08 September 2009

Many Critical Reactions to the Commission on Taxation's Recommendations

Irish opposition politicians have said they expect the government to use the report of the Commission on Taxation (see yesterday's entry below) "to tackle the shortfall in the public finances".

Fine Gael's deputy leader and Finance spokesman Richard Bruton (left) said that Fianna Fáil was "trying to tax its way back to recovery, and that no country has ever managed to do this".

"The last thing families and taxpayers need at this time of deepening economic crisis is dreaming up even more ways to tax them to pay for Ireland's unreformed, often dysfunctional and high-cost public service," Deputy Bruton said.
"No country has ever taxed its way back to recovery, but that is exactly what Fianna Fáil is trying to do."
"Ireland's tax system may need to be redesigned to support employment and investment, but the government's focus should not be on increasing overall tax levels," he added.

Fine Gael's newest TD (and former RTÉ economics editor) George Lee (right) stated that people would have to wait and see whether the report was a fair one. This would depend on what choices the government made from the menu provided by the commission, he said.

Joan Burton (left), deputy leader and spokesperson for Finance of the Labour Party, said she was "amazed that the commission has not tackled the issue of property based tax relief" and claimed that "the dominance of tax lobbyists in the commission's make up contributed to them side-lining this important issue".

Deputy Burton stated that the report would require "careful study" and called for it to be used "to address glaring anomalies in the tax system".
She added that despite the commission's description of the report as "revenue-neutral", it would be difficult not to see some of the new taxes being proposed being used to plug the gap in the public finances.

Sinn Féin's Finance spokesperson Arthur Morgan (right) said he expected the report to be used to increase taxation of ordinary people.
"This report unfairly targets households, as does the McCarthy Report, to pay for the government's mismanagement of the Irish economy," he said.
"It is not a restructuring of the tax system based on fairness - it is an attempt to squeeze even further ordinary people struggling to make ends meet."

Meanwhile the Irish Farmers' Association (IFA) criticised the report's proposals on carbon tax and changes to the capital allowance system.

IFA President Padraig Walshe (left) said he was "very concerned" that a carbon tax will add another cost to the productive, export-driven sectors of the economy and will also discriminate against farmers and rural dwellers who do not have the option of public transport.

He thinks the recommendation to change the capital allowance system will undermine any future investment in farm buildings in Ireland.

Con Lucey, the IFA Chief Economist, was a member of the Commission on Taxation.

Another farm group, the Irish Creamery Milk Suppliers Association (ICMSA), which has demonstrated against low milk prices outside Government Buildings in Dublin only last Friday (see my entry of September 4th), said that the proposal for a new carbon tax would "fall disproportionately on the agri-food sector and considerably worsen Ireland's competitive position".

The Arts Council has said it will make a "strong case" to the government for the retention of the artists' tax exemption scheme.
Its President Pat Moylan said that if the exemption is abolished, Ireland could lose entirely a considerable number of artists, and that this would not be for the public good.
She added that a study had shown that the Exchequer would lose tax revenue if the exemption is scrapped.

The Emerald Islander

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