Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I move amendment No. 2:

In page 8, between lines 16 and 17, to insert the following:

“3. The Minister shall, within 6 months of the passing of this Act, bring a report on the cost and implications of abolishing the Universal Social Charge for everyone earning less than €90,000 per annum.”.

This amendment seeks a report on abolishing the universal social charge for everyone earning less than €90,000 annually. It is a policy which was in the Solidarity-People Before Profit pre-budget proposal. It is coupled with amendment No. 3 which we will discuss in a moment which is to pay for the abolition of the USC by imposing new tax bands on the highest incomes. There is often a debate over whether, as the Government suggested, there ought to be some reductions in the tax burden on those who earn low and middle incomes or more generally.

Alternatively, although the Government sort of abandoned the policy, the debate is whether we should progressively move towards the abolition of the USC. Then there are those who say we should not do that but should spend whatever fiscal space is available on public services and infrastructure.

Solidarity-People Before Profit rejects the false choice that we can either have money for public services and infrastructure or money to reduce the tax burden on hard-pressed working people. We think it is possible to do both. However, to do both, it is necessary to be honest with people, which is where the Government fails. When it is criticised about the small €5 a week tax reductions it is proposing in this budget over the need to spend in other areas, it is open to that criticism and that is because we are fighting over crumbs. That is what we have in the budget. Do we have crumbs of €5 a week in tax breaks for workers or do we have crumbs of additional expenditure in public services such as health, education and the arts? We would have characterised the budget as a budget of crumbs. There were a few crumbs for the workers and a few crumbs for public services. However, it did not address the low levels of pay and the high tax burden, whether direct or indirect, on ordinary workers. It did not in any real sense tackle the massive shortfall in investment in public services, particularly areas such as housing, which is a disastrous situation, and health.

To do both justice, it is necessary to find other sources of revenue. That is the point to both of the reports referred to in amendments Nos. 2 and 3. It is to look for other sources of revenue. We have a series of other amendments seeking reports in other areas where we believe significant revenues could be raised. However, for the most part the Government does not want to talk about these revenues, which include taxing those on very high incomes of in excess of €100,000 a year. When we make such suggestions, the Government states that it is necessary to reward work and that it does not want to impose higher levels of tax on high earners because it disincentivises work. However, if we are to be concerned about punishing people for working, we should be more concerned about punishing those on low and middle incomes who have suffered pay cuts and the USC and feel disproportionately the impact of regressive indirect taxes, whether they are bin charges, hospital charges, parking charges or any other of the array of stealth taxes which reduce the real income of low and middle income people but mean nothing to high earners. A person on €150,000 a year is not bothered about paying bin charges, water charges, parking charges or increased public transport costs. For those on €25,000 to €45,000 a year, however, these charges really hurt and they hurt them disproportionately. The USC disproportionately hurts them and the pension levy hurts public sector workers as do the pay cuts they suffered during the austerity period. In proposing the abolition of the hated universal social charge for those earning less than €90,000, we believe it, and a hell of a lot more, can be paid for by imposing higher taxes on those on higher incomes as well as on wealth and profits and other sources of untapped revenue. That is the basic proposal and we think it is fair.

The concept of wealth distribution is missing in the economic debate; however, it needs to be debated. It was often spoken of in the 1960s and 1970s but it is now gone from political discourse. We end up fighting over things called fiscal space. As I said, we are arguing about the crumbs but we do not talk about the redistribution of wealth and using the tax system as the main mechanism to do it. The reason we should talk about it is that the inequalities in the distribution of income and wealth are growing all the time. That is what these two related proposals in amendments Nos. 2 and 3 are trying to address: the redistribution of wealth from the have-a-lots to the have-very-littles.

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