SIPTU’S JACK O’Connor has called for the introduction of a levy on all incomes of more than €100,000 to raise about €1 billion for the establishment of a strategic investment bank to kick-start the economy.
The head of the State’s largest trade union said the revenue generated by the levy, coupled with money from the National Pension Reserve Fund, could create a venture capital fund for start-up businesses.
Under Siptu’s proposal, people earning between €100,000 and €125,000 would face an additional income levy of 5 per cent. This would increase to 8 per cent for those earning more than €125,000; 12 per cent for those earning more than €200,000 and 15 per cent for those earning more than €1 million. The union calculates this would bring in an extra €1.01 billion in tax.
Speaking at the Jim Connell Festival in Crossakiel, Co Meath, Mr O’Connor said: “High earners who are levied through the tax code would receive a dividend on the performance of the funds and could ultimately hope to get their money back.” He said there would be no guarantee that a levy would offer a dividend but said that if the State-run venture capital fund was managed “properly then it is reasonable to assume it could generate a return”. He said the country was in a “terribly precarious situation” and an innovative approach was needed to generate investment opportunities.
Mr O’Connor said the €3 billion fund, made up of €2 billion from the pension reserve and €1 billion from the levy, “would increase investment in the economy by 16 per cent this year, without accounting for what additional amounts could be raised through additional borrowing and risk sharing with private investors”.
He described growth as the only means by which Ireland could avoid default and cautioned against those who saw default as a quick fix for the economy in the same way that deflationary austerity has been promoted as a fast route to solvency and economic recovery since 2008.
“Those opposed to taxing the wealthy always cite the negative implications for retaining such people in Ireland,” he said. “This risk would be reduced if they could be assured it would only last for a limited period. People on high incomes would doubtlessly complain, but they would get the money back. In any event they will lose a great deal more in a disorderly default.”
Mr O’Connor was speaking as a number of rallies took place to mark May Day. The largest rally was organised by the Dublin Council of Trade Unions and saw hundreds of people march from Parnell Square to the James Connolly memorial opposite Liberty Hall. It was attended by representatives of unions, socialist groups and left-wing political parties.
Speaking ahead of the rally against austerity, Irish Congress of Trade Unions general secretary David Begg called on the Government to end its “obsession with self-defeating austerity measures that have been an unmitigated disaster for Irish society”.
