Which party will put the most money back into your pocket?
What the parties’ tax strategies will mean for your pocket
Of the eight parties contesting this Friday’s general election, tax strategies differ considerably. (Photograph: Niall Carson/PA Wire)
If you have yet to make up your mind as to who’ll get your number one vote come Friday, you may be interested in learning which of the many parties currently selling their wares will put the most money back in your pocket. Or rather which party is promising to put the most back in your pocket.
Well, rather than drowning in all the various party manifestos that have been published, the good people at taxback.com have done the work for you. They have prepared an easy to use calculator that clearly shows the impact on your take home income under the various parties’ proposals - if they were to be implemented in full.
And there are significant differences.
On an income of €15,000 for example, all the parties - with the exception of the Greens and Social Democrats - promise an uplift of €209.76 a year, largely due to decreased USC contributions. Sinn Fein for example, wants to exempt 227,000 people from the levy by raising the USC threshold to € 19,572.
Push the income up to €22,000 however, and it is Labour who is promising the electorate the biggest increase in their take home, with an additional €1,079.38 a year, compared with just €503 from both Fine Gael and Fianna Fail, and €774 from Renua.
Indeed Labour promises the biggest uplift in income, up to a threshold of about €40,000. The Social Democrats on the other hand are opting for increased investment, rather than tax cuts, and its emphasis is on reducing the cost of living for families.
At a level of €40,000, Renua, and its flat rate of tax of 23 percent, appears to offer the electorate the most, increasing the level of take home pay by €1,931, compared with the €1,493.06 on offer from Fine Gael, Fianna Fail, People before Profit and Labour. Bump up the salary to €50,000 and Renua promise to give you an extra €3,881 back, again ahead of all other parties.
Most of the parties are offering considerable savings up to an income limit of about €70,000 - €80,000, but thereafter the gains are more limited.
Fine Gael for example, will curb the gains associated with its plan to abolish the universal social charge (USC), by phasing out the €1,650 employee tax credit on earnings over €70,000. This will claw back €55 a year on every €1,000 earned over this level. It will also impose a new 5 per cent charge on income above €100,000.
Fianna Fail also has a limit on gains to be made, as it will only abolish the USC on the first €80,000 of income, thereby capping gains.
Labour will abolish USC on earnings up to €72,000 - but after this point it will adjust tax credits to hit higher earners. Under its tax plan, the USC benefit for those earning €120,000 or more receives will be completely cancelled out by a clawback mechanism, which involves the withdrawal of tax credits.
Sinn Fein will only abolish USC on earnings up to €19,572, and wants a new 7 per cent levy on individual incomes over €100,000.
But Renua’s flat tax of 23 per cent appears to considerably benefit higher earners. On an income of € 120,000 for example, it is promising € 25,709 more than the Anti Austerity Alliance & People Before Profit.
With all these figures some caveats apply. The calculation is based on the potential changes in income tax, USC and PRSI payable by a single person (ie property tax/water charges etc aren’t considered in the calculations), and Taxback. com notes that some assumptions have been made, based on information provided to them by the various political parties.
And one last point - the calculations are based on party promises and there is no certainty that any party can deliver on these.