Ms Cora O'Brien:

I will make a few points on that. High taxes do not equal high yield from tax. That is an important point. Things like high capital gains tax do not give the country more tax. A tax rate that is too high discourages activity. It means entrepreneurs are not doing the types of things they should be doing because they are facing these high taxes. As a result, our capital gains tax yield has actually halved from what it was in 2008, even though the rates have increased from 20% to 33%. There is a difference between high tax yields for the State in order to pay for services and setting rates of tax too high so that they do not match economic policy. Tax policy should follow what economic policy is trying to achieve. It is a double-edged thing. We have social needs and money we need for housing and infrastructure. However, we are a certain type of economy. In order to raise the amount of tax that we need to pay for all of these services, we have to work within the bounds of being a small open economy. We need a tax policy that will generate the most euro for those spending needs, given the constraints that we have as a small open economy. One should follow the other.