Thursday June 4, 2020

Linking tax and benefits to inflation positive but costly, ESRI finds

It would cost €460 million to peg taxes and welfare payments to prices and €1.2 billion to link them to wage growth

12th June, 2019
Freezing tax bands 'weakens incentives to work'. Pic: Getty

New research from the Economic and Social Research Institute (ESRI) has found that increasing tax bands, tax credits and social welfare payments in line with price or wage inflation could cost up to €1.2 billion in Budget 2020.

The think-tank also finds, however, that the cost to the Exchequer of this process, known as indexation, would be partly offset by also indexing certain indirect taxes – such as those on alcohol and tobacco, and the carbon...

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