Updated: 01/05/18 : 07:19:03
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Fair Taxation of Working Families With Children 'Discussion Paper' - Mac Sharry

Sligo/Leitrim TD Marc Mac Sharry has published a 'Discussion Paper’ entitled Fairer Taxation For Working Families with Children. It considers the issue of work versus welfare and suggests that the taxation system recognize the cost of raising a child in a similar way to the welfare system.

Deputy Mac Sharry told Sligo Today, "It identifies some of the welfare trap issues where lower to middle income working families are actually better off on welfare than working. My proposal is the introduction of a child tax credit / allowance per child of working families up to a maximum of 4 children.

"For the purposes of preparing a paper I pitched the allowance / credit at the same level as the social welfare child allowance payment however to do so in reality at that level would be reckless with an annual cost of over €1bn.

"What I am trying to do is start a discussion and a debate which may lead to an acceptance of the principle of a child tax credit / allowance and perhaps see the state make a start and introduce one at a modest level which subject to sustainability and resources could be increased over 2-4 administrations. (10-20years)

"A start might be a government committing perhaps €100-150m per annum to such a measure. The benefits would be significant to low income & middle income working Families while also ensuring that working families are always better off working than being on welfare."

The Sligo based TD continued, "There will be natural caution and concerns in terms of the impact of my proposal on eroding the tax base and so on however having considered all I believe it is the right way to go.

Readers will be aware that from the introduction of taxation in Ireland in 1799 right up to 1986 with the abolition of the child tax allowance working families with children were always taxed somewhat less than those without children.

"My proposal is progressive and so lower and middle incomes would benefit substantially more than those on higher income levels.

"This is a personal proposal which I would like to promote in a general way in the hope that I can start the discussion and perhaps convince all political and state stake holders to support the principle and move towards the introduction of a child tax credit / allowance," concluded Deputy Mac Sharry.