Comment: Tax troubles could really cook Cowen’s goose

THE art of taxation was compared by the finance minister of King Louis XIV to plucking a goose: the aim is to get the most feathers with the smallest possible amount of hissing.

After fattening up during the Celtic Tiger years, it appears taxpayers will be plucked from all sides in December’s budget until the average family is left almost skinned of any of the benefits or services they enjoyed.

If the Commission for Taxation’s recommendations are endorsed, the Government will start pulling and tugging at the children’s allowance, family homes, free water, bin charges, pension plans and energy use.

Asked last night about the reported proposals, Taoiseach Brian Cowen said: “All aspects of the report will be considered.”

The report, to be given to Government in the coming days, will have more than 250 recommendations that will not increase income taxes, but put workers up to their necks in levies.

“Already, in the last year, the Government has announced 20 new taxes or tax hikes, costing a middle-income family over €5,000 per year,” said Fine Gael finance spokesman Richard Bruton.

Thousands of mothers are worried the monthly children’s allowance of €166 each for the first two children and €203 for a third child or more will be lost.

The commission recommends it should be taxed and a tax credit given to lower income families.

“Child benefit is the only payment that goes to mothers, it’s a universal payment and we need to maintain it at that,” said Orla O’Connor, of the National Women’s Council of Ireland.

The report is also expected to recommend a property tax of around €1,000 on all homes except for the lower paid and the elderly.

This would raise about €1 billion per year and, along with a water charge and the phasing out of a tax relief on bin charges, would be used to fund cash-strapped local authorities.

Mr Bruton said introducing such a tax would prove very difficult: “On top of the usual difficulties facing households with low levels of income, we now have possibly hundreds of thousands of young families that were lured into massive mortgages and negative equity in part to pay stamp duty to the Government. It is difficult to see how this will be acceptable.”

Both Fine Gael and Labour believe significant savings can be achieved by cutting tax loopholes for wealthy individuals.

Labour’s Joan Burton, said 400 “super-wealthy” individuals enjoyed €300m in tax relief in 2007. “There will be real anger and disappointment among ordinary taxpayers if the commission does not recommend the ending of this scandal.”

The Government will consider the recommendations later this month.

With unpopular decisions such as cutting children’s allowance and introducing a property tax on the way, we can expect that by the end of the year, Brian Cowen’s goose will be well and truly cooked.