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Sunday 11 December 2016

USC will be abolished for those earning up to €70k, vows Joan Burton

The Tánaiste and Minister for Social Protection, Joan Burton, T.D. at the official launch of the Money Advice and Budgeting Service (MABS) Dedicated Mortgage Arrears Services. Picture credit; Damien Eagers 22/12/2015
The Tánaiste and Minister for Social Protection, Joan Burton, T.D. at the official launch of the Money Advice and Budgeting Service (MABS) Dedicated Mortgage Arrears Services. Picture credit; Damien Eagers 22/12/2015

Tax cuts for all workers earning up to €120,000 are to be proposed in the Labour Party’s election manifesto.

Tanaiste Joan Burton is to outline what she calls “progressive reforms” that will see the much-hated Universal Social Charge (USC) abolished for everyone earning up to €70,000.

All those earning above that threshold will benefit from that change too – but they will continue to pay USC on the portion of their income over €70,000.

Benefit

A new ‘claw-back’ mechanism will then kick-in at €100,000 and it will gradually reduce the USC benefit, but everybody earning up to €120,000 will enjoy some level of tax cut.

The latest move to revive Labour’s flagging fortunes comes in the wake of Fine Gael targeting their traditional working class voters with wage subsidies for those on low incomes.

Despite agreeing to a vote transfer pact, Labour and Fine Gael have now proposed vastly different changes to the tax and welfare systems.

Already Enda Kenny’s party has confirmed they want to abolish USC altogether – which collects around €4bn a year for the Exchequer – and introduce a State-funded Working Family Payment as an alternative to Labour’s Living Wage initiative.

The Labour Party has committed to a Living Wage of €11.50, hikes in the minimum wage that would see it rise to €11.30 and an extra €25 a week for pensioners.

Meanwhile, Ms Burton has moved to play down the significance of senior figures within the Labour Party positioning themselves for the leadership ahead of the election. With the party facing the loss of more than half its seats, Ms Burton has denied there is a rift with her deputy leader Alan Kelly.

Untenable

Sources within the party say that if the current poll ratings play out on Election Day, Ms Burton’s position as leader will be seen as untenable.

Already Mr Kelly has declared an interest in being a future leader, along with junior minister Ged Nash. Others such as Jan O’Sullivan and Alex White have refused to rule it out. However, Ms Burton has said she does not feel undermined by her senior colleagues who are openly linking themselves to her position.

“I suppose let 100 flowers bloom would be my attitude. We want people of ambition in the Labour Party,” she said.

“I plan to remain as Labour Party leader, obviously subject to what happens in the election. I’d be very confident from talking to people around the country, and particularly talking to Labour Party members,” she said.

The Dublin West TD, who faces a tough battle to retain her own seat, said that since taking over as leader from Eamon Gilmore in the wake of the local and European elections she has criss-crossed the country and received “a very positive reception”.

Asked about tensions with Mr Kelly, she said they have a “very strong, positive relationship”.

“I think we both bring different backgrounds, different experiences to the job, but I think the outcome is a very balanced team,” she said.

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