1)Critique of Budget 2008Income LevyPositives:~ With the Irish Economy moving towards a recession it was crucial that the Budget 2008 focused on raising new sources of capital. The policy initiative in the Budget 2008 that will do this to best affect was the 1% income levy.
~ It is estimated that Ã¢ÂÂ¬2 billion in tax revenue will be raised by this initiative, these funds will be central to public spending and servicing interest on Government debt.
~ A further positive aspect of this policy is that people earning under the minimum wage will be exempt from this tax so as to promote fairness.
Negatives:~ The Government outlined equity and fairness and higher rates for those on higher incomes (http://www.budget.gov.ie/2009/financialstatement.html) as one of the key principles they planned Budget 2008 to uphold however, some parts of the income levy partly ignores these principles. Although people earning over Ã¢ÂÂ¬100,000 are levied at 2%, it can be argued that high earners are not being levied enough compared to those in lower brackets.
~ An additional negative side of the income levy is that there is no definite date outlined for this to finish. This initiative is greatly needed during recession but when this period comes to an end so should the income levy. It is believed the Government should have identified more clearly when the "temporary" nature of this policy is to cease.
Corporation TaxPositives:~ With the flagging Irish economy not making any signs of revivals it was imperative that the Government leave the corporation tax rate untouched at 12.5%. Without the backing of multi-nationals, Ireland's economy would suffer greatly. The Government resisted the temptation of lowering the rate in order to try and drive the economy and we feel it was the right choice.
~ The Government introduced a tax incentive...