High earners could be asked to pay a social tax to help people struggling to make ends meet, the Society of St Vincent de Paul (SVP) proposed today.
The charity has put forward the radical proposal to impose a tax on individuals and couples earning more than €85,000 a year with the proceeds being ring-fenced for the most vulnerable.
In a pre-Budget submission, it said the Government could adopt the levy as a last resort if Exchequer funds cannot meet the needs of the poorest in society.
Professor John Monaghan, SVP vice president, warned Ministers not to use current economic difficulties as an excuse for not increasing welfare payments to more than a quarter of a million people.
“It would be a last resort but we believe it would be acceptable to wealthy people earning over €85,000 a year,” he said.
“Most young couples trying to get a house would be outside that bracket or someone on the average industrial wage.
“We honestly believe people earning a reasonable wage wouldn’t object to making this contribution. It would be relatively small but the effect would be great.”
Although St Vincent de Paul has not decided how large the levy should be, the charity said it would insist money raised is used to fund anti-poverty measures.
Another condition is the taxation period would be limited to two years during turbulent economic times.
“It’s a way of getting guys like me who have done well to give something back to those who haven’t and knowing what we are giving is going towards the poorest people,” continued Prof Monaghan.
In its pre-Budget submission, the St Vincent de Paul said the government must find a way to raise almost 2 billion euro to help marginalised people pay for basic essentials.
“One of our greatest concerns is how people will pay for food, which was unthinkable a year ago,” said SVP president Mairéad Bushnell.
“We know we are in difficult economic times but we are begging the Government not to increase hidden taxes.”
Prof Monaghan also called for an end to incentives for wealthy citizens who invest their money in special schemes supported by tax reliefs.
“There are some very wealthy people who put a lot of money into pension funds and they’re getting tax relief of 41 per cent,” he said.
“It would make much more sense to give the 41 per cent to someone earning €25,000 a year to encourage them to save money.”
PA