David Higgins

Today’s Exchequer figures make for grim reading.

They show that our tax take has collapsed in the past two years. While this has eased off we still need to raise more in tax to help bridge the €22bn deficit.

Next week’s budget is going to comprise mainly of a carbon tax and a few other taxes to make €1bn. This is part of the €4bn savings proposed in the budget. While the carbon tax is a positive measure, albeit disruptive, it should not be the only tax change we make in this budget.

The first thing I’d plan to do is radically reduce the VAT rate. It’s currently at 21.5%, why not send it down to 11.5%? This would mean an immediate 10% drop in the price of all goods and it would instantly boost consumer spending. This would also lead to job creation and retention in the retail sector. Now, I know that the take the government gets could suffer however I feel it should be looked at. Either way something needs to be done about cross border shopping to the UK and I think this is the first place we should look. 10% might be too much to cut it by but we should definitely bring the rate below 20%.

The second measure would be to introduce a 3rd band of income tax. In principal, I’m not in favour of hunting the rich for cash because it does harm investment. However, there needs to be a perception of fairness and I think a 50% Income Tax rate for those earning over €100k would not do much harm. The fact is that taxing the rich only squeezes a few extra cent from them but it’s a sure move to make everyone else happy. Irish people seem to want to take everything from the wealthy and successful.