THE GOVERNMENT should risk the flight of high-wealth individuals from the State when preparing next month’s budget for the benefit of the population as a whole, the equality think tank Tasc has said.
Calling for greatest taxes on wealth and assets, as well as targeting those earning more than €100,000 a year, its director Nat O’Connor said “yes, we are losing some very high earners” but added that the emigration of tens of thousands of young people was a “much bigger problem”.
In a costed pre-budget report, the group said the Government could achieve 80 per cent of its targeted €3.5 billion adjustment through tax measures, with the remaining 20 per cent coming from spending cuts.
Among the group’s proposals are reforms to pension tax reliefs for high earners, targeted excise increases, taxing “windfall” public sector lump sum payments, and increases on the universal social charge and social insurance on salaries of more than €100,000.
This would allow social transfers to remain unaffected to those on low incomes and other vulnerable groups, it argued.
Looking over the next three budgets, Dr O’Connor said it was clear Ireland was not going to have high growth, “so the question is: what are we going to do with the unemployed?”
He said at the moment they were being told: “We are going to cut your benefits until you go away and emigrate. This is a grim vision for the State.”
Tasc economist Tom McDonnell said that in a recession it was better to tax “passive income”, such as rental income, as well as increasing inheritance and gift tax, as these did not hit employment and “they tend to be progressive as well”.
Tasc also backs a property tax but argues against waivers in favour of an “ability to pay” system whereby payment could be deferred for as much as 20 to 30 years in extreme cases.
New taxes against economic “bads” such as betting shop profits, added sugar and alcohol would yield €480 million, the think tank said, while anti-pollution measures, including a carbon tax and a car-park levy, would yield €120 million.
