DUBIN: Renua Ireland is working on a radical new policy that would see the introduction of a flat tax on all income, with bands and most allowances being scrapped.
The disclosure was made during the party’s first think-in in Dublin, during a session on the economy.
Businessman Declan Ganley, who was a guest speaker, told delegates that a flat tax regime was a “great disrupter” and would create a huge buzz that would attract international business and finance to Ireland.
“It’s going to be controversial. You can welcome the debate. It’s going to create a long-term sustainable economy,” he said.
A flat rate is a system of taxation where one tax rate is applied from the smallest incomes, including social welfare, to the largest.
There are variations on the idea, including the concept of a negative income tax, put forward by Milton Friedman in his 1962 book Capitalism and Freedom.
A negative income tax would allow personal deductions, or a threshold, before the flat tax was applied.
If the person’s income did not reach that threshold, they would be paid a negative tax calculated on the amount of the shortfall. This would replace some welfare payments.
Renua chairman Eddie Hobbs disclosed that Mr Ganley’s idea had already been taken up by the party and work on a policy was at an advanced stage.
It is thought that Renua does not favour a true flat tax, but one that would include deductions and balancing measures to protect vulnerable families and individuals.
Mr Ganley urged the party not to shy away from big ideas.
