THE ANTI-AUSTERITY ALLIANCE (AAA) is today unveiling a radical alternative budget which would abolish water charges, property tax and USC for low earners.

The AAA, which includes the Socialist Party, and launched a joint election platform with People Before Profit yesterday, said all this would be paid for by taxing higher-earners, including the introduction of a millionaires’ tax.

The AAA is launching its pre-budget submission this morning and has confirmed it is separate to a planned submission from People Before Profit next week, despite the two joining forces for the election.

Speaking to TheJournal.ie yesterday, AAA TD Paul Murphy said his party’s proposals are about broadening the economic debate in Ireland, saying:

Irish politics, establishment politics, operates in an extremely small tight policy space which says that we have to have extremely low corporation tax, we have to low regulation because we have to attract these people, so there’s whole areas that are no go.

In this video, Murphy rejects other parties’ claims that AAA’s economic proposals neither add up nor are they practical:

What AAA wants to spend…

The AAA is advocating the abolition of USC for those earning under €35,000 and halving it for those earning between €35,000 and €70,000, at a cost of €2.1 billion.

There’s also a proposal to build 33,000 homes at a cost of €3.3 billion and acquire 15,000 vacant housing units at a cost of €1.5 billion. Much of this would be done through NAMA and the Ireland Strategic Investment Fund which the AAA says has a combined €5 billion available to do this.

Scrapping water charges and investment in water infrastructure would cost €636 million while abolition of her local property tax would cost €440 million. Included in this is a pledge to refund those who have already paid water charges at a cost of €92 million.

We also put it to Murphy that the local property tax was a form of wealth tax, but he explained why this is not the case:

The party is also proposing to restore the health and education spending cuts since 2008 at a combined cost of nearly €3 billion.

In total AAA is proposing €12.8 billion in extra spending.

And how AAA plans to pay for it…

To pay for this, the AAA is proposing to introduce a financial transactions tax of 0.1% on transactions of bonds and shares and 0.01% on derivatives. This, it claims, would raise €1 billion.

There would also be increases to employers’ PRSI of 5%, raising €3 billion and a 10% increase in the effective rate of income tax for the top 10% of earners, raising €2.7 billion.

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A 2% millionaires’ tax on wealth would also be introduced at a cost of €2.7 billion.

Murphy explained that this would only be applied on the net assets of an individual and would not include their debt.

If someone has €2 million and they have €1 million in debt or a mortgage or whatever, we impose that wealth tax on the excess €1 million and we take 2 per cent of that, which is €20,000.

“We think that’s a reasonable contribution to make in the context of people having lost lone parent’s allowance, child benefit, young people’s dole etcetera.”

We asked Murphy to give his own definition of what a high-earner in Ireland is:

In total, AAA estimates that its revenue raising measures would bring some €16.4 billion and as a result leave Ireland with €3.6 billion more in revenue than expenditure, meaning there would be no borrowing requirement for 2016.

AAA said the purpose of the pre-budget statement was to outline how Budget 2016 “could serve to reverse the inequality that has been worsened in the course of the crisis”.