Today’s exchequer figures show, once again, that the Minister for Finance has unprecedented resources at his disposal next Wednesday. These resources should be targeted at people on low and middle incomes. In terms of taxation, Labour is calling for a substantial increase in the standard rate band, and in the personal credit. This is the fairest way to improve living standards for everyone.

People on the average industrial wage are paying 48 per cent on any additional income they earn, when PRSI and levies are taken into account. The best approach to this problem is increasing the standard rate band, rather than a cut in the top rate of tax.

If, as has been widely speculated, the Government chooses to cut the top rate of tax, it will be targeting resources at the well off, rather than those on middle incomes.
A top rate cut delivers €2000 to a person on €250,000 and nothing to a person on the average industrial wage.

Cutting the top rate will also be a strong statement of the Government’s priorities. At a time when families are hard pressed on so many fronts, the resources involved in a top rate cut could be used elsewhere. There are urgent priorities in pre-school education, the provision of school buildings, transport and so on, which ought to be addressed.