Ireland needs to introduce a wealth tax to bring public services in line with other European nations, according to the incoming president of the Irish Congress of Trade Unions.
Kevin Callanan is also calling for an increase in the PRSE contributions paid by employers and new fines for companies that carry out “environmentally-damaging activities.”
At a conference in Belfast yesterday, he noted that per person, Ireland spent over €3,500 less on public service that its nearest European counterparts in 2019 – a figure that is mirrored by the shortfall in employer PRSI contributions here.
On Newstalk Breakfast this morning, he said the pandemic offers an opportunity to shift the tax burden back towards those who can most afford to pay it.
“What we are saying is, we need to come out of the pandemic with better jobs, better lives and a better planet,” he said.
“All of these things need to change in way that would be acceptable but the reality is for most people listening to your programme now, they are paying too much tax while a very small cohort of people are not paying enough.
“I think if we can address that, we can actually solve these issues.”
Inequality
He said ordinary workers are currently shouldering too much of the tax burden.
“What Congress (ICTU) is saying is that relatively, labour and consumption is heavily taxed by comparison with capital taxes,” he said.
“What that means in practice is that income tax, VAT and excise duties – the tax that most people listening to this programme pay – are relatively high but our taxes on wealth are relatively low.
“What we need to see coming out of the pandemic is a reset which shifts some of the burden back on those who can most afford to pay it.”
Wealth Tax
He said the wealth tax should focus on assets – rather than people’s primary residential homes.
“There is a lot of wealth in capital stocks,” he said. “Over the last 40 years, there has been a huge growth in inequality so there is an enormous wealth held by corporations and other wealthy individuals.
“In comparison with other modern wealthy European societies, we don’t tax those people enough.
“What we need to see coming out of the pandemic is better public services but also better social protections so that people who fall ill have a decent sick pay scheme so that we have pensions not just for niche areas but right across the economy. So that we have good social protections for those who need them.”
Property
He said an increased tax on people’s primary residential property would be targeting the wrong people.
“The key point here is that this is not something aimed at ordinary people,” he said.
“This is something aimed at trying to extract more of a contribution from the very small number of people who hold very significant amounts of wealth and bring that more in line with other modern European countries.”
Mr Callanan said an increase to employer PRSI contributions would go a long way towards reducing inequality in Ireland.
“The biggest single difference between Ireland and other wealthy modern European societies is the contribution that employers make through pay-related social insurance or the equivalent,” he said.
“In fact, if the employer PRSI was raised to the average in those countries, we would bridge most of the gaps we need to, to ensure that we raise our level of public funding and public services to a European average.”
