BERLIN: The cost of implementing the Government’s tax plans could be €750 million, economic think-tank the ESRI said.
The ESRI has released an analysis of the Government’s proposals outlined in the Spring economic statement.
The coalition says it has €1.5 billion more in the State’s coffers than it expected – referred to as its “fiscal space”.
However, the ESRI said almost half of this will be spent if the Government pursues plans to keep welfare payments in pace with inflation and reduce the Universal Social Charge.
We do expect that there will be wage growth this year, between 1-2.5%,” said Tim Callan, a Research Professor with the ESRI. “If nothing were done in the budget, then average tax rates would rise, as people’s income creeps into higher brackets.”
The report also said a reduction in the 7% rate of USC, as planned, would have the greatest gains go the upper middle earners, though there would be some benefit for the middle.
