The squeezed middle

Sir, – In a recent editorial (February 6th) you stated the Government had few choices with regard to its fiscal policy – either…

Sir, – In a recent editorial (February 6th) you stated the Government had few choices with regard to its fiscal policy – either cut services or cut public service pay. There was no mention of the tax system. Yet taxation frames the economy. It rewards some groups and some activities – the wealthy and corporate profiteering, for example, and as described in your current series of articles, contributes to the squeezing of other sections of society.

According to your newspaper (Home News, January 28th), Ireland is home to 620 millionaires but almost half of them pay less than 30 per cent income tax. Almost half of those with incomes between €500,000 and €1,000,000 are paying less than 30 per cent income tax, and slightly over half of those earning between €250,000 and €500,000 were in this tax bracket.

While people earning €50,000 or less in our society (the so-called squeezed middle) can pay the higher rate of tax of 41 per cent – it kicks in at incomes above €41,800 – some high earners pay exactly the same tax (41 per cent) but almost half of them pay less and many avail of tax reliefs to pay even less.

Clearly this is not an equitable, efficient or progressive tax system. It is an acknowledged fact that the raft of indirect taxes introduced by this Government regressively hits those on lower incomes harder than those on higher incomes.

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Indirect taxes dampen demand and in turn this leads to a reduction in growth and an increase in unemployment. This is basic economics. Choking off consumer demand – the oxygen that makes economies work – through indirect taxation and reducing the public services must be seen in the context of big business and the wealthy occupying privileged positions in the tax system.

Transnational corporations are making obscene profits as a result of their tax status here while our health and education services are decimated. It is obvious that the tax system must be changed so that wealthy individuals and corporations play a more productive role in helping recovery.

An economic model that sacrifices our education and health systems in order to allow the richest members of our society to accumulate a larger and larger share of the cake will never truly recover and will eventually self-destruct. – Yours, etc,

Dr COLM O’DOHERTY,

Mounthawk,

Tralee, Co Kerry.

Sir, – Maureen Gaffney (HEALTHplus, February 7th) is quite simply a national treasure. She is my nominee for minister for positivity. – Yours, etc,

SEÁN MacENTEE,

Bettystown Cross,

Co Meath.