CORI proposes basic income for all with tax rate of 44%

EVERYBODY in the State could be brought above the poverty line, a new study from the Conference of Religious of Ireland (CORI…

EVERYBODY in the State could be brought above the poverty line, a new study from the Conference of Religious of Ireland (CORI) has found.

Under the proposal, Pathways To a Basic Income, everybody in the State could be given a basic income of £60 a week unconditionally, within three years.

Children would receive £21 while young adults between 18 and 21 would receive amounts varying from £25 to £45 a week. A higher payment, equivalent to the contributory old age pension, would be paid to those over 65.

The payment would mean it would be always financially viable for an unemployed person to take up a job as all unemployment and poverty traps would be eliminated, CORI said.

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The study, written by Prof Charles Clark and Mr John Healy, proposes a flat income tax rate of between 44 per cent and 50 per cent on all income after the basic income.

All allowances, bands, PRSI and employment levies would be abolished under the proposal.

The basic income would also reward work in the house and child rearing; it would help students and encourage further education and training and, treat men and women equally, according to CORI.

According to Father Sean Healy, director of CORI's Justice Office, the debate on a basic income has centred on whether Ireland could afford such a strategy. "This study reveals that a basic income could be implemented in Ireland with a much lower tax rate than was previously thought necessary.

The study found that the basic income plan could be implemented with a tax rate of around 44 per cent.

However, if farmers were to retain their current level of support with headage payments and so on, it would require a tax rate of 48 per cent. If all tax reliefs were maintained, on mortgages and VHI for example, the tax rate would have to be 49 per cent.

The plan would also cut payroll taxes for employers by £220 million a year. Instead of employers PRSI, it would set up an employers social responsibility tax of 8 percent.

According to CORI's figures, a married couple with two children on £15,000 a year would end up with £258.71 a week in after tax income under its proposal compared to £215.71 under the current system, including child benefit and family income support payments.

A family with three children on £40,000 would have £539.37 a week now, but £587.29 under the CORI proposals, a saving of £47.92 a week.

CORI is also proposing an ecological tax on fuel, fertilisers, water and waste.

The Green Party is likely to welcome the plan. Mr Trevor Sergeant, the Green, Party's TD, said the Green Party is "generally sympathetic" to it.

I have been proposing a income idea for many years, but were particularly attracted by the eco tax element in the proposal as it would both reduce the amount of dirty industry while also providing an income to the Exchequer.

Father Healy stressed that the proceeds of such a tax would go towards cutting income tax rather than increasing spending in other areas.

Ms Noreen Byrne, of the National Woman's Council, welcomed the proposal saying it would remove the concept of dependence and give status for all kind of work.

According to the report's authors, the status quo was unacceptable. The current tax and benefit systems were devised in a period when one wage earner was enough to support a decent standard of living, where workers stayed with one company most of their lives and where the State provided short term assistance for those in need of immediate help.