The American Chamber in Ireland has nailed its colours to the mast in uncompromising fashion. In a submission to Minister for Finance Paschal Donohoe, it says that almost 40 per cent of multinational managers in the Republic highlight personal tax as a barrier to growth.
In the submission, Next Century Ireland, the chamber says its members want a commitment that the Government will not increase personal taxes for the rest of its term.
In fact, they want to see progress towards cutting “this burden to bring it in line with international standards”.
Arguing against any increase in personal tax is a regular chamber refrain, and a recurring feature of its pre-budget wishlist. But, in a year when Donohoe and the Minister for Public Expenditure, Michael McGrath, face difficult decisions on how to wean Ireland Inc of artificial life-support put in place during the Covid pandemic as well as looking to at least begin to address our world-topping national debt, it is all the more pointed.
It also jars alongside another well-worn AmCham campaign piece – investment in national infrastructure.
Ireland is already dealing with annual budget deficits even without accelerating infrastructure spending. And what additional capacity was allowed for in the summer economic statement appears destined for housing, not roads or healthcare.
In any case, according to the OECD, we are not lagging international standards at all. Its Taxing Wages 2021 report notes that the average worker in Ireland has a lower "tax wedge" – a measure of all tax on labour income, paid both by the employee and the employer – than all other EU members in the organisation bar Czechia (the former Czech Republic) and, depending on their circumstances, Poland.
And in terms of net average tax rates paid by workers, Ireland is bang on the OECD average for single people and among the least taxing on families, the report says.
Having gone out on a limb for the chamber in his continued refusal to fall into line on the proposed global minimum rate of corporate taxation, the Minister might have expected a little less stridency from the US business leaders on this occasion.
