Cllr Eoin O’Driscoll (Fine Gael, Stillorgan LEA) has welcomed the €1.5 billion tax package signalled in the Summer Economic Statement for Budget 2027 — but says this tax package can is only first step for middle income earners.
Cllr. O’Driscoll said “Middle income earners in Ireland face an unfair and disproportionate tax burden.
“The threshold for the “higher” income tax band is only €44,000. In 2024, according to the Central Statistics Office, the media annual earning in Ireland was already €44,816. Wages, and living costs, have increased significantly since then. This means that not only does the average wage earner in Ireland pay “higher” income tax but so do an increasing number of workers earning less than the average.
“As a result, middle income earners are seeing their modest nominal income gains dissipate into higher effective tax burdens and increased living costs. This is not fair.
“The announced €1.5bn tax package in Budget 2027 is, therefore, an important step in relieving some of the pressure on Ireland’s Squeezed Middle but it must be seen as a first step towards recalibrating our tax system to better reward hard work and enterprise.
“As the Irish Fiscal Advisory Council have said, this tax package is only ‘slightly larger than the cost of adjusting the tax system so that people do not pay more tax as their incomes increase.’ (Irish Fiscal Advisory Council on X: “2/12 The Summer Economic Statement suggests a package of tax cuts in Budget 2027 of around €1.5 billion. This is slightly larger than the cost of adjusting the tax system so that people do not pay more tax as their incomes increase.” / X).”
Cllr O’Driscoll said the core issue is structural: “income tax credits and the standard rate band have not moved in line with wages or the cost of living, dragging more and more ordinary earners into the higher rate every year.”
“A single worker on €44,000 pays the same marginal rate of tax as someone on €144,000. That gap tells you everything about how out of date our bands have become. People are working harder, earning more just to stand still against inflation, and being rewarded with a higher tax rate for it. That squeeze on middle Ireland has to end.”
He added that “a fair tax system should support people to work, raise a family, and build a stable life — not quietly erode the reward for doing so.”
“I am please to hear Minister Simon Harris support for ongoing tax band indexation and the need for the unfair tax burden on Middle Income earners to be addressed over a number of budgets. As a Fine Gael public representative, I will be working to ensure that this is delivered on in the coming years.
“People organise their whole lives around work — providing for their families, saving for a home, building something durable. A tax system that claws back more of that effort every year, simply because bands and credits haven’t moved, works against the common good it’s supposed to serve.”
A warning on spending
Cllr O’Driscoll also urged Government to match any further tax relief with discipline on the spending side.
“None of this can be delivered on the back of ballooning current expenditure. Fiscal responsibility isn’t a side issue — it’s the precondition for everything else, including further tax relief down the line. Every euro of relief for the squeezed middle has to be matched by real discipline in how the rest is spent.”
“This package is progress, and I welcome it,” Cllr O’Driscoll concluded. “But when the average worker in this country is now a higher-rate taxpayer, that tells its own story. Budget 2027 should be read as a downpayment on fixing that — not the final word.”
ENDS
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