TAOISEACH LEO VARADKAR has said that he is not “hung up” on introducing a new 30% income tax rate, but that he wanted to see the standard rate cut-off point increased to €50,000.
The Taoiseach said that he wanted to reduce the tax burden for people on “very modest incomes” and that this could be done either by introducing a new middle tax bracket or increasing the standard rate cut-off point.
When asked if the 30% tax bracket would be introduced in Budget 2024, Varadkar said that he wanted to help people deal with the rising cost of living through pay rises and reducing income tax.
“That will help working people with the cost of living, which is really important. I believe that work should pay. And I think that in Ireland people have to pay the highest rate of income tax on very modest incomes,” Varadkar said.
“We’re getting to [a standard rate cut-off point] of €40,000 next year. I’d like to move that up. The policy objective that I have set is that we should get to the point where people can earn up to €50,000 a year without having to pay the highest rate of income tax.”
While he said that this would likely tax “a few Budgets”, he said that it should either be done through increases to the standard rate cut-off point or with a middle income tax bracket.
“I’m not hung up on that [30% income tax bracket] and I never have been. But that’s something obviously we’ll have to discuss at Government level between now and the next Budget.
“But certainly if the public finances allow it, I would like to see us continue on that road, so that you will be able to earn more without having to pay the highest rate of income tax.”
Varadar made the comments in a roundtable interview with political journalists last week.
He originally called for the 30% income tax bracket to be introduced earlier this year, with some Fine Gael ministers backing his call, including Social Protection Minister Heather Humphreys.
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