Budget Perspectives 2012

Abstract

Over the last decade Irish tax policy has undergone dramatic shifts. As the economy boomed in the early 2000s, income tax rates were reduced, tax credits were increased and the standard rate band was widened. Social welfare benefits were increased substantially over the same period. However, with the onset of the crisis in 2007?2008, the taxes that the government had increasingly relied upon during the boom years ? such as stamp duty and capital gains taxes ? collapsed, creating an urgent need for new revenue generation. The introduction of income levies ? later replaced by the Universal Social Charge ? significantly increased the revenue from taxes on income.2 Welfare payments, particularly for those of working age, were reduced.