Here’s my budget – it could make Fianna Fáil look like Butch Cassidy and the Sundance Kid
9 October, 2010
Frankly, the gap between tax receipts and Government expenditure is so large that there will have to be both major tax increases and major spending cuts in December’s budget. So here is what I think should be done.
I haven’t costed the extra tax revenues or cost savings, because I don’t have the capacity to do so, but I am confident that the combined effect will comfortably exceed €4 billion, and perhaps much more.
FF are going down, so they may as well come out from their hiding place with all guns blazing, like Butch Cassidy and the Sundance Kid. It might even get them a few votes from those who are realistic enough to know that there are no soft options left.
- A new income tax rate of 50% for earnings over €100,000.
- A temporary 3-year income tax surcharge of 20% of everybody’s final tax bill.
- Bring anybody earning over €12,500 into the income tax net, at the lower rate of 20%.
- Increase VAT to 22.5%.
- Increase tax on petrol/diesel to UK levels.
- Child benefit: (a) phase in a reduction of child benefit to UK levels over 3 years; (b) abolish child benefit for high income earners; (c) abolish child benefit for fourth and subsequent children who are born after 2011.
- Introduce a new self-assessed annual property tax based on the aggregate of two measures: (a) based on house size, at a rate of €5 per square metre plus (b) based on site value, at a rate of 0.2%; against the total calculated in this manner allow a credit for each property of €500.
- Reduce all public sector pensions (both future and those in payment) by 30% of any excess over €50,000.
- Reduce all public sector pay by 30% of any excess over €100,000 (such a high threshold would probably prevent too much flak from the Croke Park Deal hardliners).
Ouch, that budget would hurt like hell, but it might allow us retain our economic sovereignty. Better sore than subservient.