News David Quinn

Sunday 31 August 2014

We need a party to fight for low taxes -- step up Lucinda Creighton

Published 20/12/2013 | 02:30

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Lucinda Creighton
Lucinda Creighton

Life may actually get harder for the Government, not easier, now that we have exited the bailout. The Government is enjoying its moment in the sun and has been cautiously inviting the public to pat it on the back for a job well done. At one and the same time it is trying to manage expectations. There is light at the end of the tunnel, it is telling us, but we're not out of the tunnel yet.

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Managing expectations is a tricky business. The presence of the troika invited us to expect nothing but pain, pain and more pain. We didn't like it but mostly we stoically endured it knowing we didn't have a whole lot of choice in the matter. A different government would still have been forced to wear more or less the same set of clothes.

But now that the troika is gone, public expectations are going to rise no matter what. The Government can hide behind the EU to some extent and say it has no choice but to act this way rather than that way, but basically its mud guard has been taken away. Politics will now return to something resembling normality. The pressure on the Government will be more direct than before.

The various competing interest groups in society are going to become more demanding. David Begg of ICTU has already said calls for pay increases aren't far away. Taxpayers will want to see a cut to their rates.

The Government has said it is going to cut rates as soon as possible. Tax cuts are a sort of pay increase. You get your 'pay increase' whether you're in the private or public sector. It's fairer than giving one group a direct pay increase.

However, there will also be demands for public spending increases. TDs will want to promise their constituents that health spending, social welfare spending and education spending are all going to increase again.

At present in Irish politics there is strong left-wing opposition to the Government in the form of Sinn Fein, the United Left Alliance, various other odds and sods plus a Fianna Fail party that has set up tent firmly on the centre-left of Irish politics.

The result of this is that the centre of Irish politics is being dragged ever more to the left. Labour feels outflanked and Fine Gael whose instincts are to cut taxes rather than increase spending has to moderate those instincts.

There is currently no party that is trying to drag the centre of Irish politics towards the right. That is a big problem. If such a party existed, and pitched itself to the public correctly, it would mean that Fine Gael would suddenly have to guard its right flank and so would Fianna Fail.

This is obviously where Lucinda Creighton and the Reform Alliance enter the picture. It would simply be stunning if there is not a market in Ireland for a well-organised, well-led low-tax party.

At one level, people don't need convincing that lower taxes are good. People want to be able to keep more of their money.

However, politicians who argue for low taxes have to get better at countering the left's demands for higher public spending. The fact is that the left is better at making the moral case for its policies than the centre-right is.

It is always able to accuse its political opponents of pandering to greed and to congratulate itself for wanting to help the poor, the vulnerable and the marginalised, even though many of its policies for doing so are utterly counterproductive.

So, what is the case for lower taxes? First, the burden of proof should never be on those who want to keep their own money but on those who want to take that money away through tax.

If I want to take more of your money, I must prove the case for it. No one should ever have to justify wanting to use their own money their own way. The burden of proof is firmly on those who want to take away your money.

Second, low taxes incentivise hard work and high taxes do the opposite. At every level of the income scale people should be rewarded for hard work and for getting ahead. They shouldn't be made to feel guilty for it. There is nothing wrong with getting ahead depending on how you got there and what you do with your success.

Third, and connected to this, if people are discouraged from getting ahead because of an enormous tax burden then the whole of society suffers. Economic growth flags and it then becomes much harder to help the poor, the vulnerable and the marginalised either through private giving or through public spending.

The problem at the moment in Ireland is that there is no party making the case for lower taxes at all income levels in a systematic, ongoing way.

Instead we have Fine Gael tepidly making the case. Labour wants tax cuts for low-to-middle income earners up to a point, but mainly wants higher public spending over the medium-to-long term. The rest of the left-wing politicians plus the trade union movement plus numerous quangos and NGOs want more or less the same thing.

So the Reform Alliance needs to make the case for lower taxes. There is not the slightest doubt that if they do that in a cogent way and organise themselves properly, they will be a big force in Irish politics. We very badly need it.

Irish Independent

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