Donohoe should reveal tax plans – and soon

POLITICIANS’ fates are often decided by voters who take in their political information in a partial and distant fashion. So at election time, it is often easier to put over a message about cutting tax rates or even abolishing certain taxes. Such changes are more easily understood by citizens rather than talk of tax thresholds and bands. In the Bertie Ahern era, Fianna Fáil mainly opted for rate cuts, and at the last election Fine Gael rather rashly pledged to abolish the hated Universal Social Charge.

Curiously, many voters chose better services over promises of lower tax when they last went to vote in February 2016. Still, all signs were that Finance Minister Paschal Donohoe, with serious largesse to dispense, would unleash pre-election tax cuts in next October’s Budget.

But not so, we learn from yesterday’s ‘Sunday Independent’. Now we find the Government has woken up to the reality that the country might be headed for financial calamity as it did a decade ago.

Once more the financial and political cycles are overlapping. And the big danger is that the Government just might pour petrol on the bonfire via tax cuts, fuelling an economy which is already racing ahead of its eurozone neighbours.

Mr Donohoe is likely to focus tax changes on increasing the current ridiculously low threshold of €34,550 at which a single worker is hit with the higher tax rate. He will also focus on giving workers better social cover, especially the self-employed, who have not been fairly treated.

There are very good arguments for such an approach. But we must hear them sooner rather than later lest the Government be accused of dithering over this vital issue.