Ireland´s Middle classes to pay higher taxes

April 7 (Bloomberg) -- Ireland’s government cut its economic outlook, increased taxes and said it will take control of banks’ toxic real estate loans to protect the country and its financial industry from the worst global recession since World War II.

“Our confidence, our finances, our exports and our banks have been dented,” Finance Minister Brian Lenihan said in the parliament in Dublin today. The cost of protecting Ireland from default rose after the minister said the government will pay for the bank assets with bonds.

Reeling from the collapse of the property market and the battering of its biggest lenders, the government is trying to escape a growing fiscal crisis as the economy heads for a record 8 percent slump this year. To tackle the deficit, the government will increase taxes on incomes, cigarettes, diesel fuel and cut some tax write-offs, Lenihan said.

After expanding an average 7 percent a year between 1994 and 2007, when it became known as the “Celtic Tiger,” Ireland’s economy shrank last year for first time in a quarter century. Now the slump is deepening as construction shrinks at a record pace, consumer spending plunges and companies from Dell Inc. to Intel Corp. cut jobs.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aNh4QYpUv4i8&refer=economy

Tax hikes should be a popular in demand for the next 10 years...