PRESS RELEASE

20/02/2006

SF’s tax hike plans would destroy the Irish economy - Kelleher

Cork North-Central Fianna Fáil TD Billy Kelleher has launched a strong attack on Sinn Féin's economic policies after the party’s Ard Fheis at the weekend.

The deputy Government chief whip was speaking after Sinn Féin leader Gerry Adams restated his party's commitment to hiking taxes.

‘The reality is that Sinn Féin's policies would do very significant damage to our economy. Hiking taxes would penalise initiative and remove incentives. It would reverse the huge progress we have made and would mean a return to high unemployment and mass emigration.

‘Gerry Adams' call for increases in corporation, capital and income tax rates makes no sense whatsoever. It flies in the face of all the evidence showing that cutting tax on enterprise, investment and labour actually increases the receipts from these taxes.

‘Fianna Fáil in Government has taken a practical and sensible approach to taxation. Tax rates have been set so as to boost the economy and maximise the return. This policy has succeeded, with over half a million new jobs created and a level of growth that has consistently outperformed our European partners.

‘Since 1997, cuts in capital and corporation tax have dramatically increased the revenues. Corporation taxes take in more than two and a half times what they did in 1997. The boost to capital taxes has been spectacular with a more than 10-fold increase over eight years.

‘Furthermore, the share of income taxes paid by the top 1pc of earners has increased from 14pc in 1997 to 20pc in 2005. No one can believe that we would have seen such returns if we had actually increased taxes as Sinn Féin would have us do,’ said Deputy Kelleher.

He rejected Sinn Féin's claim that the Nordic economies supported their case for high taxes.

‘The reality is somewhat different. In fact in recent times, the International Monetary Fund (IMF) has applauded Denmark for cutting labour taxes. The IMF has highlighted the boost to disposable income from tax cuts in Sweden. Moreover, Finland's 2005 budget cut corporate and capital tax and began a three-year income tax cut,’ said Deputy Kelleher.

ENDS