Dr. Tom McDonnell:

Mr. Liam Berney is pointing me to a few examples. Ireland is particularly generous with some of the reliefs associated with inheritance tax. Obviously, it is not very popular, but there is very different treatment of different assets. Farming and business assets are given much easier treatment than other types of assets. Perhaps blending the reliefs might be a better solution.

We are also concerned that 80% of the pension tax relief goes to the top 20% of income earners. Obviously, it is extremely regressive and it is not necessarily achieving its goal of ensuring that everybody has an adequate pension in old age, which presumably is the official goal at least. To my mind, it would be better to use that money to increase the basic pension for everyone in the long term. That would be one example.

Broadly speaking, we have a fairly jaundiced view of most tax expenditures. Essentially, they are hidden subsidies to particular sectors. Often they outlive their usefulness. We believe that all tax expenditures should have sunset clauses attached and that they should be reviewed automatically every three years at least. This does not mean that they should be abolished. Some tax expenditures serve a very useful function. The research and development tax expenditure was mentioned earlier. I know some people have criticised it, but providing incentives to engage in research and development is a good thing. Other examples could be given of positive tax expenditures. By and large, we see them as leading to misallocation of resources in the economy. They tend to be regressive hidden spending that people do not see. We would like a fundamental review of the entire-----