Caution needed over IBEC call to ease back on austerity
The decision of the employers’ organisation, IBEC, to abandon the sinking ship of one-sided austerity should be welcomed. We agree with its call in its latest quarterly report to call for the alleviation of the tax burden on low and middle-income families alongside increased investment in job creation.
However, there must be concern that the IBEC call to ease back on tax measures in the forthcoming budget may be a Trojan horse for those lobbying the Government to abandon its commitment to abolish pension tax relief for high end contributors. It was agreed in Budget 2013 that this measure would be implemented in Budget 2014.
The ending of pension tax reliefs for high-end contributors would result in savings of at least €250 million that should be used to alleviate the tax burden on lower income earners.
While tax alleviation for those on incomes at the middle and lower end of the spectrum should form a key part of an economic stimulus package, which is now clearly essential, there is still plenty of potential to raise at least €1 billion by increasing the contribution of those with wealth or high earnings over the next two budgets.
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