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Policy issues concerning Taxation

The European Union faces many challenges in relation to healthcare, cost of housing and financial distress that will be further exacerbated by the Covid-19 pandemic.  Ireland and the EU urgently need to develop substantial coordinated actions on these issues.  ​

If a country is setting social, economic and environmental goals, it is important that taxation policy supports these goals. Ireland needs to have a real debate, not just about the levels of services and infrastructure it wishes to have in the coming decades, but also how these are to be financed. Just Taxation is one of the five key priority areas examined in Social Justice Matters: 2020 guide to a fairer Ireland. This report analyses ‘Just Taxation’ as one of five key priority areas required to build a fairer Ireland in an integrated and sustainable manner. 

The Central Statistics Office recently published the Household Finance and Consumption Survey 2018.  This is the only household survey that collects combined information on asset, income and debt levels of Irish households.  It provides us with a valuable data and insight into where wealth and assets are concentrated (both in terms of location and income deciles), and the levels of debt of Irish households. 

If a country is setting social and economic goals, it is important that taxation policy supports these goals. Ireland needs to have a real debate, not just about the levels of services and infrastructure it wishes to have in the coming decades, but also how these are to be financed.   Read Social Justice Ireland's Election Briefing on Taxation for an outline of a number of key challenges facing Ireland and some policy proposals that should be in the next Programme for Government.

As a policy objective, Ireland can remain a low-tax economy, but not one incapable of adequately supporting necessary economic, social and infrastructural requirements. Our current low tax/low investment model is not sustainable and we regret that Budget 2020 did not take greater steps to address this.

Social Justice Ireland has repeatedly called for increased scrutiny of tax expenditures as part of the budgetary process. We regret that in Budget 2020, at a time when the Minister for Finance has made a point of repeatedly noting the scarcity of available resources, government has ignored a real opportunity to increase the total tax-take whilst making the tax system fairer.

What income changes arose from the tax and benefit measures taken in Budget 2020? What are the effective tax rates now for different levels of income, and how do they compare with effective rates over time? Click here to see.

Policy Coherence means making sure that the goals of one policy, or set of policies, does not conflict with another. Here are some areas where Ireland performs particularly badly in this regard.

Social Justice Ireland welcomed the decision to tax windfall gains from re-zoned land in 2010 and strongly condemned its removal five years later as one of the most retrograde policy initiatives in recent years. Government should bring back the tax on windfall gains from re-zoned land in Budget 2020.

Budget 2020 is the ideal time to reform how Ireland does corporate taxation. At present, too many firms get away with paying low effective rates or availing of overly generous subsidies or tax holidays. Our Budget 2020 submission, published in June, contains numerous proposals to improve matters.

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