Finian McGrath (Dublin North Central, Independent)

That is the reality of what many people were saying to me on the doorsteps and at my clinics over the summer period.

I wish to offer a few proposals to the Minister for Finance. I would love to see him reduce tax breaks for the wealthy to EU levels; to introduce a wealth tax for high earners with assets worth more than €1million; to end tax exile loopholes by making citizenship the basis for taxation for high earners; and to apply PRSI and income levies to all income, regardless of source. I ask the Minister to consider such constructive ideas, even if they might not be trendy or popular. If we are to make our way out of this mess, we will have to face reality. Although recent opinion polls have suggested that many people want public expenditure to be cut, I strongly believe that part of the solution must involve an equitable and fair taxation system. I accept that may be a minority view.

We need to reflect on the reality that our low taxation regime is not working. There is a deeply ingrained belief in Ireland that a low taxation regime is needed to encourage entrepreneurship, investment, employment and wealth creation. However, countries with higher taxation regimes outperform Ireland on economic competitiveness, quality of public services and enterprise supports, and also have lower levels of poverty and inequality. I ask the Government to study the economies of such countries. Another common myth is that high earners pay disproportionately high levels of tax. I hear this in the media every second night of the week. In fact, high income earners pay less in tax than is popularly believed, largely as a result of generous tax breaks to reduce their tax bills. Ireland spends over three times the EU norm on various tax expenditures, including tax breaks and reliefs. In 2009, the State lost €7.4 billion on tax expenditures. The Commission on Taxation has identified over 100 tax expenditures, which cost the State over €8 billion.

I would like to make a sensible proposal on that basis. If we want the quality of our public services and economic investment to be at European levels, we need to move to European levels of taxation over the medium term. I accept this might not be trendy or popular. If we are serious about tackling inequality and this country's major economic crisis, we need to take tough decisions. I suggest we should make such decisions on behalf of the 450,000 unemployed people in this country. Those who are lucky enough to be working have a responsibility to look after the 14% of people who are unemployed. We should not back down from tough decisions of this kind. I will conclude by asking the Government to listen to sensible proposals for dealing with this economic crisis because we need to work together to get out of this mess.

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