Tuesday 28 February 2017

Taoiseach's tax comments are set to frame general election debate

Bringing personal taxes into line with Britain makes a lot of sense, but honesty is needed about the implications for public spending, writes Dan O'Brien

Dan O'Brien

Dan O'Brien

Taoiseach Enda Kenny said his party would seek to bring the personal tax burden closer to levels that obtain in other English-speaking countries. (Photo: PA)
Taoiseach Enda Kenny said his party would seek to bring the personal tax burden closer to levels that obtain in other English-speaking countries. (Photo: PA)

Taxing and spending are the meat and potatoes of politics in mature, stable democracies. How much is taken from whom and how the money is spent are the matters which tend to dominate political discourse over all other issues. With an election campaign about to kick off, the future of tax and spending will be front and centre among the issues that are discussed and debated in the run-up to polling day.

In a pre-Christmas briefing of political correspondents, Taoiseach Enda Kenny made one of the most potentially significant statements on tax, and by implication on Government spending, in recent times. He said his party would seek to bring the personal tax burden closer to levels that obtain in other English-speaking countries.

The reason the statement is so significant is because taxes on personal incomes, which includes PRSI and USC, raised €26bn last year, or almost half of all tax revenue. As this source is far larger than any other, making changes to it will have very big implications for the amount of money any government has to spend.

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