Policy issues concerning Taxation

For the years 2020-2022, or until Ireland reaches full employment (if earlier than 2022), the fiscal stance adopted by Ireland should be determined by an unemployment target, rather than a deficit target, in recognition of the role domestic demand plays in sustaining domestic employment. The State should begin to plan now for the additional tax measures necessary, over the long-term, to finance the Government expenditure required to finance universal services and income supports for our citizens.

The most competitive economies of Europe all collect substantially more tax than Ireland does. The evidence suggests that a low tax, low service strategy for attracting investment is short-sighted and that quality education, infrastructure and services are far more important.

If a government is setting environmental goals, it is important that its taxation system supports these goals. There is great scope in Ireland for shifting the burden of taxation away from productive activity and onto activity which reduces social wellbeing, depletes natural resources and biodiversity, harms the environment, and contributes to climate change. The taxes that people and organisations pay should, to the greatest extent possible, be based on the value they subtract by their use of common resources.

It is clear that tax policy will play a vital role both in the immediate Government response to support people and businesses, and in rebuilding our society and economy once the worst of the health impacts are contained.  The new Government has an opportunity to reform and broaden our tax base and lay the foundations to increase our total tax take now to ensure we are well prepared to meet any future shocks.  We have a once in a generation opportunity to build a new society, a new economy and a new country that reflects the lessons we have learned in recent weeks.