A common EU corporation tax rate of 17.5% should be the goal of the next government, an independent think-tank has urged.
Social Justice Ireland (SJI) says Ireland needs to broaden its tax net and businesses should be made hand over a greater share of their profits than the current 12.5% rate requires.
SJI director Fr Sean Healy said the country’s tax take, measuring 31.1% of GDP, is too low for the kind of investment in infrastructure and services needed after the cuts of recent years.
He said the aim should be to increase the tax-take to 34.9%, a figure that would still allow Ireland to hold on to its repuation as a low-tax economy while permitting greater spending on social housing, childcare, broadband, education, and primary care facilities.
“Such investment would generate an increase in the number of full-time jobs available while also improving the long-run productivity of the Irish economy,” said Fr Healy.
He said it was crucial that the next government placed as much emphasis on strengthening society as on the economy.
“These policy areas must be worked on simultaneously and not sequentially,” he said. “We do not accept that the economy must be ‘fixed’ first and that other issues can be addressed subsequently.”
Taxation reform is one of a series of measures SJI is calling on all parties contesting the election to commit to.
The charity has repeated its long-held view that welfare payments should be replaced by a system of basic income to properly value the contribution people such as carers make outside the traditional workplace.
“In a basic income system, every person receives a weekly tax-free payment from the exchequer while all other personal income is taxed,” it explains.
“The basic income payment would replace income from social welfare for a person who is unemployed and replace tax credits for a person who is employed.”
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