Indirect taxes need to be tackled so society doesn’t pay a toll later on

Between direct tax on wages and indirect tax eg Vat, surcharges, fuel excises ... Ireland collected over €37bn in 2013.

Michael Collins, senior researcher with Nevin Institute, has completed a study of the tax system by analysing information from household surveys, the CSO, and Department of Finance.

Its key findings are: The population on middle income pay the least amount of tax, while those on the bottom and top income pay the most tax.

Startling as it may seem, our direct income tax is progressive while our indirect tax is regressive. Politicians are trying to make a case for tax relief for the “squeezed middle”. This is myth put about by employers and a number of union officials. Citizens on low incomes need tax relief and waivers if society is not to pick up the tab further down the line in the shape of homelessness, poverty and illness.

A case is to be made for looking at farmers who own a lot of land yet benefit from grants in the EU. A case is also to be made to tax those who earn money in Ireland but live abroad. Then we have the multinationals who pay little or no tax.

Tax is critical for the operation of a democratic civil society. Ireland’s leaders need to ensure the poor do not suffer by methods of indirect tax. “Milk the cow, but do not pull off the udder”, as says a Greek proverb.

Dermot Hayes

Old Military Barracks

Kilrush Rd

Ennis

Co Clare