Use Carbon Tax Proceeds To Cut Income Tax, ESRI Urges
Presenting a paper at a half-day conference in Dublin yesterday, Adele Bergin,
John Fitzgerald and Ide Kearney of Ireland's Economic and Social Research Institute
(ESRI) suggested that Finance Minister, Charlie McCreevy should use additional
revenue collected as a result of the planned carbon tax to reduce income tax. Responding to the Kyoto Protocol, which aims to reduce carbon monoxide emissions
worldwide, Mr McCreevy announced in his recent budget that he would be imposing
excise duties on fuel from the end of 2004 in order to cut greenhouse gas emissions. The ESRI has estimated that a carbon tax of 20 euros per tonne would reduce
the RoI's greenhouse gas emissions by two-thirds of what is necessary by 2010,
and raise around 860 million euros. 'The negative impact of the carbon tax on competitiveness would be more than
offset by the positive impact of a cut in direct taxation,' the economic think-tank
observed. .
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