Date Released: 26 November 2014
The SIPTU National Executive Council (NEC) has called for the abolition of the Universal Social Charge (USC). The charge, which was introduced as an emergency measure by the Fianna Fáil - Green Party government in 2011, is a regressive tax which makes no distinction between low and high income earners.
According to SIPTU President, Jack O’Connor, the USC “is at odds with the generally progressive character of the PAYE system in that a person on the minimum wage pays at the same level as those at the top of the income spectrum.”
The USC is expected to raise €4 billion in 2015 and plays a crucial role in generating revenues for the State.
“Accordingly, it cannot be abolished in one fell swoop without enormous consequences for those who depend on public services. Therefore, it would be necessary to replace it with other measures to generate revenue from wealth and those on higher incomes. Even in that context it can only be phased out gradually,” O’Connor said.
“Apart from re-distributing the burden so that the better off contribute more, projected levels of economic growth over the next few years, if they are realised, will offer the possibility of making progress.”
“What is needed is a plan to abolish the USC on a phased basis over a period of time. This would entail a combination of measures shifting a greater degree of the burden to the wealthy and those on high incomes on the one hand and deploying a portion of the benefits of economic growth each year on gradually reducing the level of USC in a progressive way that is focused on low to middle earners.”