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BEN SCALLAN: Fine Gael is not a low tax party anymore

Anyone who knows of Fine Gael is aware that the party’s brand is based largely on being a laissez-faire, pro-business, low tax party.

In 2018, then-Taoiseach Leo Varadkar tried to position his party as the party of tax cuts, making bold promises and big assurances of cuts for years to come.

And that certainly sounds great in theory. But one has to ask, is this reputation earned? Does Fine Gael tend towards low taxes in reality?

For starters, it’s worth noting that tax cuts promised by Fine Gael frequently fail to materialise.

Take the USC, for instance, which for years they dubbed a “hated” tax and pledged to abolish – only for Finance Minister Paschal Donohoe to turn around last week and insist that it was never temporary.

Moreover, taxes that they insisted would not be put in place ultimately were.

The party’s initial position on property tax, for example, was that “an annual recurring tax on the family home is unfair.” In fact, Enda Kenny once said that such a tax is unjust, immoral and unfair.

Fast forward to 2013, when they introduced a property tax, which has remained in place ever since.

Take the 12.5% corporation tax rate as another example. In 2017 Leo Varadkar said changing the rate would “damage our country, its employment prospects, and its economy.”

Smash cut to 2021, and lo and behold – the 12.5% rate has been raised to 15% under international pressure. And in fact, Finance Minister Paschal Donohoe even admitted that this move would lose us billions, as he signed up to the deal anyway.

In addition to this, many new taxes have been introduced, including the ever-increasing carbon tax, which is set to continue rising annually for the next decade or so. The government is discussing introducing a media tax to bail out failing journalism bodies – even as the cost of living skyrockets nationwide.

As the housing crisis continues to grip the country, it’s worth noting that according to the SCSI, as much as 16% of housing cost is purely various government taxes and levies.

What this means is, if you bought a house for €350,000, €56,000 of that would be purely going towards various government charges and not a part of the actual house cost itself.

So to summarise, taxes the government have said they would get rid of, they haven’t. Taxes they’ve said they wouldn’t introduce, they have. And in recent years, all kinds of new taxes have been invented and imposed on the economy. This is the plain reality of the situation.

Now, if one wanted to be charitable, you could argue that maybe Fine Gael is more fiscally prudent and responsible with the taxes they take in than other parties. That’s certainly what they would say – as Leo Varadkar once claimed, “only Fine Gael can be trusted when it comes to our economy and our public finances.” Maybe financial efficiency is where they come into their own.

But on closer inspection, that doesn’t appear to be true either.

From the multi-million euro Dáil printer on the micro level, to the multi-billion St. James’ children’s hospital (delivery date TBD) and the massive cost of the rural broadband plan at the larger scale, this does not paint a picture of an extremely frugal, fiscally-conservative regime.

A decade ago in 2011 Fine Gael identified 145 quangos as useless wastes of taxpayer money and vowed to eliminate them if the party was elected. 6 years later, in 2017, a grand total of 17 of these were disbanded, constituting years of substantial waste. The list goes on.

Over the last 10 years, Ireland’s annual budgets have either stayed the same or increased dramatically, with last year seeing the highest tax take in the nation’s history.

And yet, almost any public service you could name has either failed to improve or has gotten substantially worse as time goes on.

Healthcare is a catastrophe. Housing is a disaster. Law and order is spiralling out of control. The Defence Forces are in bits. The roads are riddled with potholes.

In other words, the government has more money and more resources almost every single year than it did before, and yet everything seems to stay crap or get even worse. It’s like the more taxes the public forks over, the faster everything deteriorates.

And so at a certain stage it’s worth asking ourselves: Is this fiscal responsibility? Is this what economically conservative governance looks like?

This country urgently needs to have a conversation about the role of the state in the economy, and face up to the reality that giving the government ever more financial resources does not necessarily mean better services. If every fiver we give ends up in the paper shredder that is bureaucratic waste, increasing taxes will not yield any results.

A major paradigm shift is needed, and it starts by realising that our current line of thinking about economics is not working.

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