It's a question of perspective. The headline of the Labour Party's press release is "Labour will not raise personal tax rates, Rabbitte tells party in Clonmel". The Irish Independent prefers to emphasise "Labour refuses to rule out the introduction of 'wealth taxes'". So does the Indo smell blood and anticipate a bit of class warfare? Probably not, but perhaps the paper expects a bit of controversy nonetheless.
Labour's position on tax is very cautious and risk-averse. Personal income tax rates and indirect tax rates will not be increased. Also, Rabbitte says that he remains convinced that a low rate of corporation tax is central to Irish economic development strategy. What Rabbitte proposes is "a rebalancing of the tax system, so that those on higher incomes do not avoid making a fair contribution to the common purse." It's plain enough that this means some kind of wealth tax or reform of inheritance or capital gains taxes, which seemingly will not be the same as a "1970s style wealth tax".
Of course Labour will not make be explicit about its fiscal policies until the general election rolls around and one assumes the leadership thinks it is being tactically astute. No doubt some would say it's another triumph of process over policy or yet another sign of the victory of political marketing over the politics of conviction. Another way of looking at it is to say that it shows a failure to use the techniques of political marketing in a way that could progress the policy agenda and win more votes.
Polling and focus groups should be able to identify potential Fianna Fáil switchers, a key group if Labour wants to make electoral gains. Rabbitte has made it clear that he wants to win the votes of people who "think Labour" but have tended to vote Fianna Fáil. I'd be astounded if there were not enough of such voters who would be attracted to Labour's social policies and be prepared to consider a fairer tax system to fund such programmes. Consider also this comment:
I have been arguing for some time that the enterprise strategy which served Ireland so well in the 1990s, may not be as successful in the future. We cannot simply assume that the same model will work for ever. Ireland needs to reinvent its approach, and move up the value chain, developing more skilled jobs, with higher pay. Putting that concept into practice, however, is a demanding task.
So a core Labour value would seem to be the promotion of "productive" activities in the broadest possible sense and consequently the opposite of the rentier capitalism of speculators, or tax breaks for the wealthy to put it simply. It's no harm for a party to identify some enemies, however abstract they may be. Maybe now Labour thinks it's a catch-all party and can include everyone inside the tent. No, I'm joking. But I would much prefer if Labour would make political and economic arguments based on conviction and the marshalling of evidence.
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