More pain for PAYE workers as tax hike looks likely... THE GOVERNMENT is on the brink of breaking its election solemn promise not to raise income tax. The tax rise threat emerged as the European Central Bank (ECB) hinted that it is preparing to introduce a 0.25pc hike in interest rates next month -- which will add almost €400 yearly to the average €250,000 mortgage. The blow to struggling homeowners will be further compounded by a new property tax and water charge set to be introduced in the new year. Finance Minister Michael Noonan told the Dail yesterday: "I am not going to rule out any tax initiative, or any tax increase or any tax reduction." He added that the "fraught" condition of our public finances meant he was not in a position to predict take hikes, including income tax. The minister was also forced to concede that EU states such as France and Germany are looking to take an interest in the national assets of bailed-out states such as Ireland.
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