Can Labour Cut Tax?

As ever, the folks at the Cedar Lounge Revolution have fantastic analysis of policy. In this case it is Pat Rabbitte’s commitment to cut the standard rate of tax from 20% to 18% while financing the public service commitments they have promised.

“That’s why the announcement by Rabbitte that Labour is going to cut 2% off the standard rate of tax, benefitting low AND high income earners, should set alarm bells ringing. Like most people, my immediate reaction was to calculate how much it would mean for me a week and it added up to a little over a week’s salary. The next question I asked myself, was who’s week’s salary was I getting. A nurse? A community garda? A civil servant?

These five commitments alone amount to an extra billion a year in spending on an annual basis. It ignores the extra spending they’re promising in public transport, such as the proposal to cut Dublin Bus fares for example, or their proposals for higher social welfare spending. Where is the money to come from? This is not the 1980s. Pat can’t simply get De Rossa to speed-dial Pyongyang again.”

Read the Ceadar Lounge response.

Further to the Cedar’s response is Gerry’s response to the Labour Leaders Speech.

“Also, to be able to fund a tax cut and fund all your public service improvements, you need a continued rate of economic growth between about four or five per cent for the next few years. That assumption undermines the possibility of a more thoroughgoing critique of our economic state, something I still think is central to a credible Labour programme.”

Read IE-Politics reponse.