MacSharry produces discussion paper on taxation for working families with children

A Sligo/Leitrim TD is launching a discussion paper proposing what he says would be a fairer taxation system for working families with children.

Fianna Fail Deputy Marc MacSharry says his proposals identify some of the so-called ‘welfare trap’ issues where lower to middle income working families are actually better off on welfare.

Deputy MacSharry says the taxation system should recognise the cost of raising a child in a similar way as the welfare system does.

To do this, he is proposing a child tax credit or allowance per child for working families, up to a maximum of four children.

For the purpose of his discussion paper, he set the credit or allowance at the same level as the social welfare child allowance payment.

Howver, he says to do this in reality would be reckless, as the annual cost would be over one billion euro.

But he says he wants to start a debate which he hopes will lead to the acceptance of the principle of a child tax credit. to be introduced at a modest level and increased over 10 to 20 years.

He says a starting point might be the government committing 100 to 150 million euro per year for such a measure.

He adds that the benefit of this would be significant and would ensure that families are always better off working than on welfare.