Kells Community Rep Cormac Corr PC is calling on the Government to abolish the Universal Social Charge (USC) outright, arguing that a tax introduced during the economic crisis of 2011 can no longer reasonably be described as a temporary measure. Corr’s comments come following renewed calls for the abolition of the USC at local authority level, including a motion supported by Meath County Council calling for its removal. Similar motions have been brought forward elsewhere, including in Louth, where councillors have also called on Government to set out a clear pathway towards abolition.
The USC was introduced as part of the emergency measures taken during the financial crisis and has remained part of the taxation system ever since. Corr said that while the circumstances which led to its introduction were exceptional, its continued existence 15 years later should not simply be accepted as the norm.
“The USC was introduced in an exceptionally difficult period for this country. People were being asked to make sacrifices because the public finances were under enormous pressure, and there was an understanding that these measures were being taken in extraordinary circumstances. But we are now 15 years on. Fifteen years is not temporary. It is getting very close to permanent.”
“I don’t think we should lose sight of the reason this charge was introduced in the first place. It was a crisis-era measure. The circumstances that existed in 2011 are not the circumstances that exist today, and our approach to taxing folks should reflect that.”
Corr stressed that his call for abolition is not based on an argument that the State can simply disregard the revenue currently generated by the charge. He said any move to abolish the USC must be properly costed and implemented in a way that protects the public finances and essential services.
However, he said responsible budgeting should also involve examining taxes which have been retained for many years and asking whether they remain justified. “I’m not suggesting that you can make a tax disappear without accounting for the money it currently raises. Of course the figures have to be examined and the public finances have to be protected.
“But the question we should be asking is not simply ‘how do we keep collecting this money?’ The question should be ‘after 15 years, is this tax still justified?’
“There is a very big difference between saying that something is expensive and saying that it is unaffordable. Government has choices to make about taxation and spending, and workers should be part of that conversation.”
The standard USC rates currently range from 0.5% on the first €12,012 of income to 8% on income above the upper threshold. Corr argues that while the individual deduction may appear relatively small on a payslip, its cumulative impact on working households should not be overlooked.
“People are dealing with mortgages, rent, childcare, energy bills, insurance and the ordinary cost of living. Every deduction from a payslip matters. If Government is serious about putting more money into the pockets of people who work, then the most straightforward way of doing that is to take less of their money in the first place.”
Corr said TDs, particularly those supporting the Government, should use their influence in advance of the Budget. “There are TDs from Meath sitting in the Dáil, some are members of Government who have a direct influence over what happens in the Budget. I would encourage them to listen to what people are saying locally and to make the case for their constituents. “If we are serious about making work pay, then let’s actually make work pay.”
Corr also addressed Sinn Féin’s proposal to abolish USC on the first €40,000 earned by workers, which he said represented a significant step but did not go far enough. “I welcome any reduction in the tax burden on working people. If Sinn Féin or anybody else wants to put money back into workers’ pockets, that is a positive thing.
Corr, who has a background in the credit union movement alongside his community work, said the principle behind his position is ultimately about allowing people greater control over the money they earn. He said the debate around taxation can sometimes become overly complicated, but that the underlying question for Meath households is straightforward: how much of their earnings are they able to keep after tax? “It is time to axe the tax.”
