Almost all the tax incentive schemes currently run by the Department of Finance should be abolished and the savings channelled into the health service, the Irish Congress of Trade Unions (Ictu) said today.
General Secretary David Begg said some of the tax breaks were responsible for the high level of construction inflation which has dogged the Celtic Tiger economy and should have been done away with ten years ago.
"Economic growth soared and averaged a staggering 8.5 per cent for 9 years. 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," Mr Begg said.
The breaks, which are given in the form of exemptions or write-offs for various types of investment - for instance public car parks - were in effect a taxpayers' subsidy for wealthy investors. The hotel construction tax break was "particularly pernicious", Mr Begg said.
In a submission to Government calling for an immediate end to almost all tax breaks, Congress noted that the latest Revenue statistics showed 50 of the top 400 earners in Ireland paid income tax at an effective rate of less than 10 per cent.
It said consideration should be given to establishing a minimum income tax for high earners, to counter this.
It also expressed Ictu's concern over reports that the Government was lobbying Brussels to allow the retention of the controversial tax break to the bloodstock industry
It concluded that tax breaks are problematic because the loss of revenue is difficult to quantify in advance and can be anti-competitive.
Ictu said they also have unintended consequences. For example, a "huge burden" was imposed upon first-time home buyers and in some cases the incentives proved to be counter-productive for instance leading to urban and rural blight in some cases, the submission claims.
It said the Town Renewal, Urban Renewal and Rural Renewal schemes should be abandoned immediately. It also called for an immediate end to capital allowance schemes for the building of private hospitals, sports injury clinics, holiday cottages and third level education buildings.
But it said that because of the health service crisis a case could be made for assistance for the building of private nursing homes. It said the Artist's Exemption scheme and Film investment should be retained but with tighter criteria and closer regulation.