Saturday 29 November 2014

Unions call for major tax reform instead of wage increases

Sam Griffin

Published 18/07/2014 | 02:30

Trade unions have called for major tax reform instead of wage increases for workers in their pre-Budget submission to the Government.

ICTU general secretary David Begg yesterday said a budgetary adjustment of only €800m, and not the Government-stated figure of €2bn, was required to meet the country's 3pc deficit target. The congress proposes this would be achieved through tax expenditure reforms, increases in employer PRSI and excise duty on tobacco, sugar and online betting as well as the introduction of a wealth tax.

There were also calls for a compete water tax exemption for households earning less than €80,000 and the introduction of refundable tax credits.

"It is our position that the bulk of any adjustment should focus on the revenue side, rather than the expenditure side," the submission's author Dr Tom McDonnell said, adding Ireland's expenditure and revenue was below the European average.

"It's not possible for us to maintain western European standards of education, of health, or of infrastructure unless we quite dramatically, albeit over a long period of time, raise the amount of revenue we're generating year on year."

A system of refundable tax credits would see the unused portion of credits returned to workers who do not earn enough income within a year to use them up.

ICTU estimates the system would cost €140m to introduce.

In addition to a water tax exemption for households under €80,000, ICTU says there should be no free allowance for households earning over €100,000.Congress estimates this would raise around €100m.

An additional €250m-€350m would be raised by a wealth tax of around 0.5pc for homes earning over €1m.

The pre-Budget submission also calls for a €400m increase in social spending with half of this money going towards tackling "Ireland's social housing crisis".

Demands for wage increases are not part of ICTU's submission for this year's Budget.

Irish Independent

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