THE Packard crisis again highlighted the need for urgent reform of our "anti work, anti enterprise system of personal taxation", said Mr Michael McDowell, PD spokesman on finance.
Introducing a motion in Private Members' Time calling for fundamental tax reform as an integral part of any successor to the Programme for Competitiveness and Work, he said the "tax and spend" approach of the Labour Party had failed the country. It had left us with one of the highest unemployment rates in the developed world.
The PDs wanted a radical transformation of our personal tax regime within the lifetime of the next government. This would involve cutting the basic rate to 20 per cent and the top rate to 40 per cent, abolishing employees' PRSI and the two levies.
The Minister for Finance, Mr Quinn, said he utterly rejected the false impression being created that no progress was being made towards reducing the tax and PRSI burden on employment income. Significant progress had been made. A central tenet of the last two budgets had been to reward work by increasing take home pay. Over the last two budgets combined, personal allowances had been increased by close to 13 per cent.
The Fianna Fail spokesman on finance, Mr Charlie McCreevy, said if competitiveness was to be maintained the scope for wage increases in the private sector was nil. Fianna Fail agreed that tax rates must be lowered, "but the irresponsible spending levels achieved by this Government must be pruned back first".
Debate on the motion continues this evening.