Middle-income earners are set to benefit from a lower tax-bracket which will see them keep more of their wages, a Cabinet Minister has signalled.
Public Expenditure Minister Michael McGrath has indicated that the Government is planning on introducing a new tax bracket in October’s budget.
Tanáiste Leo Varadkar has been pushing for a 30% income tax-band which would see more money in people’s pockets and less to the tax-man.
READ MORE: Cost of living: Pension jump touted, change to your Tesco, Lidl, Dunnes spend and mortgage boost
Speaking in the Dáil on Wednesday, Mr McGrath said that there would be a package of measures within Budget 2023 that would see changes to income tax brackets so people don’t climb into higher tax brackets.
He said: “There will be a need for a significant welfare package as well as providing a reduction in tax by way of ensuring that people do not continue to climb up into the higher rate of tax as they receive an income increase.
“What we don’t want is a situation where the constituent that you highlighted there ends up getting a pay rise or does some overtime and then he’s paying half of that in tax because he’s crept into the marginal rate of income tax.
“If you have a static tax system at a time of rising incomes, that is equivalent to an increase in tax,” he said to Independent TD Peter Fitzpatrick.
Minister McGrath said the country may be facing a "prolonged period of inflation."
He was responding to calls from Sinn Féin for an emergency budget amounting to €1.3 billion in new funds between now and the end of the year.
Ms McDonald said: "If it was those at the top that needed a bailout, Fianna Fáil and Fine Gael would be in like a flash, but when it is ordinary people that need a bailout package, your message is: 'Tough luck'.
Minister McGrath hit back and said if Sinn Féin's proposed budget for this year, as well as its previous demands for extra spending had been met, there would be no fiscal capacity to help families now with the rising cost of living.
He said: "The irony is not lost on you that if we had taken your approach, if we had taken your advice to spend €3.5bn more in the last budget, if we had taken your advice to do more every time we made an intervention in the last number of months, we wouldn't have the headroom or the capacity that you now call on us to use in order to do more.
"We may face a prolonged period of high inflation, we think it will peak in the number of months ahead but we cannot be certain of that.”
READ NEXT :
Former garda jailed for sickening 'alcohol-fuelled' assaults on women
Rat infestation found at child detention centre housing Ana Kriegel's killers
Hopes of justice for Michaela McAreavey dashed as linked case thrown out
Reality star Paddy Doherty says Joe Joyce 'did not intend to kill anyone'
Met Éireann predict surge in temperatures to arrive in early July forecast
