Séamus Healy (Tipperary South, Workers and Unemployed Action Group) | Oireachtas source

I thank the Acting Chairman and welcome the opportunity to contribute to the Second Stage debate on the Finance (Tax Appeals) Bill 2015. The Irish tax system is grossly unfair. The poorest people are the most highly taxed in Ireland. It is not surprising, therefore, to find we are discussing a Bill today which confines legal recourse in tax disputes to the High Court and excludes the right of appeal to the Circuit Court. This means that only the wealthiest can challenge decisions of the appeal commissioners. Taxpayers on low and middle-incomes and small, self-employed, sole traders are effectively excluded from taking an appeal given the huge cost associated with a High Court case and the exclusion of the possibility of an appeal to the Circuit Court.

The Government, Ministers, journalists and some academics are involved in systematic deception in relation to the taxation system. Fairness or equity in taxation is based on the answer to the following question: what proportion of their own income, wealth or assets does each stratum of the population pay in tax? Research from the Nevin Economic Research Institute shows that poorer people are paying out more of their income in tax as a result of indirect taxation such as VAT and excise duties. The institute states that the poorest 10% of people pay a larger share of their income in tax than the richest 10%. In other words, poorer people pay a larger share of their income than the super-rich in our society. The poorest 10% are paying 29.93% in indirect taxation as against the figure of 5.7% paid by the richest 10% of people. Over the past 12 months, we have had Ministers and journalists attempting to deceive the public into believing the opposite is the case. The trick is to pretend that income tax is the only tax and to omit the huge portion of VAT and other indirect taxes paid by the poorest in our society. There is a line of people available to spin this one, the idea and hope being the more they spin it, the more people will believe it.

The Minister for the Environment, Community and Local Government, Deputy Alan Kelly, tells us we have one of the most progressive tax systems in the world while the Minister of State at the Deputy of Justice and Equality, Deputy Ó Ríordáin, tells us that the top 6% are paying 44% of the entire tax take. The Taoiseach tells us we have one of the most progressive tax systems in the world while the Minister for Finance, Deputy Noonan, tells us we have the most progressive tax system in the OECD. It goes on and on. The fact of the matter is this is spin. Significantly wealthy, super-rich people are not paying their fair share of tax. The taxpayers on low and middle-incomes and the poor pay in tax a greater share of their income than the super-rich.

Income tax constitutes only approximately 41% of all taxation.

I believe the exclusion, particularly by Labour Party Ministers, of the VAT on the poor which was increased by this Government makes that party's statements absolutely misleading and shows it is part of a Government that is governing for, and on behalf of, the wealthy.

The reason people on large incomes pay a high proportion of all income tax, but not of their incomes, is that they have a grossly unfair proportion of all income. In fact, in reply to a parliamentary question the Minister told me that the top 10,000 income earners had an average annual income of €595,000. That was in 2012, and it has increased since then. The Minister gave further figures which showed that the top 10% of income recipients, 216,500, had a gross income of approximately €30 billion, or an average of €136,700. Their effective rate of tax was 24%. To add insult to injury, in the last budget the Minister gave a total of €7 million in tax relief to the people on an average annual income of €595,000. He gave €150 million in tax relief to the top 10% of earners in the country. This was confirmed by the press officer of the Department of Finance in a letter to The Irish Timesat the time.

This is all against a background where a recent report by the Central Statistics Office, the Survey on Incomes and Living Conditions, SILC,showing that there are 400,000 children living in households experiencing multiple forms of deprivation, with 135,000 children suffering daily deprivation. The number of children living in consistent poverty, meaning that they both are living at risk of poverty and experience deprivation, doubled from 6% to just under 12% between 2008 and 2013. What is this Government proposing to do? It is now proposing to give even more tax relief to very wealthy people in the forthcoming budget, while fuel and heating allowances are continuing at levels that were reduced by the Labour Party leader as we face into another winter.

Another issue is wealth tax. We have no wealth tax on wealthy people. Indeed, during a recent appearance on RTE, the Minister of State at the Department of Justice and Equality, Deputy Ó Ríordáin, made much of the introduction of the local property tax on domestic dwellings as a move towards tax fairness. This is another spin. Even those with negative wealth - mortgage debt, credit card debt and car loan debt - must pay the so-called property tax. The Central Statistics Office has shown that financial assets, which exclude homes, farms and buildings, have increased by €93 billion from 2008 to 2013 and are now at €165 billion. That is €25 billion above the boom level. Not a penny in wealth tax is due on these gains, while families in negative equity must pay the so-called property tax. Of course, the distribution of wealth is grossly unfair in this county. This has been shown again in a recent Central Bank report. The top 10% of households, or 165,820 households, own 53.8% of all net household wealth or a total of approximately €300 billion, which is almost €2 million each. The vast bulk of that wealth is free of wealth tax.

At this stage, there is no point in further appeals to the Labour Party to deal with this scandal. I appeal to the trade union movement, academics and journalists to expose the scandalous deception being visited on Irish people by the Government, and particularly by Labour Party Ministers, about taxation in the service of the super-rich. I commend Mr. Fintan O'Toole on a very good beginning in this regard in yesterday's The Irish Times. The fact is that the poorest 10% of people in this country pay a bigger proportion of their income in tax than the wealthiest, super-rich 10%. That must stop. It must change, and that should start now.

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