[Sinn Fein]

22 May 1997

Genuine tax reform needed

Sinn Fein Alderman Seán McManus today accused both the Rainbow Coalition and the main opposition parties of trying to buy voters with their `not so different' array of ideas on reorganising income tax.

Alderman McManus said:

``In the last week we have seen the five main parties offering substantial change to the income tax system something which all of the parties have been unable to do in government over the past decade.

``Since the re-introduction of water charges in 1983 not one of the five governments since this time have been able to solve this question despite promising to do so in every election. They have not been willing to address the problem they created of double taxation or any of the other glaring inequities of the present tax system.

``While the parties are promising everything from increasing allowances and cutting PRSI to introducing new tax rates and widening the tax bands, the differences between the tax proposals are only cosmetic.

``There is no room in any of these proposals for dealing with the need for a properly reformed tax system where the burden would be shared equally and not fall on the PAYE sector who currently pay over 80% of all income tax in the state. Such a new system would tackle the issues of local taxation and equity in the corporate tax system and would tackle non-payment and evasion of taxes.

``Currently corporate tax is levied at 10% and 36%. Most Leinster House parties seem to support a common rate of 12% which would be introduced over the next decade. This means that firms profits will continue to be taxed at a considerably lower rate than workers incomes. Something which is clearly unfair.

``Another issue not yet raised is the 1.9 billion already given away in unpaid taxes, the bulk of which the state's auditor general estimates will never be collected.

``The tax proposals of all main parties will continue the trend of making the rich richer and the poor relatively poorer. During the period of the last 3 governments (involving FF, FG, Labour, DL and PDs), the poverty gap has grown wider and wider. This has resulted in increased alienation and deprivation, leading to spiralling drug abuse and resulting crime in disadvantaged areas.

``Sinn Fein have consistently called for a fundamental reform of the tax system including the removal of the low paid from the tax net and the introduction of a realistic minimum wage. Only a major transfer of resources from the very wealthy to the less well-off, as proposed by Sinn Fein, will reverse this trend and enable ALL the people to share equally our economic growth. If New Labour in Britain can have a windfall tax on wealth, why can't we have a similar tax on the huge profits made by the banks and big business?''

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