Madam, – Your correspondent Arthur Beesley (Opinion, August 9th) is to be congratulated for spotting the glaring inequality at the heart of this Government’s (failed) plan for recovery: virtually the entire burden of new taxes and levies is borne by working people, primarily in the low- and middle- income brackets, while business taxes are kept perilously low. Why should labour shoulder the entire “burden of adjustment” while large businesses pay just 12.5 per cent tax on their profits?
Congress made this point to Government on several occasions in 2009, most notably in advance of the December budget. We proposed that the levies on income be extended to corporate income to at least demonstrate an attempt to spread the burden.
It is also our view that low corporate taxes may have contributed to the collapse of the banking sector by ensuring huge after-tax profits and thereby removing any incentive for the banks to act in a prudent and responsible manner.
Hopefully, now that this proposal has received an airing on your pages, we might have some debate about how our Government seems determined to load the entire cost of the collapse onto working people and those on welfare. – Yours, etc,
Madam, – It is always appropriate to question the status quo, especially when the status quo has achieved “totemic” status – I refer to the opinion piece by Arthur Beesley on Ireland’s corporation tax policy (August 9th).
The Irish tax regime is particularly stringent, and collects more corporation tax relative to company activity than almost any of our European neighbours with higher corporation tax rates. This is because we offer almost no allowances and reliefs to companies other than a low rate. Our tax regime for profits when they are paid out of the company is positively savage.
Perhaps the important question in relation to corporation tax is not about the rate but about how company activity can best contribute to the Exchequer. Increasing the corporation tax rate would just mean that there would be less income available from which to collect income tax – the equation is that simple. – Yours, etc,