Progressives warn against tax cuts
by Bernard Harbor
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The trade union-backed Nevin Economic Research Institute (NERI) has repeated its call for an €800 million adjustment in the forthcoming budget. But it says this does not require spending cuts or tax hikes for most people. Instead it argues for a wealth tax, increased employers’ PRSI on incomes over €100,000, reform of capital acquisitions tax, and higher duties on tobacco and other undesirable products and services.
Separately, the left-leaning think-tank TASC has said cuts to the top tax rate would only help top earners. “Repeated claims by senior members of Government that the 52% marginal tax rate needs to be cut to help middle and low income families is misleading," according to TASC research director Nat O’Connor.
"TASC’s research, backed up by official government figures, shows that only 17% of those paying income tax are paying at the higher rate. A cut to the 41% tax rate really benefits those on the highest incomes. Even then, people who pay only a small share of their income at the higher rate will only see a small benefit," he said.
TASC policy analyst Cormac Staunton said the rush to cut tax was reminiscent of the so-called ‘Celtic tiger’ years. “Tax giveaways completely eroded our tax base and led to a collapse in public finances that we still haven’t repaired. Spending on services and investment has been slashed across the board so, if there is scope to give something back, it should be spent on investment to promote job creation and improve public services," he said.
Read about ICTU’s pre-budget submission.
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