Finian McGrath (Dublin North Central, Independent) | Oireachtas source

I thank the Acting Chairman for the opportunity to contribute on what is locally and internationally an urgent and important debate on tax. Many of us want a tax system that is fair and equitable. I thank and commend Deputies Maureen O'Sullivan, Joan Collins and Boyd Barrett on introducing this motion as we need to have an honest and open debate on tax justice and the requirement for a society built on social justice. Contrary to what some Deputies have claimed, we are not trying to drive out multinationals. A fair and transparent system must form part of that social justice plan. What is wrong with that?

The motion proposes solutions. We need to be brave and consider some of these. Too many have suffered in the past five years, with the weakest often suffering the most. That is unacceptable. The richest and most powerful devise schemes and other stunts to avoid paying tax or to ease the pressure on themselves. There is a growing international consensus that aggressive tax avoidance and evasion by some corporations is a major contributory factor in the staggering increase in global economic inequality. This is what I am concerned with. I am not trying to close down any business or stop foreign investment. We are discussing inequality in broader society. The global trend of increasing economic inequality and poverty is echoed in Ireland. Recently, the Think-tank for Action on Social Change, TASC, estimated that the wealthiest 10% of our population owned 42.3% of all wealth whereas the bottom 50% owned only 12.2%, with a dramatic increase in levels of deprivation, poverty and homelessness in recent years. For example, 750,000 people, including 232,000 children, now live in poverty. This is why we discuss tax. Tax should be about the distribution of wealth in our society.

There is a concern that Ireland's low corporation tax rate and company regulatory regime do not support adequate accountability on the part of companies that operate out of Ireland. Many Deputies have friends and family members working in the companies in question, but that does not mean the companies should not pay their fair share of tax. The exchange of information between tax jurisdictions is not automatic. It is also a concern that the recent European Commission investigation into Apple in Ireland revealed a lack of transparency and accountability on the part of Revenue to the people of Ireland.

In addition, there is concern that Ireland is part of a network for international corporate tax avoidance and evasion, as demonstrated by the so-called LuxLeaks scandal and the widely criticised "double Irish" tax arrangement. These are the issues in respect of this broader debate.

One also hears the suggestion that Ireland has a highly progressive tax system, but of course that word is often distorted. It has a progressive income tax system, but what about the corporate, property and wealth taxes, as well as VAT? Income tax constitutes 41% of the tax system, and the people at the bottom of the tax system pay as much of their income as do those at the top, but one will not hear that point from a lot of people in this debate. There is a 30% rate of indirect taxation, whereby the people in the bottom decile pay 30% of their income in indirect taxes; incidentally, the people in the top decile pay 6% in this regard. Similarly, people in the top decile pay 9% of their income in tax while people in the bottom decile pay 28%. Is that really progressive? Yesterday, Renua had its tax policy launch, at which it advocated less income tax for those who earn more. Where would one get it? It proposed a 23% flat tax, which is completely unacceptable. Most rich people make money from assets, not income, and, as Members are aware, these already are taxed under the capital gains tax regime.

My point is that Members must consider the facts and must be careful about ensuring a balance and a fair distribution of taxes. In addition, Members must deal with the reality that the tax issue is a global problem. A global problem requires a global response and, in the case of Ireland, a response right across the European Union. Members have had sight of the BEPS proposals. Will they lead to greater losses of taxation revenue compared to the current amount of $250 billion estimated by the OECD? These are questions to be asked. Reasonable and moderate people are making the point that there is wealth out there. Why do Members seek the wealth? It is because they wish to remove children from poverty. Why do they seek an additional few bob on taxes? It is to do something about the housing crisis. They seek this additional money to get people off trolleys and into real beds in hospitals. Essentially, these are major issues Members should address and from which they should not run away. I again thank my colleagues for tabling this important Private Members' debate but, that said, I always support the concept of supporting Irish small businesses as a priority, as well as supporting foreign direct investment as part of the overall strategy.

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