SF: Third rate of income tax would bring in €365m

on 02/10/2012 11:49:26

Opposition parties are urging the Government to reject proposals to cut child benefit in the budget.

Sinn Féin has said it is fairer to introduce a third rate of income tax rather than cut child benefit, even for wealthy families.

The Taoiseach Enda Kenny and senior ministers have said the Cabinet has not yet discussed possible cuts to the benefit.

However, a Labour Party statement issued yesterday through Dublin TD Kevin Humphreys said cuts should be considered for wealthy families.

But Sinn Fein's Aengus O'Snodaigh said child benefit must not be touched.

Mr O'Snodaigh said: "Sinn Féin rejects any further cut to child benefit. Child Benefit has already been cut by both the Fianna Fáil government and the current Labour/Fine Gael government.

"The cut is not necessary. The books can be balanced without it. If the Government wants to target high earners in the budget then it should go after their income. This would also be more beneficial for the economy.

"Sinn Féin has proposed a third income tax rate of 48% on income over and above €100,000 bringing in €365m."

The Sinn Féin deputy said that the return on the proposed cut in child benefit would return only €200m.

He said: "Although the minister is refusing to show us the detail of the new leaked report I am very concerned that the means test will be set at miserly threshold, possibly limiting the full payment only to those who are dependent on social welfare. This will create the very unemployment trap that the current child benefit system so effectively avoids.

"The department's own value for money review of child benefit published in 2010 demonstrates the dependence of middle income families on child benefit. It's analysis found that households in the 4th and 5th of ten income brackets fall below or onto the poverty line after paying their taxes and it is child benefit that then lifts them onto and over the line respectively."