The Taoiseach Enda Kenny, speaking in Brussels on Thursday, mentioned the following in the context of the ongoing negotiations regarding a debt/bailout deal for Greece:
“I pointed out at the EPP that in Ireland’s case we did not increase income tax; we did not increase VAT; we did not increase PRSI but we put up alternatives to those measures that were proposed in order to keep a pro-growth policy and to make our country competitive and to provide jobs for our people.”
His comments seem intent on highlighting the Irish-way of doing a bailout – but his memory of that bailout, including some of the adjustments that the Government he leads has delivered, is simply incorrect.
Since the Troika arrived in Ireland in November 2010, there have been increases to income taxes, increases in VAT and increases in PRSI. The following are the details:
Arrival of the Troika
• 21 November 2010: Cabinet decides to apply for EU financial assistance.
• 28 November 2010, the Irish Government agrees to a Programme of Financial Support for Ireland from the Troika.
Budget 2011 – 7 December 2010
• Income tax increases
o Personal tax credits decreased by €180 for single person / €360 for married couple
o Employee tax credit decreased by €180
o Standard rate band decreased
Single earner - €3,600
Married one income - €3,600
Married two incomes - €7,200
• Age exemption limits reduced
o Single earner - €2,000
o Married - €4,000
• Income levy and health levy abolished
• Universal Social Charge (USC) introduced with rates of 0% where income is less than €4,004, 2% on income from €0 to €10,036, 4% on income from €10,036 to €16,016 and 7% on income in excess of €16,016. Surcharge of 3% on individuals whose non-PAYE income exceeds €100,000.
• PRSI increases
o PRSI ceiling abolished
o Class S PRSI rate (self-employed) increased from 3% to 4%
o PRSI introduced on employee contributions to pensions
General Election – February 25th 2011
Budget 2012 – 6 December 2011
• VAT increase
o Increase in the standard rate of VAT from 21% to 23% yielding an additional €670 million per annum to the exchequer
o A paper by Collins (2014 – see below) estimated the cost of this measure equalled an average of €207 per household per annum.
Budget 2013 – 5 December 2012
• PRSI increases
o PRSI weekly allowance abolished
o Increase in minimum PRSI contribution for self-employed (from €253 to €500)
• Income tax increases
o USC amended so that standard rates apply to those aged 70+yrs with income in excess of €60,000
Troika Programme ends: 12 December 2013
More details on the income tax changes since 2007 are available in a recent NERI research paper here: http://www.nerinstitute.net/research/taxes-and-income-related-taxes-since-2007/
More details on the 2% VAT increase in Budget 2012 and its distributive effect is available in an NERI research paper from 2014 here: http://www.nerinstitute.net/research/the-distributive-effects-of-recent-vat-changes-in-the-republic-of-ireland/