If punitive USC tax rates are cut in the coming October budget, could income tax revenues rise after a time?
In a discussion on Newstalk this afternoon, politicians didn't mention the possibility that cutting punitive USC tax rates could lead to increases in tax revenues over time. Have Finance and Revenue done any serious statistical studies of the elasticity of income tax rates-the percentage tax revenues would change over time in response to a percentage cut in tax rates?
A big cut in USC could encourage many housewives to join the workforce, many emigrants to return home and small businesses to expand. For high income Irish emigrants abroad, Irish income tax rates must look punitive. For small businesses thinking about expansion in Dublin, there is a huge risk in taking on very high commercial rates and any income earned will be taxed at top rates on dividends paid out.
There is a case to be made for slashing USC on economic efficiency grounds alone, not because a cut would be popular.
In a discussion on Newstalk this afternoon, politicians didn't mention the possibility that cutting punitive USC tax rates could lead to increases in tax revenues over time. Have Finance and Revenue done any serious statistical studies of the elasticity of income tax rates-the percentage tax revenues would change over time in response to a percentage cut in tax rates?
A big cut in USC could encourage many housewives to join the workforce, many emigrants to return home and small businesses to expand. For high income Irish emigrants abroad, Irish income tax rates must look punitive. For small businesses thinking about expansion in Dublin, there is a huge risk in taking on very high commercial rates and any income earned will be taxed at top rates on dividends paid out.
There is a case to be made for slashing USC on economic efficiency grounds alone, not because a cut would be popular.