The Community Platform today launched a campaign for a more progressive tax system. Speakers at the launch criticised government cutbacks and media reportage of the cuts. By Shane Creevy.
Chaired by Fergus Finlay in Buswells Hotel, The Community Platform (consisting of 29 national networks and organisations) launched a campaign to influence public opinion in advance of Budget 2011. The group proposes that cuts are not the only option for the government to reduce the budget deficit.
Fergus Finlay said a general consensus exists that cuts are the only way to respond to the recession.
"Last year, cuts in child benefit helped to drive thousands of children back into consistent poverty", he said. "Cuts in the supports for unemployed people, people with disabilities, carers, all caused immense hardship – and they did absolutely nothing to turn the economy around. The narrowness of the current debate in Ireland is doing untold damage to social cohesion."
Ann Costello of The Community Platform said that the revenue raised in Ireland through the tax system was one of the lowest in the EU. She said the government expects to take 29.3% in taxes as a percentage of GDP for 2010 while the European average is 39.3%. The findings of The Community Platform are contained in a report written by Michael Taft and due for publication in the early new year.
(Full audio: Ann Costello of The Community Platform)
Ann Costello said the report examines "how the tax system could be redesigned to make it more equitable, sustainable and capable of generating the revenue to provide high quality public services and social infrastructure".
She said progressive tax reform was the best alternative to cuts in public expenditure which can lead to further deflation in the economy.
She made four proposals that avoid cuts in expenditure and could assist government in dealing with the deficit:
- Reduce tax breaks for the wealthy to EU levels. She said the state lost €7.4bn in 2009 from tax breaks. She said that a phased reduction in tax breaks to EU levels over a three year period would save up to €1.5bn a year.
- Introduce a wealth tax for high earners with assets worth more than €1 million. She said such a tax could raise between €500m - €1bn.
- End tax exile loopholes by making citizenship the basis for taxation for high earners. This would be based on the US model. She said that Ireland has more than 6,000 tax exiles.
- Apply PRSI and income levies to all income, regardless of source.
"We really believe that Budget 2011 has to give hope and vision to ordinary people in Ireland," Ann Costello said. "We're going to be launching a very strong campaign between now and the budget. And we're going to be calling on all of our members - our 29 members, all their members all over the country - to lobby TDs to try to get this onto the agenda".
Tom O'Connor, lecturer in UCC also spoke at the campaign launch. He said that the low taxation system is not working.
(Full audio: Tom O'Connor, lecturer in UCC)