May 26, 2010

Tax Base and Innovation

Posted in Your Ideas ·
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The IDA do some fantastic work overseas, attracting potential investors to Ireland. They cite our young, vibrant, and innovative workforce as one of the main reasons to do business in Ireland. Given the current performance of the government I wonder for how long their audiences will believe them, because I certainly don\’t see innovation at work here.

The people of Ireland and of the world are faced with two major crises today, not one. These are the financial crisis, of course, and the environmental crisis, which I feel the public have forgotten about in their joyous pursuit of blaming the government for everything. Here is one way we could display the innovation that the IDA speak of and tackle both crises in one deft strategic move. Increase the tax on fuel. There were roughly 1.7 million cars in Ireland in 2006, the average mileage was 17,000Km per year. If we take a km per litre value of 10km per litre of fuel (RAC website) we are burning 2.89 billion litres of fuel a year in our cars. . Raising the price of fuel by €1 a litre could raise in the region of €2 billion. I say 2 rather than 2.89 billion as people will substitue out of car usage and into public transport, which is the whole point of the exercise anyway. We need to raise somewhere in the order of €3.5 billion this year. This tax brings us more than half way there without even touching income taxes, income levies, health levies, capital gains tax, and any other counter-productive taxes.

Commuters will find this suggestion hard to digest, but let\’s face it, spending three to four hours a day in a car, outside of working hours is no way to live one\’s life. This sort of behaviour should be discouraged. Of course there are those that were forced to become commuters with the exorbitant house prices experienced in the last few years. Concessions can be made for these people. The point must not be lost though, the public finances must be improved, and so must the health of our planet. This tax would be a big step in helping these two causes.

There are other ways to stimulate our green economy which other people have mentioned already on this site. These should be implemented.

Whether we like it or not the government is representative of all of us. If the government continue to display the lack of innovation and forward thinking displayed this week, what message will that send to those overseas that we are trying to attract. We need to prove to the world that we a great people, rather than just say we are. We need to better ourselves. Workers that have fattened themselves on high salaries for doing little productive work have no right to complain about losing their jobs. The world is flat; workers in other countries that can do the same job in just as competent a manner, for less, should be rewarded. It is only in the face of competition that we develop an edge. Let us develop this edge and prove that we are a great people.