From Socialist Voice, September 2009

Report of the Commission on Taxation: the same old drivel

So much for neo-Keynesianism being the new economic orthodoxy! The Report of the Commission on Taxation has recommended a range of new taxes, including a property tax, water charges, and the taxing of child benefit payments. The proposals for a third tax band would mean that a new band could fall between 20 and 41 per cent, or below 20 per cent, but no higher rate of tax could then be introduced, which would result in people earning more than €200,000 not having to pay any more tax.
     The manner in which the low-tax policy is applied to the economy and informs the commission’s findings is deeply unsound. Not only will it stall economic growth, it will aggravate social inequality and lopsidedly distribute the tax burden. The recommendations, therefore, do next to nothing to engage with Ireland’s unfair tax system. In fact couples jointly earning about €70,000 will be worst hit under the proposals.
     Furthermore, middle-income earners on the marginal rate of tax will lose some of their tax benefits, at a time when their pension schemes are already in trouble. Surely it would be better for the benefits for the less well-off to come at the expense of the wealthiest in society, rather than those on middle incomes.
     Ultimately, the commission’s recommendations buttress a low-tax model of the economy and do little to engender a social infrastructure capable of supporting a cohesive and just society. Instead the ideology underpinning the report is one of increasing income and wealth differences.
     As we have seen over the past decade, such disparities have served to make Ireland an unequal society. Of course it might be said that this is of little concern to the commission, the bulk of whose members were financiers, tax consultants, and lobbyists for business interests—precisely the people whose bread and butter has been “earned” by helping the rich to minimise their tax responsibilities to society.
     In Scandinavian countries, such as Denmark and Sweden, for example, the tax and social security systems, alongside strategic state involvement, are typically used to moderate inequalities, achieving social cohesion and economic growth. However, where the state adopts a low-tax policy, which Irish governments have historically favoured and in the manner in which this report recommends, the results are, as we are now seeing, underfunded public services and a debilitated social security infrastructure.

Home page  >  Publications  >  Socialist Voice  >  September 2009  >  Report of the Commission on Taxation: the same old drivel
Baile  >  Foilseacháin  >  Socialist Voice  >  Meán Fómhair 2009  >  Report of the Commission on Taxation: the same old drivel