In a submission to the government on loopholes in the Republic's tax regime, the Irish Congress of Trade Unions urged the termination of virtually all of them with immediate effect.
In the proposals for the Department of Finance published this week, ICTU explained that the majority of the tax breaks should have been abolished when the Irish economic boom was clearly established.
"It was a serious error of government’s not to abolish most tax breaks years ago, especially for property investment. Tax breaks are the same as handouts of taxpayers’ money to wealthy investors, unless they add economic activity. In many cases they only displaced other activity and pushed up inflation," ICTU observed, continuing:
"The study by the Revenue of high earners revealed a number of alarming statistics, for example that 12.5% or 50 of the top 400 earners in Ireland paid income tax at an effective rate of less than 10 per cent. When tax rates were reduced, the loopholes and exemptions should simultaneously have been abolished."
The Congress went on to suggest that tax subsidies on property investment fuelled much of the country's construction inflation, arguing that:
"These tax breaks have placed a huge burden on the shoulders of young first time home buyers and give subsidies to the wealthy. The hotel tax breaks are particularly pernicious and anti-productive. High income earners can write off hotel investment over 7 years in depreciation. In reality, the value of hotels has been rapidly appreciating."
It concluded by announcing that:
"Congress welcome the studies of the tax breaks and looks forward to finding out their cost to other taxpayers, the benefits accrued by the wealthy, and any economic gains generated. Most of all we look forward to seeing most of them ended and the additional millions being ploughed into the health service."
The full text of the ICTU submission to the Irish Department of Finance can be found in the Tax News Resources section.
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