Fine Gael will impose a 5 per cent levy on individual incomes above €100,000 as part of a proposed wider reform of the taxation system, which includes the abolition of the universal social charge (USC).
Along with ending the USC, the party’s other key manifesto pledges are a commitment to create 200,000 more jobs by 2020. It will reduce the main 5.5 per rate cent of USC, which applies on earnings between €18,600 and €70,000, in the next budget. There is no specific date on when the 5 per cent levy on higher earners will be introduced.
If re-elected to government, the party says it will give local councils greater freedom to set property taxes.
The party’s manifesto, published yesterday, says water charges will only increase with inflation once the existing cap of €260 and €160 expires in 2018. But this will only apply until the end of the next government’s term of office in 2021 and is likely to be reviewed after that.
On property tax, the party says it will "increase local authority freedom to set the local rates" and freeze the amount of money diverted from larger councils, such as those in Dublin, to smaller, rural councils such as Leitrim or Longford.
Commercial rates
Property tax revaluation has been deferred until 2019 but Fine Gael says that councils will be entitled to keep 100 per cent of the tax following the future revaluation.
Currently, councils keep 80 per cent of the money they raise from property tax, with the remaining 20 per cent channelled into the Government-operated “equalisation fund”, which distributes it to other councils.
The income thresholds for the deferral of property tax for low income and mortgage distressed homeowners will also be increased, in line with recommendations made to the Government. A group will also examine the feasibility of replacing commercial rates with a site valuation tax.
Childcare
The thresholds for inheritance tax applying to gifts and inheritance from parents to their children will be raised to €500,000.
An extra 10,000 public-sector workers – including nurses, gardaí and teachers – will be hired.
The manifesto also commits to increasing the minimum wage to €10.50 per hour and introducing a “working family payment” that will supplement the income of a parent working more than 15 hours a week to ensure they receive €11.75 an hour.
A new childcare package adds eight more weeks’ paid leave, split between both parents, from 2018.
Fine Gael says the introduction of affordable, subsided childcare for children between nine months and three years will reduce parental bills by €2,000 a month and €50 million will be made available schools to provide after- school care for children aged five to 12 years.
