CORI urges Government to increase tax credits

The Government should increase tax credits instead of widening the 20 per cent tax band the Conference of Religious of Ireland…

The Government should increase tax credits instead of widening the 20 per cent tax band the Conference of Religious of Ireland (CORI) said today.

"Increasing tax credits rather than widening the tax band has the additional advantage of addressing the working poor issue which is emerging as a growing problem that requires a policy response," Fr Sean Healy and Sr Brigid Reynolds of CORI said in a paper presented at CORI Justice Commission's 16th annual Social Policy Conference in Dublin today.

The topic for the conference was A fairer tax system for a fairer Ireland.

According Fr Healy and Sr Reynolds, increasing tax credits would give every earner €512 a year more than what they have at present.

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Simply widening the tax band the Government would give €1,210 to those earning over €33,500 and nothing to those earning less than €28,000 they said.

In their paper, Fr Healy and Sr Reynolds, pointed out that over a quarter of those at risk from poverty live in a household headed by a person who is in paid employment.

They argue that the most effective way of targeting this group is to use the money available for tax reductions to increase tax credits and make these tax credits refundable.

This would have a direct positive impact on reducing the numbers of people in the working poor category they said.

Meanwhile, Mr Michael Collins of Trinity College Urban Institute Ireland told the conference, Ireland needs to increase total tax-take as the Government faces a number of unavoidable new demands on its resources.

Among the demands highlighted by Mr Collins were; EU contributions, fines arising from the Kyoto protocol, demographic demands, overseas development aid and commitments contained in the National Anti-Poverty Strategy.

Mr Collins said that with better fiscal management, increases in the tax burden are not necessary in the immediate short-term.

Luke Cassidy

Luke Cassidy

Luke Cassidy is Digital Production Editor of The Irish Times