Trade unions have called on the Government to introduce new taxes on wealth and on high earners.
In its pre-Budget submission, released today, the Irish Congress of Trade Unions also maintained that there was “an overwhelming case” for a temporary 2.5 per cent levy to be placed on corporate profits.
Congress suggested that there should be a new levy on wealth above €2 million. It defined wealth as the current value of all assets, including anything over €1 million in the value of private houses.
“In the absence of a comprehensive audit of wealth, it is not certain how much such a tax would raise. However, if it were levied at an annual rate of one per cent on the net market value of the taxable wealth of ordinarily-domiciled individuals, discretionary trusts and private non-trading companies, it could yield €500 million on the basis of €50 billion in taxable wealth.”
Congress also called for a temporary “solidarity levy” on incomes of over €100,000. It placed no figure on this suggested tax. It also maintained that minimum tax for those earning over €100,000 should be 35 per cent.
It also said the universal social charge should be “progressively restructured” to reduce the rate paid by low earners. It also said it was essential that any property tax introduced by the Government was not a flat tax but rather linked to ability to pay.
Congress also called for a review and amendment of planned payments by the Government to unsecured and unguaranteed bondholders of the former Anglo Irish Bank and the large liabilities resulting from promissory notes. It said this arrangement could see the State pay out €4.2 billion annually for the next 14 years.
Congress also argued that significant investment was needed to promote growth and jobs.
It said €2 billion should be allocated from the National Pension Reserve Fund over the next three years. It also said that private pension funds should be made exempt from the new pension levy if they increased investment in the domestic economy by 5 per cent – a move which could generate over €4 billion.
Congress also maintained investment in solidarity bonds by pension schemes should be encouraged and a State holding company should be set up to attract private capital for investment and expansion of commercial State companies.
It also said a new state pension scheme could raise €1 billion over the next year.
Speaking at the launch of the pre-Budget submission, general secretary David Begg again called for the period by which the deficit in the public finances was brought down to three per cent to be extended from 2015 to 2017.
He said the current programme of austerity was not working. “Debt sustainability is a problem for us still and the economy needs to move back from the edge.”
Mr Begg said that the most important deficit facing Ireland was the deficit in the demand for labour. Tthe most effective way to tackle the financial deficit is with policies that create jobs and develop innovative new products and services, he said.
"Austerity is self defeating and is suffocating the economy. Growth is the key to recovery," he said. “The single greatest priority for this budget is to avoid measures that will make the dole queues longer.”