Sir, - Dan McLaughlin's understanding of equity (The Irish Times, November 20th), makes one bemoan the demise of logic as a science. He quite rightly queries this Government's proposed 12.5 per cent taxation of trading profits at a time when individual taxpayers pay at both 24 er cent and 46 per cent. He calls for the Minister of Finance to reduce these rates to 20 per cent and 40 per cent respectively.
Any analysis of rate reduction will show that decreasing the rates, especially the top rate, will benefit the better-off considerably more than those on low to middle incomes. Dan makes no mention of those families, older people and people receiving disability benefit who survive on social welfare payments and who do not benefit from tax reductions.
Equity in our taxation system will be achieved only by offering the same benefit to all taxpayers through increases in standard-rated personal allowances. The widening of tax bands to ensure that low/middle income taxpayers pay less of their tax at the top rate is another equitable mechanism.
Income equity will be achieved by ensuring that social welfare benefits keep pace with the growth of wages, decreases in taxation and inflation. Social equity will be achieved when our health, housing and education systems provide equal access to all, rather than the tiered delivery provided by our present structures. Mr McLaughlin cannot have it both ways. If he uses the equity argument, he must be consistent, otherwise he should forget about equity and call it as he really sees it: reward the better off; they earned it! - Yours, etc.,
Liam O'Dwyer, National Services Co-Ordinator, Society of St Vincent De Paul New Cabra Road, Dublin 7.