Labour criticises Govt for 'stealth taxes'

Low- and middle-income families are being crippled by higher interest rates, high inflation and Government-imposed "stealth taxes", the Labour Party has claimed.

The party said: "What families need from next week's budget is not pre-election stunts or more tax breaks for the well-off but a measured budget that targets resources at the needs of families."

Labour leader Pat Rabbitte said he believed that available resources for tax reform should be channelled into higher personal credits, and widening of the standard rate band.

He criticised the Government over its imposition of "stealth taxes" - the most significant of which, he said, has been the under-indexation of the standard rate band, relative to the average industrial wage.

"Individuals on modest incomes are paying 42 per cent on additional earnings," he said.

Rectifying this, Mr Rabbitte said, should be a major priority in the budget, in the interests of both efficiency and fairness.

He described recent claims by the Government that it had met its commitment that no more than 20 per cent of taxpayers would pay at the 42 per cent rate as "farcical and mere sophistry".

"What was a clear commitment on marginal rates has been magically reconstructed as a commitment in terms of average rates," he added.

This Government, Mr Rabbitte said, had a record of transferring wealth up the income scale, through generous tax breaks to the well off.

"They continue to hawk expensive schemes, particularly the tax break for super-private hospitals. They have refused to introduce a minimum rate of tax for high earners, to limit the extent to which tax breaks can be used to reduce tax liabilities."

"They should do so on Wednesday next," he said.