Just how accurate are the newspapers’ crystal balls? With Minister Noonan due to take the stage at 2pm this Wednesday to deliver one of the most anticipated, and feared, budgets in living memory, speculation on the exact nature of the cuts has occupied the papers for the past week. But just who has had their cards marked and who is bluffing? Below we’ve put together a rundown of all the Budget 2013 news from the last few days. It will be interesting to see who is right and who is wrong.
That the tax will be levied on the self assessed value of the house (as opposed to site value) is agreed by all. The main points of contention are – a) Rate – 0.2% or 0.25%? b) Bandwidth - €50,000 or €100,000? c) Mansion Tax surcharge? The Irish Times plumps for 0.25%, the SBP plays it close to the chest, coyly refusing to commit to either, with the others more optimistically settling on 0.2% and €50,000 increments. The Irish Independent and Sunday Times speculate that a “Mansion Tax” will be included to hit those fortunate enough to live in a house worth more than €1 million.
Broad consensus that the Minister will keep his October 2012 Dáil pledge not to touch Income Tax rates, bands and credits.
Universal Social Charge
Despite the fact that even the Revenue Commissions describe the USC as a “tax on income”, some believe that the Minister will distinguish “tax on income” from “income tax” and increase the USC rates or bands, despite the pledge referred to above. The Irish Times goes for a 1% increase in the current top rate to 8% with a new top rate of 10% introduced for those earning more than €100,000. The Sunday Independent, Business Post and Times disagree, forecasting that USC will remain untouched, citing a Fine Gael victory in behind-closed-doors-horse-trading with Labour.
The SBP and The Sunday Times predict a cut in the PRSI free allowance, which is currently €127 per week. The Sunday Times believes Labour’s proposed increase of 0.5% on Employee’s PRSI is no longer on the table, while the SBP suggests that the minimum contribution from the self employed will increase to €500. Agreement that PRSI will be extended to non-employment (investment) income such as rent received, dividends and interest is so widespread that it barely warrants a mention in the latest articles.
The consensus that the reduction will be €10 (7%) per child per month suggests that this one can be taken to the bank. Even Paddy Power is on board, citing odds of 1/7 on a reduction.
Prescriptions charges to double from 50 cent to €1, chorus the Sundays Times and Business Post, with the Independent singing from the same hymn sheet.
Income limit for eligibility for a married couple to drop from €72,800 to €52,000, claims an oddly specific SBP while the Independent issues a suitably vague reference, commenting that the current threshold is “being examined”.
The SBP teases that the Minister will seek to raise an additional €150 million through Motor Tax increases but leave us wanting when it comes to exactly how this will be achieved. The Sunday Times think that VRT will be the delivery vehicle for this bombshell.
The SBP speculates that an increase in excise rates will be a key ingredient in the Noonan Budget 2013 Cocktail (warning: will leave a bitter taste) while the Independent reports a Fianna Fail initiative to introduce a 10% levy on off licence sales.
The SBP predicts a cut to both the Jobseekers Allowance and payment periods. The Independent agrees with the reduction in payment periods but believes Labour Party pressure will keep the current rate of €188 per week intact.
D’olier Street predicts a cut in the rate at which pension contributions are relieved from the current rate of 41% to the standard rate of 20%, with the Independent quoting a government source in support of a potential cap on private pension relief at €60,000. So who is holding the aces and who will be left with the old maid? We’ll continue to keep you updated with all the Budget 2013 news as it emerges throughout the week.
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