A once-in-a-lifetime and definitive choice on taxes looms

WHEN he outlined his budget ambitions in Tipperary yesterday, Taoiseach Leo Varadkar said he would prioritise reducing the tax bills faced by middle-income families and those working for the minimum wage.

These are entirely laudable objectives and should be delivered, even if any realignment might mean only a modest boat-lifting for those on low incomes.

This recognition, especially as the nature of work and employment are changing in ways that make the vulnerable even more vulnerable, is overdue.

It is time too for Mr Varadkar to turn the sense of possibility he has so often expressed since he became Taoiseach into something concrete.

Should the budget pass without putting some flesh on those bones, the naysayers will resume their life’s vocation with a renewed and dispiriting vigour. When he made those remarks in Clonmel, Mr Varadkar cannot but have been aware of the momentum gathering around the idea of a centralised European Union finance ministry and eurozone tax harmony.

Neither could he have been unaware of a warning offered to the Oireachtas committee on budgetary oversight by the Fiscal Advisory Council.

It suggested Ireland could lose up to €4bn in corporation tax if EU-wide rules for multinationals were agreed. Should that transpire and have an entirely predictable impact on the number of jobs supported by foreign companies using Irish bases, then Mr Varadkar would have problems far, far greater than tax cuts for low earners.

To put it in context, €4bn is about 25% of the HSE’s annual budget.

Mr Varadkar would have been aware too of European Commission president Jean-Claude Juncker’s declaration to the European Parliament on Wednesday that tax rules for Facebook, Google, Amazon, and other digital companies should no longer be subject to veto by member states.

European finance ministers, including Paschal Donohoe, will consider a stepping stone towards that objective today when they review an Estonian plan to tackle global digital giants.

A whiff of proposals like those would provoke Tory MP Jacob Rees-Mogg to lead totalitarian Brexiteers in a chorus of ‘Rule Britannia’ but Mr Donohoe must live in the real world — one that has changed dramatically even in a short time.

Mr Donohoe’s predecessor Michael Noonan routinely rejected out of hand suggestions that our corporation tax rates might be reviewed but he did not have to try to deliver Brexit terms that would not do untold damage to our society and economy.

Mr Donohoe is part of an administration that must. It is impossible to imagine that can be achieved without the full support of the EU and a degree of loyalty absent during the banking crisis.

Apart at all from that challenge, it seems we are about to have to decide where our loyalties lie in a once-in-a-lifetime way.

Do we stand with the democracies of Europe or with the corporations that are so very effective at minimising their tax bills by playing one EU state against the other?

These are fundamental decisions we can’t kick to touch for much longer. Our decision, however it is reached, will define Ireland for generations to come.