Social and tax plans must go "hand in hand"

REMOVAL of tax breaks and loopholes in company taxation and changes in domestic property tax are among the tax reform plans of Democratic Left.

At a public seminar in Dublin yesterday, the party's leader, Mr Proinsias De Rossa, stressed the need for an integrated approach to tax and social welfare reform. The Minister for Social Welfare said there was need for more than tax reform.

"Just as social and economic development must go hand in hand, so must the tax and social policies that either help or impede them," he said.

Poverty and unemployment traps have been created because the tax and social welfare systems operate at cross purposes, he argued. The report and recommendations of the Expert Group set up by the Government in 1993 should be used as the basis for reforming Government tax policy, he said.

Taxation was needed to ensure high quality health and social services, Mr De Rossa said.

Democratic Left wants to achieve "a society which values work and enterprise encourages employment and self employment makes it easier and more worthwhile for employers to employ and workers to work a society that rewards workers fairly and has a social consensus in favour of the equitable financing of both social protection and economic development," he told the seminar.

Some tax breaks and loopholes available to companies are unnecessary and the taxation of wealth and property is not yet fairly balanced, he argued.

Democratic Left wants to abolish water charges as it believes they are a form of double taxation not related to the taxpayer's ability to pay and they impact most heavily on relatively low income households, Mr De Rossa said.

Domestic property tax should be reformed to make it "fairer and more effective", he said. The tax system, including property tax, should be based on ability to pay.