A chara, - Garret FitzGerald is mistaken in writing that the business organisation IBEC advised the Government against cutting the top tax rate (The Irish Times, January 24th). In fact, it lobbied very hard for this move and for a structure of tax cuts which would give the greatest benefits to the better off. This is what Charlie McCreevy delivered and IBEC warmly welcomed.
Dr FitzGerald's mistake is understandable as employers' organisations have been loudly complaining about the problems of recruiting workers at low wages. These problems can be overcome by a minimum wage, by tax reductions designed to reduce the tax take from low-paid workers, or by both. As IBEC opposes the minimum wage it would appear to be essential to its members that it would support tax reform which benefits low and middle earners.
The problem would appear to be that IBEC represents not only entrepreneurs, whose income depends on the growth of their businesses, but also senior managers, whose income depends on their salaries. In lobbying for tax reform which benefits the better-off, the interests of entrepreneurs and the underlying health of the economy obviously came second. As a result there was no increase in the incentive for unemployed people to take up the jobs offered by most employers.
Finally, Dr FitzGerald ignores the fact that the INOU was also involved in the negotiations of Partnership 2000. It was also our understanding that, in a programme committed to "social inclusion", tax reform would be designed to improve the takehome pay of ordinary workers and so support the long-term unemployed in taking the steps to become such workers. In the failure to deliver this IBEC must shoulder responsibility along with the Government. - Yours, etc., Michael Allen, General Secretary, Irish National Organisation of the Unemployed,
Gardiner Row, Dublin 1.