2014-04-22 - Socio Economic Review 2014 - Full text and cover - FINAL

Reforming and broadening the tax base
Social Justice Ireland believes that there is merit in developing a tax package which
places less emphasis on taxing people and organisations on what they earn by their
own useful work and enterprise, or on the value they add or on what they contribute
to the common good. Rather, the tax that people and organisations should be
required to pay should be based more on the value they subtract by their use of
common resources. Whatever changes are made should also be guided by the need
to build a fairer taxation system, one which adheres to our already stated core policy
objective.
There are a number of approaches available to Government in reforming the tax
base. Recent Budgets have made some progress in addressing some of these issues
while the 2009 Commission on Taxation Report highlighted many areas that
require further reform. A short review of the areas we consider a priority are
presented below across the following subsections:
Tax Expenditures / Tax Reliefs
Minimum Effective Tax Rates for Higher Earners
Corporation Taxes
Site Value Tax
Second Homes
Taxing Windfall Gains
Financial Transactions Tax
Carbon Taxes
Tax Expenditures / Tax Reliefs
A significant outcome from the Commission on Taxation is contained in part eight
of its Report which details all the tax breaks (or “tax expenditures” as they are
referred to officially). Subsequently, two members of the Commission produced a
detailed report for the Trinity College Policy Institute which offered further insight
into this issue (Collins and Walsh, 2010). Since then, the annual reporting of the
costs of tax expenditures has improved considerably with much more details than
in the past being published in the annual Revenue Commissioners Statistical Report.
The most recent tax expenditure data was published in 2012 by the Revenue
Commissioners and covers the tax year 2010 (2012:17-24). In summarising this data,
Collins (2013:15-19) noted that the top 30 tax breaks involve revenue forgone of €17
billion. Added to this were the tax break costs of legacy property tax reliefs (€386
million in 2010) and a series of smaller tax expenditures for which the Revenue do
90 Socio-Economic Review 2014