HOUSEHOLDERS have now reached a point where they cannot bear more tax hikes in the Budget, experts warn.
A family with one income of €55,000 and two children is paying an extra €3,400 a year in taxes and levies since 2008.
A sixth austerity Budget next month will be too much for large numbers of people to cope with, the Irish Tax Institute said.
But next month’s Budget is expected to see the introduction of a property tax that is expected to cost a family with a €350,000 home €875 in tax in a full year. The charge is likely to be set at a rate of 0.25pc on the value of the home.
President of the tax body
Martin Phelan said more taxes would mean people will spend less, some will work less, while there will be a growth in the black economy.
“A small base of people are contributing vast amounts of revenue for the Government. It is getting to a dangerous level with fewer people paying more and more taxes with less income,” Mr Phelan said.
And an additional €2.25bn is expected in expenditure cuts. But the tax body said there should be an even greater emphasis on spending cuts, as it would be too damaging to the economy to tax income earners even more.
There is a limit to how much more can be imposed, the tax
body said. Changes to income tax, the introduction of the universal social charge, the removal of tax reliefs and child benefit cuts have meant those still in a job are paying vastly more tax since the economic downturn hit in 2008.
There are now 1.8 million income taxpayers, down 300,000 from 2007, the tax institute said.
Plans to introduce water charges and a property tax will mean there will have been 10 new taxes imposed on households in the last four years.
These include the income levy and the health levy, which became the universal social charge.
Also included are carbon taxes, the second-homes tax, the household charge, the domicile levy on high earners, the pensions levy on private sector retirement funds and the insurance levy.
Austerity has been an economic failure and a social catastrophe.
Domestic demand has collapsed. Five businesses closed down each day in 2011 – and this year’s figures are likely to be worse. 300,000 are unemployed, and many more are underemployed. Over 1.8 million people are left with less than €100 at the end of each month after paying essential bills. One in ten of us is living in food poverty. One million of our fellow citizens are living in deprivation as measured by the CSO – including over 335,000 children.
And these figures would probably be even starker were it not for emigration: in just one year – between April 2011 and April 2012 – a total of 46,500 Irish people left the country.
Behind each of these figures lie individual stories – and increasingly, those stories are of despair.
Communities throughout Ireland see the economic and social consequences of current economic policy every day. They see that austerity does not work – and they know that continuing the same policy will not produce different results.