Sir, - In her article praising her party's tax-cutting policy, the Tanaiste, Mary Harney, implies that Ireland is a very heavily taxed economy. In fact taxation as a percentage of national income in Ireland is lower than in most EU countries. What is remarkable about the Irish taxation system is the huge contribution of taxes on wages and salaries and the minuscule contribution of taxes on property and profits to total tax revenue compared with other developed countries. The most important tax change introduced by Ms Harney's government was a halving of capital gains tax, a benefit to the wealthy which was much more dramatic than the small increases in take-home pay which a worker on the average industrial wage has gained from the half-hearted implementation of tax credits.
Ms Harney at one time purported to be in favour of a comprehensive property tax but has made no effort to introduce such a tax. Indeed Mr Michael McDowell campaigned for the abolition of the Residential Property Tax. Ms Harney supports the tax-relief schemes for seaside towns which have blighted most of those towns while enriching investors who are certainly not PAYE workers. She has no difficulties with the plethora of tax-avoidance schemes (including tax relief for car parks in a car-clogged city!) which ensure that the wealthy can legally minimise their tax liabilities. (It is possible through "tax planning", for a person earning £1 million in Ireland to pay no income tax at all).
Ms Harney states that socialists are in favour of high taxes. What socialists and other people who believe in justice and fairness favour is equity in the tax system. The Progressive Democrats have since their foundation believed in increasing the wealth of the already well-off while punishing the poor.
In 1988 the Economist, in a survey article on the Irish economy, stated that Ireland was "awful for wage earners but lovely for property and profits". Since 1988 Ireland is a little less awful for wage earners but, due to the policies favoured by the PDs and despite Ms Harney's rhetoric, it has become even lovelier for property and profits. - Yours, etc.,
S. Byrne, Sutton Park, Dublin 13.