TRADE UNIONS have called on the Government to introduce new taxes on wealth and on high earners. In its pre-budget submission, the Irish Congress of Trade Unions also maintained that there was “an overwhelming case” for a temporary 2.5 per cent levy to be put on corporate profits.
Congress suggested that there should be a new levy on wealth above €2 million. It defined wealth as the current value of all assets, including anything over €1 million in the value of private houses.
“In the absence of a comprehensive audit of wealth, it is not certain how much such a tax would raise. However, if it were levied at an annual rate of 1 per cent on the net market value of the taxable wealth of ordinarily-domiciled individuals, discretionary trusts and private non-trading companies, it could yield €500 million on the basis of €50 billion in taxable wealth.”
Congress also called for a temporary “solidarity levy” on incomes of more than €100,000, placing no figure on this suggested tax. It also maintained that the minimum tax for those earning over €100,000 should be 35 per cent.
It said the universal social charge should be “progressively restructured” to reduce the rate paid by low earners.
It also argued that it was essential that any property tax was not a flat tax but rather linked to ability to pay.
Congress also called for a review and amendment of planned payments by the Government to unsecured and unguaranteed bondholders of the former Anglo Irish Bank and the large liabilities resulting from promissory notes. It said this arrangement could see the State pay out €4.2 billion annually for the next 14 years.
Congress also argued that significant investment was needed to promote growth and jobs.
It said €2 billion should be allocated from the National Pension Reserve Fund over the next three years. It also said private pension funds should be made exempt from the new pension levy if they increased investment in the domestic economy by 5 per cent – a move which could generate more than €4 billion.
Congress also suggested that investment in solidarity bonds by pension schemes should be encouraged and that a State holding company should be set up to attract private capital for investment and expansion of commercial State companies.
It also said that a new State pension scheme could raise €1 billion over the next year.
At the launch of the pre-budget submission yesterday, congress general secretary David Begg again called for the period by which the deficit in the public finances would be brought down to 3 per cent to be extended from 2015 to 2017.
He said the current programme of austerity was not working.
“Debt sustainability is a problem for us still and the economy needs to move back from the edge.”
Mr Begg said that the most important deficit facing Ireland was the deficit in the demand for labour.
“The single greatest priority for this budget is to avoid measures that will make the dole queues longer.”
