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Tax report targeting households outdated and disappointing – Morgan

7 September, 2009


Responding to the Commission on Taxation report released today, Sinn Féin Finance spokesperson Arthur Morgan TD said the report is deeply flawed. Instead of making the tax system fairer, the majority of the recommendations would further squeeze ordinary householders according to Morgan. The Sinn Féin TD said the Government has shown with NAMA, Bord Snip and now the Commission on Taxation report that it is determined to exploit the economic crisis for which it is responsible to further its own agenda of creating a system where lower and middle income earners are ripped off by the state.

Arthur Morgan said:

“This report unfairly targets households, as does the McCarthy report, to pay for the government’s mismanagement of the economy. It is not a restructuring of the tax system based on fairness – it is an attempt to squeeze even further ordinary people struggling to make ends meet.

“The recommendations for water charges, property and carbon taxes and the taxation of child benefit will all hit low to middle income earners disproportionately. At the same time, the Commission, by its Fianna Fáil terms of reference, was refused permission to examine corporation tax. The fact that a so-called independent body of experts would allow itself to be constrained to the point that it would not even make suggestions on corporation tax, such as the potential for bands to be introduced that could essentially help and foster indigenous small to medium enterprise, is a sorry reflection on the integrity of the entire report.

“The terms of reference for this report are so outdated that they are laughable. The report completely ignores the gaping hole in the public finances stating that the extra revenue raised by measures to broaden the tax base will be available to reduce existing tax rates. The Commission states repeatedly that it wishes to keep the overall tax take low. It fails to take account of the fact that for the last number of years we have had the 3rd lowest tax to GDP ratio in Europe. Other countries have pursued the model of a fairer tax system that provides for proper public services. We have one of the fastest growing deficits in Europe. We cannot keep the overall tax take low, unless we are prepared to completely sacrifice all our public expenditure on services like health and education.

“There are some useful measures, such as a capital gains tax on windfall gains, a property tax on land rezoned to increase its value and the ending of the ceiling on employee PRSI, we which we have long called for. We particularly welcome the suggestion to end some of the government’s pet tax breaks. Sadly, rather than dealing efficiently with tax relief for private pensions, which last year cost the state almost €3 billion and unfairly help the wealthy, the Commission leans towards an SSIA type scheme where the state backs those who can afford to save for their pensions. The use of the taxation system for the provision of a universal fair and equitable state pension would be Sinn Féin’s desired outcome of any examination of the pension system.

“The government has showed with NAMA, Bord Snip and now the Commission on Taxation report that it is using the economic crisis to further its own agenda of creating a system where lower and middle income earners are ripped off by the state. We need a restructuring of our tax system to make it progressive while ensuring a sustainable base. Sinn Féin will not stand by while this government tries to make the majority pay for the minority’s greed.” ENDS

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