Fianna Fáil Councillor Jim O’Callaghan has criticised Renua’s proposal for a flat tax of 23% on all income, describing it as “a sign of a party desperate for attention”.
The Dublin Bay South candidate said, “It is an economically illiterate proposal favoured only by eccentrics and the super-rich. It is a policy so senseless that even its main proponent in Britain, the UK Independence Party, abandoned it. It is a fringe position in the US Republican Party.
“Renua’s proposal would create the single biggest transfer of the tax burden from the better-paid to the worse-paid in the history of the State. Low and medium earners would face a massive percentage increase in their income tax, while the highest earners would receive a modest percentage reduction.
“This plan would make Ireland’s one of the most regressive tax system in the OECD. It would create a host of perverse side effects, such as creating a massive disincentive for the unemployed to enter employment, thereby trapping a generation in employment and holding back the national economic recovery.
“Renua have admitted that their proposal will reduce the tax take by €1 billion. They pretend this can be found within the black economy, when in truth there is no crock of gold waiting to be discovered in the black economy.
“The real issue here is not about flat tax because the policy will never be implemented. The real issue is that Renua is already so desperate for attention and so lacking in substance that it is forced to resort to recycling discarded UKIP policies to capture some headlines.
“There are significant problems with the Irish tax system. It is confusing; complex and unfair to the self-employed. Tax experts indicate that high marginal rates are acting as a disincentive to inward investment, because executives prefer to move their businesses to countries with more balanced income tax structures. These are all elements in desperate need for reform.”
“Although it is has many problems and is badly in need of reform, Ireland has one of the most progressive taxation systems in the world, with high earners paying significantly higher percentage of their income in tax than medium earners; and low-earners paying little or no tax.”
O’Callaghan outlined the key aspects of Fianna Fáil’s tax proposals, including reduction in USC, simplification of the tax code, and targeted tax reliefs for working parents.