2020 Budget Pre-submission

BUDGET 2020 : Submission from Free Democrats Ireland “Freedom To Choose”

We believe that there must be three priorities in the upcoming budget.

1. This  budget must be a growth budget, that in uncertain economic times,  helps businesses and protect jobs without the need for state  intervention

       

2. That begins the process of restoring autonomy to taxpayers, so they can keep more of their own money and spend in a way that they choose for the good of themselves and their families

       

3. Begins the structural reforms required in the Irish state and economy, by making vital changes to taxation, welfare and state spending.

FDI propose the following :

Taxation    

• A commitment to no worker having to pay income tax on earnings of less then €20,000 per year including doubling tax credits to €3,500 per person or €7,000 for a couple.

      

• Increasing the entry point to top tax rate for a single person from €35,300 to €50,000 and €100,000 for a couple.

      

• Abolition of USC on earnings up to €50,000 and a flat rate of 4.5% for everyone else, with the intention of total abolition by budget 2022.

      

• Tax relief on private pension contributions, health insurance and child credits €1,000 per child, to be implemented and expanded to cover full contributions rates by 2025.

      

• Retention of current tax rates of 20% / 40% but begin the process towards a flat tax rate of 20% over the next five budgets.

      

• Begin the process of merging non income taxes into a single tax based on     Consumption, Acquisition & Transactions.

PRSI

• Begin the process of replacing PRSI with a reformed Social Trust Contribution 

• Employers  PRSI at 10% of employees wages, Employees PRSI at 5%, introduction   of a State top up of 5%. The PRSI / STC contributions to be ring -fenced and available for illness pay, pensions and welfare / income support payments.

Company Tax / Investment Tax / Duties

• Corporation Tax to remain at 12.5% , but a process of reducing this to 10% or 5%     for new start ups to be in place by 2022.

   
• Tax deductions for companies who create and contribute to employee pension, health plans and community development policies,    
      

• Ending of preliminary tax system, this will significantly help companies with cash flow.

• Ending of Inheritance Taxation

• Reduction in CGT from 33% to 25% and on gains of €500,000 increasing to     €1,000,000 by 2025, Entrepreneur rate of 10%, begin the process of  merging CGT into a Consumption, Acquisition & Transactions based system.  

• No increase in any Carbon taxes and an end to subsidies to fossil fuel based energy companies to commence in 2020.
  

• Subsidies to non-fossil fuel energy companies to be eliminated by 2022.

      

• Begin the process of merging VAT, Stamp Duty and other duties into a     Consumption, Acquisition & Transactions based system.

Local Property Tax / Commercial Rates

• LPT rates to be decided by Local Authorities based on value of property and ability to pay, capped at a maximum rate of 0.5% of an individuals income in a given year

      

• Commercial rates to be calculated in a similar way, also to take into account     number of employees and capped at a maximum rate of 0.5% of a company's profit.

Welfare, Education, Transport & Health Spending 

• Freeze current welfare rates at current levels as part of the introduction of a Minimum Basic Earning (MBE) system by 2025.

      

• State  Old Age Pensions rates to increase in line with inflation annually to an agreed flat payment level guaranteed by the state for both private and public levels to be agreed by 2025.

      

• By 2025 the process of phasing out public pension payments to begin in line with a flat payment level to be commenced.

      

• Freezing  of current minimum wage levels, introduction of a “new entry” level of €7.00 per hour to workers entering without qualifications or experience relevant to a particular job eg apprentices, wage levels to increase in line with experience gained at the discretion of the employer.

      

• Privatisation of Bus Eireann & Dublin Bus.

      

• Public Health spending to be capped at current levels, the creation of individual hospital area budgets and movement towards self funding to commence as part of an overhaul of the health system, moving towards an insurance backed paid at point of delivery approach.

General State Spending 

• All  increases to public sector and politicians pay to be scrapped and a complete review of pay rates to begin.

      

• All  tax cuts as mentioned above to be funded with matching spending cuts.

      

• A system of identifying all forms of waste and inefficiency in public spending to commence in 2020 and carried out by an agreed audit company.