TASC Refutes IBEC's Skewed Analysis of Income Taxation

TASC Refutes IBEC's Skewed Analysis of Income Taxation

IBEC's publication 'Debunking Irish income tax myths' is inaccurate and misleading

FOR IMMEDIATE RELEASE

TASC, Ireland’s independent progressive think-tank, today launched a response to IBEC's analysis of income tax in Ireland.

TASC's analysis uses official statistics to demonstrate the flaws in IBEC's analysis and to reinforce TASC's analysis that the vast majority of people would benefit from maintaining and boosting public services rather than cutting the higher rate of income tax in Budget 2015. TASC's analysis focuses on sustainable tax revenue and shows that it is possible to create a more equal society while managing the public finances prudently and promoting job creation.

The response can be read here: https://www.tasc.ie/assets/files/pdf/tasc_response_to_ibec_tax_analysis.pdf

In the analysis TASC demonstrates:

• Ireland has the fifth lowest implicit tax on labour, which is Eurostat's standard measure of taxes on labour incomes. It is incorrect to claim that Ireland is a high tax country for labour incomes.

• Ireland has effectively the lowest level of social insurance in Europe, which reduces taxation on labour incomes. Social security contributions are 4.4% GDP in Ireland versus 11.1% on average across the EU.

• IBEC's claim that 'half' of income tax payers would benefit is false, and is based contorting the relevant data. At most 607,000 people might benefit, which is 32 per cent of the 1.9 million people at work.

Speaking at the launch, TASC Research Director, Nat O'Connor said "Budget 2015 offers an opportunity for Ireland to move in the direction of the competitive, highly productive economies of North-West Europe, but to do so we need to maintain and build on quality public services and public investment.

"Ireland's tax and social charges are just three-quarters of the EU average level. Inequitable tax cuts for high earners will undermine health, social housing and other vital public services. Ireland has the highest level of pre-tax inequality among all OECD countries, so we need to maintain the integrity of our progressive income tax system to maintain social cohesion.

"The weight of evidence suggests that cutting the 41% higher income tax rate will only benefit higher earners, without any boost to the economy or job creation as a result. On the contrary, IMF staff papers among other sources demonstrate that public investment has a greater impact on economic growth than cuts to income taxation." Dr O'Connor concluded.

ENDS

For further information, and to arrange interviews with the lead researchers, please contact TASC’s Research Director, Nat O'Connor on 085 8269093 or noconnor@tasc.ie

Notes for editors

TASC is an independent progressive think-tank promoting action on social change grounded in evidence-based policy proposals. Our vision is of a flourishing society based on equality, social justice, transparent democracy and sustainable economic activity.

Website: www.tasc.ie

TASC's response to IBEC's analysis of taxation can be found here: https://www.tasc.ie/assets/files/pdf/tasc_response_to_ibec_tax_analysis.pdf

TASC's full commentary on Budget 2015, an Executive Summary and other budget analysis are all available here: http://www.tasc.ie/researchpolicy/projects/equality-budget/