Is there any tax we’d accept for our country’s sake?
Published on May 20, 2011. Appeared in Independent Group Newspapers. Written by Gavin Duffy.
There has been an awful lot written about the funding of the Government’s job initiative through a levy on pensions. Levy of course is a euphemism for tax. In fact there has been so much criticism of this “attack on pensioners” that we have almost forgotten what it is funding. The money collected from this tax will go to help people find work and assisting businesses to grow.
But I’d like to challenge all the criticisms of the pension levy. Our country runs an €18 billion euro deficit a year. That is we take in eighteen billion euro less than we spend running the country. We have to borrow that money and as the international capital markets were not prepared to lend to us at a reasonable interest rate, then we had to access the money from the IMF and ECB.
An absolute imperative for our nation is to reduce that deficit. We either cut back on social welfare, health and education, our three biggest areas of expenditure or we raise taxes. If we raise taxes on income, people’s house hold budget, what they spend to live on, will be hit directly. If we increase VAT we negatively impact on consumer spending.
So the Government is right to find sources of revenue that don’t make our situation worse and won’t be felt directly by people immediately. In this regard targeting pensions was justified.
What is now clear is whatever the Government decides to do to generate revenue it will be met by widespread whinging and gnashing of teeth. Everybody says don’t tax the lower paid. Well then those of us who have accumulated €78 billion euro in pension funds maybe we can afford to pay this tax and if gets people back to work, surely that will be good for all of us in the longer term.