The 2012 Budget should increase tax (but not income tax)

Social Justice Ireland is proposing that Government should increase the total tax-take (but not income tax) by €2 for every €1 cut from public services in Budget 2012.

In a Policy Briefing oulining ‘Budget Choices’ Social Justice Ireland presented a fully-costed Budget which shows how Government could reduce borrowing by €3.6bn in the coming year without damaging poor and vulnerable people further.

In its Policy Briefing entitled ‘A Fairer Future is Possible’, Social Justice Ireland proposes that in Budget 2011 Government should, among other things:

• Introduce a programme to create 100,000 part-time jobs for long-term unemployed people.
• Impose a levy of 2.5% on corporate PROFITS.
• Develop a new €1bn capital investment programme to benefit the vulnerable and the economy.
• Address the working poor issue by ensuring everyone with a job can get the full value of the tax credits to which they are entitled.
• Introduce an income-contingent loan facility which would enable all third-level students borrow money to pay fees and cover their living costs;
• Increase funding for primary level education and adult literacy programmes;
• Provide substantial support for developing an integrated healthcare model through supporting primary care teams, older people, mental health initiatives and children and family programmes;
• Move towards meeting the UN target for Ireland’s Third World Aid Budget.

A fairer future is possible; Government should be working towards such a future and Budget 2012 can take some key steps towards moving in that direction. Ireland’s total tax-take is one of the lowest in the developed world and should be increased to be closer to the EU average. Otherwise Government decisions are likely to provide short-term gain but long-term pain.

Social Justice Ireland: argues that its proposals show how Budget 2012 could make the tax system fairer, address unemployment, tackle the working poor issue and protect the vulnerable.

In its Policy Briefing Social Justice Ireland also places on record that it does not believe the parameters set out in the Bailout agreement are viable in terms of securing Ireland’s development. In particular they do not believe the projected growth rate for 2012 will be attained, nor will there be any improvement of substance on unemployment. In presenting their proposals they show that poor and vulnerable people can be protected even within the troika’s parameters.

In its Policy Briefing Social Justice Ireland argues that its proposals taken together would:

• Introduce some tax reform;
• Ensure progressive redistribution;
• Produce a fairer sharing of the burden;
• Protect the vulnerable
• Address the working poor issue;
• Produce real part-time jobs for 100,000 unemployed people;
• Make progress towards a better healthcare system;
• Produce greater equity in the education system;
• Move towards attaining the UN target for supporting the world’s poorest people;
• Ensure the corporate sector would also make some small contribution towards rectifying Ireland’s current situation.

Social Justice Ireland argues that these proposals provide an integrated, coherent approach to building a fairer future that is both achievable and desirable. They are fiscally responsible. They protect Ireland’s poorest and most vulnerable people. They also seek to develop greater fairness in the tax system and in Ireland’s response to its present series of crises.”

The Budget choices Document can be downloaded here