Religious body urges 1% income tax rise to fight poverty

TOO-LOW tax rates are leading to poverty and are the cause of many of the country’s social and economic ills, a religious body said yesterday.

The accusation was made by the Conference of Religious in Ireland (CORI) at its annual conference. It claimed that the Government's low-tax policy had resulted in insufficient resources being used to tackle poverty.

ICTU general secretary David Begg supported the claims, stating that overall tax revenues were inadequate to fund necessary public services.

The trade union leader called on the Government to use the next budget to broaden tax bases and shut down special tax shelters as a way of generating more revenue.

The conference, which was opened by President of the European Parliament Pat Cox, heard several speakers put forward an argument for tax increases, despite an earlier opinion poll this week showing a majority of people would prefer reduced expenditure on public services to increases in tax rates.

CORI spokesperson Fr Seán Healy said: "Ireland may wish to retain its international position as a low-tax economy but currently we are a 'too-low-tax' economy, and the effect of this phenomenon continues to have visible and expensive social and economic repercussions."

CORI, which represents over 140 religious congregations, argues that funding to alleviate poverty could be raised through tax increases without affecting Ireland's reputation as a low-tax economy.

Fr Healy pointed out that an increase of just 1%one per cent would produce an extra 1.1bn each year in tax income.

"Small increases in taxation are certainly feasible and are unlikely to have any significant negative impact on the economy," said Fr Healy.

"Were Ireland to increase its total taxation levels to that of the UK (from 27.7% to 37.4%), a country hardly regarded as being high-tax, the Exchequer would have an additional income each year of 10.7bn."

According to CORI, one in every four households and one in every five people in Ireland are living in poverty.

It also believes that the problem is compounded by the fact that Ireland spends the least of all EU countries on social expenditure just 27.7% of GDP compared to more than 40% in most other states.

CORI also urged the Government to use its forthcoming EU presidency of the EU to bring about a re-balancing of EU priorities in favour of social issues.