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Cowen flying in the face of reality on low paid - Crowe

7 February, 2007

Speaking in the Dáil this evening on the Finance Bill 2007, Sinn Féin Social and Family Affairs spokesperson Seán Crowe TD rejected the claim made by Minister Cowen yesterday that the Government’s system of indirect taxes ‘safeguards’ the lower paid. Pointing to evidence from Combat Poverty that proves the opposite, Deputy Crowe reiterated his party’s opposition to regressive taxes like service charges.


The Dublin South-West TD said: “The Minister is flying in the face of economic reality with such a bizarre suggestion. He is entirely wrong to dismiss evidence of the impact of VAT and user charges on low income families. There is no question but that the extent of ‘indirect taxes’ disproportionately penalises those on low incomes.


“Indirect taxes are inherently regressive because they are paid at a fixed amount or fixed percentage of a price, and do not take into account the ability to pay. They therefore hit low income earners hardest.


“The Combat Poverty Agency found that indirect tax payments for the lowest income households amounted to almost more than one fifth of income. For the wealthiest households it is only just over 9%. The Minister’s comments last night suggest that he is disputing these findings.   


“Sinn Féin is completely opposed to user fees and service charges.  Taxation justice demands that public services should be paid for by direct progressive taxation. The tax system needs to be fundamentally reoriented in favour of the lower paid. 


“The Minister tells us that 845,000 low income earners are now exempt from income tax. When you consider that you have to be on or below the minimum wage to be exempt from income tax, the extent of the problem of low pay becomes apparent. 


“Those on low pay join others left behind by this Government like the 40,000 households on the social housing list; the 62,000 households living in consistent fuel poverty; the over one hundred thousand children who do not get proper food and the parents trying to raise a family on less than the Minister’s expense account.


“History will not absolve this government for its failures, for standing over growing inequality, for contributing to an unprecedented deterioration in the quality of so many people’s lives, for failing to use the record resources to ensure public service delivery.”




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