During the pandemic, more was done to protect people from the slings and arrows of unemployment than during any previous downturn. There was the generosity and duration of the Pandemic Unemployment Benefit (PUP), as well as the protection of the unemployed against the threat of eviction. It was briefly like living in a pop-up version of a Scandinavian welfare state.
Now we are looking at the barrel of a crushing national debt. And the government is apparently considering increasing PRSI dues – that second tax on our wages.
But increasing the PRSI – as opposed to raising other taxes – will hit the youngest and poorest among us the hardest. It is like the tax equivalent of slapping millennials, working poor and renters, while the government protects the seniors who vote for them.
Can they really be serious, however? We are in the midst of an employment crisis. Tens of thousands of us are still on the verge of giving up PUP payments, going back to jobs that might no longer be there. As of last week, 143,000 people were still receiving PUP payments. The adjusted Covid-19 unemployment rate for last month was 12.4 pc. The priority right now should be to get these people back to work. And raising taxes on labor is not the way to do it.
Business owners – those who survived the pandemic – often just hang in there. For the average employer, the past year and a half has been a disaster and the future is totally uncertain.
So the government wants to put a tax on labor as if no one would notice. Truly? If you impose a heavy tax on something, it’s usually because you want to dissuade people from using it. See the tax on your Friday night Merlot bottle, for example.
Raising the PRSI right now is how you turn a stupid idea into tragedy. And don’t forget that the employer’s PRSI will be passed on to the rest of us anyway.
Sit back and watch employers respond by slashing workers’ wages and further raising the prices of their products and services. As Churchill once said, âFor a nation to try to impose himself in prosperity is like a man standing in a bucket and trying to lift himself up by the handle. ”
According to the proposals, the PRSI rate of 4% paid by most employees would rise to 4.5% in 2023 and an additional half a point in each of the following years, reaching 5.5% in 2025. It would also occur at lower income levels than today, around â¬ 13,000 per year compared to â¬ 18,300 today. The self-employed would see a significant increase, to a whopping 12.55% by 2028.
People over retirement age do not pay PRSI. You are not liable for PRSI contributions after the age of 66 and this is the case whether you are an employee or self-employed or not.
Yes, we need to tackle the Covid deficit immediately, but shouldn’t the government take a broader view of intergenerational fairness?
The state is not a monster that must be continued to feed, the monster refusing to hold its end of the bargain. It’s supposed to work for all of us. And my generation grew up believing that hard work and reasonable savings would guarantee a roof over our heads. We were wrong.
The increase in benefits to an older generation must be funded by us, the younger generations, whole swathes of whom lost their jobs or had to work in cramped, shared homes during the gloomy winter months and were the worst. hard hit financially by Covid.
A fairer path could be complementary policies that would restore the balance between age groups. Things like increasing child benefits and the child tax credit. Or the introduction of a tax credit for childcare.
I don’t see public day care becoming a reality during my children’s childhood. Why the hell don’t we at least consider the simpler option of making existing child care tax deductible instead?
Until December 2017, you could claim a tax credit if you paid for private rental accommodation. With so many of us resigned to praise forever, why don’t we bring this back?
We could also switch to a more European-type social insurance model where unemployment benefits are linked to previous PRSI contributions.
In Germany, the amount of unemployment benefit you receive is based on your average weekly salary during the 12 months before you became unemployed. Your allowance will be 60pc of your previous average salary (or 67pc if you have children).
A similar model here would allow those who have held long-term employment to qualify for a payment higher than the standard Jobseeker’s Allowance and to receive something in return for our PRSI.
There are loopholes in our tax code for the rich that allow massive fortunes to escape all taxation. The idea of ââtaxing them is also extremely popular. Because it is popular, the government feels a particular urgency to insist that it cannot be done. But I think it can be. And it should be.
The government may have already decided it can increase the PRSI and win another election. They may even be right. So they will go ahead and rob those of us on low incomes of the much-needed take-home pay, make it more expensive to hire staff when many of us are unemployed, while the older generations don’t. have nothing to pay for anything. .
Are protests still legal here?