Taxation and the election

Sir, – Elections have consequences and in today’s global geopolitical and economic landscape Ireland’s general election this week will have enormous consequences. All parties are promising significant spending growth – many of these commitments will not be achieved given the coming transatlantic economic storm from US president-elect Donald Trump’s tariff and tax plans. One party here stands out among the three larger parties as planning to dramatically narrow our tax base, pile more taxes on fewer people and pump spending up to what can only be described as astronomical levels. The money simply will not be there. To describe Sinn Féin’s economic plans as undeliverable is a reasonable position given what we now know. Mr Trump is well into implementing his promises, appointing a cabinet based on fealty to him and his public electoral commitments. He will impose high new tariffs on imports and he will reduce corporation tax in the US. He will demand the return of foreign investment by US companies to their homeland. The result will be that US companies in Ireland and elsewhere will be highly incentivised to move at least some of their investments back home. FDI executives, managers and higher earners will be primed to return to the US if Sinn Féin is in pole position after the general election. This incentive is undeniable given Sinn Féin’s public commitments to target higher earners by piling more taxes on them. Our Department of Finance knows that it will take only a small quantum of international capital flight from Ireland to collapse our tax take. Sinn Féin knows this too, but if elected, it will go ahead with its plans to significantly narrow our tax base and pile more taxes on the few who already deliver Ireland’s highly progressive taxation and welfare systems. The top 5 per cent of taxpayers already pay over 48 per cent of all income tax and USC collected in Ireland, a staggering imbalance.

Clearly the Irish economy is overly-dependent for tax revenue on higher-paid employees and multinational companies. Those in the centre of the political spectrum, having introduced all the existing welfare programmes and State spending, know that we have reached the tipping point for many entrepreneurs, multinational managers and executives and domestic investors. Capital, talent and entrepreneurship are mobile – many will depart, with their businesses, ideas, income and capital, if policy choices push through the tipping point. Even the much-vaunted Scandinavian countries balance their taxation systems to spread the burden, thereby retaining a wider tax base. Sinn Féin wants more from the few – it wants more income tax, more inheritance tax, more personal wealth tax and more property tax. We can expect economic carnage if we have a left-leaning government. You get what you vote for – the lessons for Ireland should be obvious – investors do not like the fantasy economics of socialism. – Yours, etc,

MARK MOHAN,

Castleknock,

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