four or five” budgets and that it was a more pressing concern than changing the top-rate of tax.

Burton said that the people of Ireland would see the benefits of the last Budget in the next year. However, reports this week suggest that Finance Minister Michael Noonan is more committed to cutting the top rate of tax than he is to abolishing the USC, which was introduced as a temporary measure five years ago.

“People will see [the benefits of Budget 15] in their pockets. The next budget has to follow the exact same principles. The USC is going to need reform over the next four or five years.

“The [top tax] rate is not the problem, the point at which people enter the top bracket in is. I believe that Fine Gael and Labour are in agreement.

“We already have an agreement. The deal is in focusing on low and middle income workers.”

USC or me

However, Burton could have problems within her own party on the issue of the USC.

Labour Party Senate spokesperson on Communications, Energy & Natural Resources John Whelan today called the charge a “red-line issue” and said that either it goes or he does.

“Any talk of tax relief for high earners while workers on the minimum wage or on the average industrial wage are still paying the reviled USC, which is supposed to be a temporary tax.

Tinkering with the tax code will not do, the USC must go. Let no one be under any illusion on this, either the USC goes, or I go.

“The people I represent are unequivocal on this issue. They have taken the hits in their pay and pensions; in their homes and with their families. Their message to me is unambiguous: ‘The USC goes, or you go’, and I am listening and intend to heed them.”

Poll: Should the top rate of income tax or the USC be cut in the next Budget?

Read: Facebook paid €2.3m corporate tax in Ireland in 2013

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