Tax plan could see some taxpayers paying significantly more next year

Budget 2019 is on the horizon…

As we tick closer to Budget 2019, more information is being floated about as the government gauges public opinion on their plans for the next 12 months.

It’s thought that due to wage rises, thousands more people will end up paying income tax for the first time, while others will be pushed into the higher bracket at 40%.

In the latest document prepared in advance of the October budget, the Revenue estimates how much the public will pay in tax for the next year.

Revenue Commissioners show that almost 600,000 people will be in 40% bracket unless the income tax brackets are changed in October’s budget.

While others not currently paying income tax will be pushed into the lower 20% bracket.

The result would mean less in the pocket for lower and middle income earners and may encourage the notion that it’s more profitable to be on welfare than being taxed at 20% on a low wage.

It’s expected that changes will be made to the income tax brackets.

Several scenarios are proposed and discussed in the document, with one of them being third rate of tax of 43 per cent on earnings above €80,000, as reported by The Irish Times. The plan could raise an extra €433 million in tax funds in a year.

For example, someone currently earning €100,000 will pay €38,801 in income tax, but if a rate of 43% was introduced on earnings of €80,000 and more, they would pay €600 more in tax.

The document also states that consideration is being given on cutting the the 40% tax bracket by 1% and reducing it to 39% to aline it with rising wages or else increase increase the income tax band from €34,550 to a higher figure.