Republican News · Thursday 12 December 2002

McCreevy's indirect tax shuffle

A Chairde,

No one should be surprised by the latest Budget. Wake up to the PD/FF/EU fiscal ideological agenda - Thatcherism and more. Shift the burden of tax from direct to indirect tax, and cut back social services to suit the declining tax base. And that is just what we all got last week.

National contributions to the EU are based on VAT returns. The EU for at least 30 years has a most explicit fiscal agenda which is to replace direct (income) taxation by Value Added Tax (VAT), what used to be called indirect taxation, like purchase tax, excise duties.

Why? Because indirect taxes fall most heavily on the poor (who spend the largest proportion of their incomes), whereas direct (income) taxes are (and can be adjusted to be) progressive - which means that tax on higher incomes can be at a higher rate than tax on lower incomes.

Whatever about the dispute about cuts, and whether they were 'necessary' at all, one thing is quite clear - Minister McCreevy's budget introduced a hundred little extras in indirect taxes hikes, leaving, as he repetitively claimed, income tax largely the same.

d, because the taxes he introduced are mostly itsy bitsy, you can be sure there won't be enough money in the kitty to pay for the social services we all need, apart from the very rich who like to pay for their own. And who can blame them, seeing that that is the only way to get them!

d so, without the surplus swilling about, government has a good reason to say if you want to get the services you deserve - housing, education health, waste and so on - then the only way you are going to get them is through privatising their supply of your essential needs.

Isn't it nice to know that every time your child breaks a leg and needs Casualty, someone somewhere will be making a little profit out of your misfortune.

Isn't it nice to know that if Casualty is shut, or there's no beds available for the granny, then that's only because the mechanisms of the marketplace meant that it wasn't profitable to keep them running.

While the trade unions worry about percentage wage increases, which inflation at the drop of a hat will negate, they might spare a thought for the quality of everybody's life - education, health, housing, waste, and demand, out of partnership, decent free services provided by government for all of us.

Ballymacshame
Name and address supplied

Free drink?

A Chara,

It's that time of year again, surprise and cheer by the few, and poverty and worry by the many. No, I don't mean Christmas, it's budget time. So what surprises did we get this year? Well there were some bad and some good, depending upon to whom you speak. As usual the opposition are claiming they could have done better. Let us not forget that they had their chance, and they didn't do better.

I'm putting aside my own political beliefs and viewing the budget from the outside. I actually think the Fianna Fail finance minister was very clever. He has abolished the first time buyers grant, which he viewed as not being much of a benefit. Try telling this to those struggling in the housing market, especially those in the new development at Hazelcroft/Dunlara in Finglas

He increased the services rate of VAT from 12.5% to 13.5%. This gives rise to among many things, building costs that will no doubt be passed on to house buyers by builders. Another slap in the face for homebuyers.

There was no increase in the pint - hooray - but there was an increase in the spirits price and in particular the alco-pops.

As always, the cigs went up. I am not entirely sure that this is a productive exercise. Many people argue that the best way to stop people smoking is to drive the price up to a point where they won't be able to afford them. Why is it then that those in deep poverty turn to smoking to relieve the stress? Why is it then that more people, especially teenagers smoke now than did before. A recent article by the Niall Gormaely in the Northside People argued that price increases don't stop people smoking. I agree with him.

So how is McCreevy clever? The budget was many things but most of all it was a wake up call. The budget affects mostly those in the 18-30 age group. The group that has the most first time buyers, the most alco-pop drinkers and the lowest turnout in voter population.

So next time the local and national elections come around, get up and go out and tell those in government that you're a force to be reckoned with and must be listened to. The sad part of this is that most 18-30's will skip this letter unless it has a headline of 'Free Drink'.

Raymond Darling,

Ballymun,

Dublin 9