On the 27th of September TASC published a report Tax Injustice; Following the Tax Trail on behalf of Christian Aid. Senator Katherine Zappone was invited to write the preface to the report.
Tax Injustice is a creative and timely document that provides a robust and rational critique of tax breaks, a prime component of Ireland’s taxation system. It outlines alternative taxation mechanisms that can be chosen by Government to reduce inequality and increase economic efficiency. Christian Aid is to be commended highly for envisaging and commissioning this work. I believe that it can be a prime tool for lawmakers and policymakers, particularly at this time, as we carefully search for innovative ways to grow our economy in an equitable manner.
The link, however, between our domestic taxation policy choices and their impact on the Global South is less apparent for lawmakers and this is why I am particularly impressed with the vision of Christian Aid as it is manifested in this report’s terms of reference. TASC’s analysis of this link does not hold back any punches. The authors name boldly an inherent public policy contradiction in Ireland’s taxation regime: “despite Ireland’s track record of solidarity with the Global South, the domestic system of corporate taxation is structured in a manner that supports a practice which impoverishes hundreds of millions of the world’s poorest citizens by facilitating multinational firms in reducing their international tax bill.” The Irish tax regime is undermining the capacity of countries in the Global South to collect tax. Government has a responsibility, I think, to respond to such a charge.
As Ireland braces itself for our next budget this report provides lawmakers and the general public with a hugely significant analysis of taxation measures that have been missing to date. While much of current commentary notes the progressivity of our taxation system Tax Injustice challenges this un-nuanced message. If Government is committed to fairness and to a progressive approach to taxation, then our legal and policy measures should reflect the principle: ‘the more you earn, the more you should pay.’ As outlined in the following pages, the reader will see that there exists still a number of tax breaks or tax reliefs that reduce the tax bill of higher earners. As the authors point out these taxation measures are a form of public spending. Consequently the public monies spent increasing the net income of higher earners necessarily reduce the amount of public monies available for public services and social welfare. Indeed tax breaks are social transfers yet they do not carry the stigma attached to the social transfers of welfare benefits. This is another contradiction that needs to be faced by lawmakers and policymakers. The political rhetoric of ‘fairness’ must be grounded in ameliorating such contradictions and choosing alternative taxation measures such as those outlined in this report.
I wish to conclude by expressing my appreciation to TASC for this intellectually rigorous and accessible analysis, reflective of TASC’s high standards as an independent, progressive think-tank. The staff of TASC provide a consistently high-quality service to lawmakers, policymakers and the public at large. Their generosity and critical and creative excellence is making a significant difference to the quality and sustainability of Irish democracy. We would be a poorer society without them.
Link to Full Report http://tinyurl.com/9x7nhot