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Policy issues concerning Taxation

Without the social welfare system almost 50 per cent of the Irish population would have been living in poverty in 2014.  Adequate social welfare payments are required to prevent an increase in poverty.  Between 2010 and early 2016 inflation was 3.44 per cent - implying that a buying power of €188 in 2010 was equivalent to €194.50 by February 2016. 

The Knowledge Development Box (KDB) policy now being considered by the Department of Finance is proposing to offer preferential effective tax rate(s) to income generated from intellectual property and patents under the premise of nurturing innovation, encouraging companies to locate high-value jobs in Ireland, and promoting economic growth.

A brief snapshot of taxation trends in Ireland and some policy proposals.

Ireland, with a tax take of 31.1% of GDP (in 2014), is defined as a low-tax economy by Eurostat. This is part of the reason why our services and infrastructure do not measure up to European standards.  Any decision to raise or reduce Ireland’s overall taxation revenue should be linked to demands on government resources.

The Healthy Ireland Study published today highlights the need for the introduction of a sugar sweetened drinks tax in order to combat the levels of obesity in Ireland and associated chronic conditions.

There has been a profound failure of policy across the EU since the 2008 crash, a failure that raises serious questions concerning the EU’s commitment to protecting its millions of powerless and vulnerable people, according to Social Justice Ireland’s latest research study on EU developments.

We are focussing far too much on the performance of the economy and not nearly enough on issues such as aging, social housing and sustainability, that have major implications for the wellbeing of individuals and society as a whole according to the National Social Monitor 2015 published by Social Justice Ireland.  It goes on to argue that a balance is required between the various aspects of life if the wellbeing of this and future generations is to be secured.

Tax cuts will not solve Ireland’s infrastructure problems, will not improve social services and will not deliver a fairer society.  Government, at the National Economic Dialogue, should take a long-term view and promote the common good by using all available resource to invest in Ireland’s social and physical infrastructure and services. This approach would lay the foundations for Ireland to deal with the many social, economic and demographic challenges it is currently facing and generate social and economic returns for the state.

The cost of obesity could more than quadruple within the next 15 years to a total of €1,175 a year for every man woman and child in the State unless more is done to tackle the problem, a joint Irish Heart Foundation and Social Justice Ireland report has revealed.

Taxation plays a key role in shaping Irish society through funding public services, supporting economic activity and redistributing resources to enhance the fairness of society.  This forms a core element of Social Justice Ireland’s Policy Framework for a Just Ireland. A full analysis of the challenges and our proposals on Taxation are contained in our Socio-Economic Review 2015 ‘Towards a Just Society’.  The chapter is available below.

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