Thursday 27 April 2017

A government U-turn on taxes

Finance Minister Michael Noonan's refusal to rule out any tax increases in next December's Budget provides the strongest indication so far that this Government is preparing to renege on its promise, made in the Programme for Government just three months ago, not to increase income tax rates or cut tax credits and bands.

With Environment Minister Phil Hogan having already announced plans for a property tax -- sorry, household charge -- from the beginning of next year, it is becoming depressingly clear that, despite the reformist rhetoric we were treated to during the general election campaign, our new Government is more inclined to push up taxes rather than take the necessary tough decisions.

This is despite the fact that the consequences of the failure of the previous government to bite the bullet and push up taxes instead are now becoming obvious. Already the EU and the IMF have slashed their forecasts for Irish economic growth this year to just 0.6pc. These anaemic economic growth forecasts make a nonsense of the assumptions underlying last November's four-year plan, which formed the basis of the EU/IMF bailout.

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