Thursday 19 October 2017

Recovery is still too weak to withstand any tax cut

Temporary budgetary advantages are no basis for a programme of tax cuts in the Budget, writes Marc Coleman

Minister for Public Expenditure Brendan Howlin and Minister for Finance Michael Noonan present the 2014 Budget
Minister for Public Expenditure Brendan Howlin and Minister for Finance Michael Noonan present the 2014 Budget
Temporary budgetary advantages are no basis for a programme of tax cuts in the Budget
Marc Coleman

Marc Coleman

Is it too early to talk about tax cuts? Normally, it would be. With the Budget now taking place in October, speculation about it shouldn't really be inflicted on anyone until July, right? Fair enough.

But this year is an election year. And many voters would like to, ahem, express a view on the expectations they had regarding the burden of tax. Expectations for tax cuts have also been stoked by recent ministerial comment. Furthermore, the penny is dropping that asking Irish industrial workers to pay marginal tax rates designed for Monaco millionaires is neither politically nor economically sustainable. So please Santa, please, can I have a tax cut?

'Can Government afford to give you one?' is the real question. Were the McCarthy report to be implemented, local government to be radically slimmed down and reformed, and the privatisation nettle grasped and were welfare to be focused on need rather than universality then, yes, tax cuts would be possible. And desirable.

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