Tasc report warns on social cost of five years of spending cuts

More than half of income gains have gone to top 10% of earners

Brendan Howlin and Michael Noonan present the budget last month: the regressive nature of their tax changes give the greatest benefit to higher earners, according to Tasc’s findings. Photograph: Eric Luke.

Brendan Howlin and Michael Noonan present the budget last month: the regressive nature of their tax changes give the greatest benefit to higher earners, according to Tasc’s findings. Photograph: Eric Luke.

 

Falling public spending will undermine the ability of public services to deal with social crises, a think tank has warned.

More than half the income gains of the last five years have gone to the top 10 per cent of earners, the Think-tank for Action on Social Change (Tasc) added.

Tasc policy analyst Cormac Staunton said: “While income tax and universal social charge mitigate this, the regressive nature of the tax changes announced in Budget 2016 give the greatest benefit to higher earners, and undermine the ability of the tax system to deal with rising market inequality.”

The report said three-quarters of the pretax income gains in the last five years have gone to those earning €70,000 and above.

Key findings of the analysis include that a single earner on €70,000 will gain €902 per year, which is 2 per cent of their take home pay; a single person on a middle income of €25,000 will gain €227 for the year, about 1 per cent of their take home pay; a person on €35,000 will gain €377 – just over €30 per month or 1.3 per cent of their take home pay.

In the run-up to the budget, Tasc recommended that the Government focus action on increased public spending rather than on tax cuts.