Independent equality think-tank TASC is proposing that tax reform should be the overriding priority when tackling the deficit in the public finances. TASC provides a fully costed set of tax proposals that achieve 80 80% of the Government’s target of €3.5 billion for 2013. TASC provides details of an equitable model of property tax, substantial reform to pension tax reliefs that benefit higher earners, targeted excise increases, environmental taxation and increases on the Universal Social Charge and social insurance charged on salaries over €100,000.
TASC Director Nat O’Connor said that an increasing range of economic evidence, including from the IMF and OECD, is pointing to the role of economic inequality in causing the global crisis and to the role of economic equality in providing part of the resilience of those countries that have been least effected by the crisis.
“The next three budgets are not just about bringing taxation and public spending into line, they involve decisions that will shape Irish society for years to come. We need to envisage the kind of society we want and begin to plan what role public services will play in contributing to the quality of life for everyone living in Ireland. If we want to achieve Western European standards of public services and welfare supports, we will have to achieve major tax reform to pay for it.” Dr O’Connor said.
TASC’s economist, Tom McDonnell spoke about the need for more attention to be paid to the economic effects of different forms of taxation.
“The least damaging form of taxation, from the point of view of maintaining employment in the economy, is taxation on wealth and assets”, he explained.
“TASC’s model of an equitable property tax is designed to maximise the yield to the state, while ensuring equality through an ‘ability to pay’ system of deferred payment.” McDonnell concluded
Also speaking at the launch of TASC’s budget proposals, Dr Aoife Ní Lochlainn, policy analyst, pointed to some examples of how cuts to secondary benefits and to entitlements in Budget 2012 has left some lone parent families with very severe reductions in their incomes.
“Social transfers to, and services for, low income and other vulnerable groups should be immune from cuts in Budget 2013. This should include secondary benefits, which are often designed to provide targeted income supplements to particularly vulnerable groups. The cumulative effect of cuts and changed eligibility requirements for secondary benefits can lead to major loss of income for many people, such as lone parents. In fact, TASC’s proposals provide for sufficient savings to allow for the reversal of the cuts to lone parents and some other welfare cuts made in Budget 2012.” Dr Ní Lochlainn said.