Thursday 22 March 2018

Austerity won't end soon, so don't expect cuts in tax

A new strategy is needed to make the system fairer for workers, writes James Fitzsimons

It would be naive to expect a tax cut
It would be naive to expect a tax cut

James Fitzsimons

THE big question for the Government this year is whether it will continue to tax its way out of the recession or ease up on austerity. We've exited the bailout and we got some autonomy back, but we are still answerable to the powers that be in Europe.

We've promised €2bn in extra taxes next year to help get the balance of payment deficit below 3 per cent of GDP.

So far this year, tax collection is ahead of target by €446m. If the trend continues, the proposed tax hikes could be halved. They say the improvements are due to higher employment and improving consumer sentiment. In reality, it is more likely to be a glitch in the statistics that will balance themselves out and there is no reason to be complacent.

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