Noonan: FG to abolish USC because ‘emergency is over’

The Universal Social Charge (USC) is “easily the most hated tax in the country” and Fine Gael wants to abolish it because “the emergency is over”, according to Minister for Finance Michael Noonan.

While party also set out its plan to change inheritance tax and increase the home carer’s credit, but the event in Fine Gael election headquarters on Sunday was focused on the USC.

“Of all the commitments we’re making in this election, this is the central commitment in our tax policies. It’s a hated tax. It’s a socially divisive tax. It was introduced as an emergency measure. The emergency is over and now we’re going to abolish it.”

Mr Noonan was joined by Minister for Health Leo Varadkar and Minister of State at the Department of Finance Simon Harris at the event which was dominated by questions about confusion around the fiscal space.

“The comments that my figures don’t stack up, that’s not correct. I totally and completely stand over the figures. I didn’t generate the figures. They were generated independently by the Department of Finance,” Mr Noonan said.

“Anybody who objects to these figures, or casts doubt on these figures, they now have an obligation to put the evidence forward.

“Because assertions that I’m wrong cut no ice. Prove it. Prove it. Any of the media who are still asserting that the figures are incorrect, put the evidence under it.

“Because there is no evidence produced yet. It’s just a series of assertions,” he said.

“It’s not high maths. It’s simple arithmetic.”

Mr Noonan said Fine Gael planned to abolish the USC by 2020 as part of the party’s long term economic plan, but stressed this was not because the tax was unpopular.

Personal taxes were too high in Ireland, he said.

Removing the USC and getting the marginal rate of tax down to 44 per cent for middle and low income earners, and getting everybody under 50 per cent was very important, he said.

Mr Nooan said there would be a 5 per cent “claw-back” on incomes of over €100,000 to stop the cut benefitting the better-off from “very extravagant gains”, which would be unfair.

Mr Noonan said families with one earner were treated unfairly by the tax system. The home carer’s credit was increased in the Budget and would be increased again, he said.

“So the commitment is to increase the homecarer’s credit, to €1,650 from €1,000…We are also going to increase the income threshold for this credit to €10,500.

“In other words, the second person in the family home if they work they can earn up to €10,500 when we implement this and still get the single earner credit or, as it’s called in the tax code, the home carer’s credit.”

On inheritance tax, Mr Noonan said as house prices rose there was a risk of very large impositions falling on the shoulders of those that inherited family homes.

“So our commitment is to raise the exemption limit for inheriting a family home to €500,000, so that we keep it in line with movements in house prices,” he said.

He said he was available to serve as Minister for Finance again if the Taoiseach Enda Kenny saw fit to re-appoint him and Fine Gael was re-elected to government.