DIRT rate increased to 33%

The normal DIRT rate will increase from 30% to 33% with effect from 1st January 2013 onwards. The DIRT rate applying to deposit tracker bond increases form the same date to 36%.

As indicated already, deposit interest will also become subject to normal PRSI @ 4% with effect from 2014 for employees; PRSI has always applied to self employed Class S PRSI.

The increased DIRT rate in 2013 and the imposition of PRSI on deposit interest from 2014 will mean depositors will be getting a lower net return in 2013 and again in 2014, this is coupled with a long term trend towards lower deposit rates meaning the argument for keeping money on deposit is becoming weaker and weaker.

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Who shall we tax next? Progressive DIRT

The government will be hard pressed to decide who to squeeze next, if you go after the poor (which we take to be people earning less than c. 25k – irrespective of knowing whether this suits them or if they have debt or not) it is politically explosive, they will have a hard time going after the elderly – who have a tendency to not take it lying down (remember the medical cards?), and those who are rich (we take as earning 100k or more p.a. irrespective of debts) have already been hit hard.

What group can you easily strike next? The simple answer is that the people who have money are the target. This doesn’t mean those who earn a lot, rather it will be against those who ‘have’ a lot. The savings rate has been steadily rising (last months 0.2% drop was the first of its kind in almost a year)

which could be due to seasonal factors or it could be …

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