Warning signs are up in bright lights yet commitment to abolish USC remains – Doherty
Sinn Féin Finance Spokesperson Pearse Doherty TD has said today’s Central Bank’s warning on the volatility of the reliance on Corporation Tax means that the warning signs have now been flashed by the Central Bank, the EU Commission, the Fiscal Council and the IMF. He once again equated the current situation to the reckless McCreevy era policy of cutting taxes on the basis of property related Stamp Duty returns.
Deputy Doherty said:
“It has once again been put in big bright lights that the current government and Fianna Fail supported intention to cut or abolish USC is a very dangerous route. Today’s warning from the Central Bank means that they are in the company if the Fiscal Council, IMF, and EU Commission in pointing out the obvious dangers of relying on unexpected and unexplained Corporation Tax jumps as a basis for cutting personal taxes.
“The Central Bank could hardly have been clearer saying: ‘Past experience highlights the danger of relying on volatile and potentially transitory revenue sources, which can quickly melt away, to fund increased levels of public spending or reductions in tax rates, which can prove hard to reverse.’ In fact, the take of Corporation Tax as a share of tax equates to that of Stamp Duty at the height of the crash. Given the obvious context of reduced growth following Brexit this warning is all the more urgent.
“The top 10 companies in Ireland pay 37% of the Corporation Tax in the State. A single decision in the USA to shift its base would leave a huge hole in our public finances. Corporation Tax should not become what Stamp Duty became to the last generation who squandered economic growth without any dissenting voices from the same parties now planning massive tax cuts that will benefit the better off more.
“There is a need for sober heads at this point and for honesty. Fine Gael and Fianna Fail need to be honest that building on the sand of corporation tax bonanzas is irresponsible and reckless and that promises to cut taxes while building public services simply don’t add up.”