The 2011 Budget passed its first test in the Dáil last night, with the Government having a comfortable majority of 82 votes to 77 on the first vote on the measures introduced. The Budget hit taxpayers hard through a reduction of 10% in the tax credits and bands, a new consolidated social charge of 7 % and the abolition of the PRSI ceiling. This combination of measures will lead to significant tax increases for almost all workers, with more people paying at both the standard and the higher rate. Changes are shown here at a glance:-
Motoring.
Petrol duty up 4c per litre and Diesel duty up 2c per litre and car scrappage scheme to be extended for further six months.
VRT relief for plug-in hybrid electric vehicles will continue at up to €2,500 until end of 2012.
Reform of the Ministerial State car system will see the cost of this fleet reduced by a third over the next two years.
Pay.
Taoiseach to take €14,000 pay cut, with Ministers to take €10,000 pay cut and President’s pay to be reduced to a maximum of €250,000.
A cap on public service pay of €250,000 with a maximum of €250,000 salary for judges and a 10pc cut in pay for new judges.
A 4% cut on public service pensions above €12,000 per year.
All Social welfare payments to be cut by 4%.
Those on the new reduced minimum wage not be brought into the tax net and top marginal tax rate to be kept at 52% for all taxpayers.
Income and health levies to be replaced by single universal social charge.
Old Reliables.
No duty rise on cigarettes and beer.
Pensions and Child Benefits.
No reduction in State Pension.
A €10 reduction to child benefit, with an additional €10 reduction for the third child.
Education.
Third-level registration fees will rise to €2,000, but families with more than one child in college will continue to pay the existing fee of €1,500 for the second and subsequent children.
Corporation tax.
No change to our 12.5pc Corporation tax rate.
Residential Property.
TA 1% stamp duty on all residential property transactions up €1m with a 2% stamp duty on all residential property transactions over €1m and property-based tax reliefs to be phased out by 2014.
Travel.
Travel tax reduced from €10 to €3 from March 2011 and only to remain if the airlines do not use it to raise their charges.
Banking.
The DIRT rate on ordinary deposit accounts increased by 2% to 27%, while the DIRT rate on longer-term deposit accounts increased by 2%c to 30%.
Capital Acquisitions.
Base for Capital Acquisitions Tax is being broadened by reducing the tax-free thresholds by 20%.
A middle-income family now stands to lose as much as €300 a month. A couple with three children and a household income of €75,000 who contribute €4,500 to their pension annually will see their net income fall by €1,815, or €151.25 a month.
There can be little doubt that persons on the lowest rung of society in Co Tipperary and countrywide stand to take the greatest pain.
Leave a Reply