Photo: kthypryn on flickr
There’s were a few ways to deal with the Irish debt crisis: Bond restructuring, which would give the shaft to investors. Corporate tax reform, which would charge foreign companies. And then there’s the new austerity budget, which will be felt most by poor people.Details of the $8 billion austerity package are coming out this morning, with a preview in The Irish Times.
Part of the tax plan will reduce tax credits by 10 per cent and narrow the income tax band, forcing many to pay taxes for the first time.
Another part will reduce most social welfare payments by 5 per cent.
Fixing a banking crisis on the back of the people is the easiest way, or at least it seems to be the European way. The questions are how much will the Irish fight back? And what will austerity do to growth?
Other parts if the budget will include, via The Irish Times:
The elimination of some of the tax advantages for pensioners but no change in the State pension.
Cuts of about 5 per cent in the pensions of public servants up to 9 per cent for those at the top of the scale.
A cut of €10 a month in child benefit for the first and second child and a cut of €20 for subsequent children.
Abolition of the €75,000 ceiling for employee PRSI contributions.
Registration fees of €2,000 for third-level colleges. Families with more than one child in college will pay a reduced fee of €1,500 for the second and subsequent children.
The elimination of a number of tax shelters including a cut in the tax exemption for pension contributions.
An increase in the excise duty on petrol.
The abolition of stamp duty for those downsizing.
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