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300 in new taxes Hot on the heels of a levy on second homes, which was unveiled in last October's budget, the Government is now apparently contemplating a 1,000 annual tax on all homes. Amidst the acres of coverage of this week's talks about possible public spending cuts between Government, trade unions and employers, the key point went largely unnoticed. This was that, with the gap between public spending and taxation now having widened to close to 20bn per year, the 2bn of public spending cuts being discussed this week were virtually irrelevant. It was what wasn't said this week that was really important. Although nobody said so explicitly, it should be as clear as daylight that the Government is now determined to plug the gap in the public finances largely through taxation rather than through spending cuts. Private-sector workers are going to pay dearly for this. Someone on 50,000 per year has already seen their income savaged. They are now paying a 1pc levy on their income, an extra 500 per year. Depending on how much they spend and what they spend it on, the 0.5pc VAT hike is probably costing them about 100. And then there's higher petrol, wine and cigarette duties, higher road tax and the 160 per person health insurance levy. Add it all up and that's at least another 500 per year. This means that when the full ramifications of last October's budget work themselves through, someone on 50,000 a year will be almost 1,000 -- 20 per week -- worse off. And that's just the opening instalment. There are currently about two million people working in the Irish economy. Relying exclusively on higher taxes to plug the gap between public expenditure and tax revenue would cost each of these workers a massive 10,000 a year in extra taxes. Justifying this switch to higher taxation, for which it never sought an electoral mandate, the Government speaks of "fairer" taxation. While most of us accept the notion that those on higher incomes should pay a greater share of the necessary income, the reality will almost certainly be very different. What will actually happen is that people on relatively modest incomes will once again find themselves paying income tax rates of more than 50pc and perhaps even more than 60pc. A doubling of the income levy and an increase in the top rate of tax would cost an unmarried private-sector worker about an extra 2,200 per year. Throw in the proposed property tax and that rises to 3,300. At the same time, many private sector workers are seeing their wages either frozen or cut. When this is combined with last October's tax increases, that would bring the total to 4,300, a massive 80 per week in extra taxes. But the Government would still have to keep coming back for more. Sooner or later, public opinion would snap and taxpayers would say "enough". In each of the past three general elections Irish voters voted in favour of tax-cutting policies. Now the Government, elected on a low-tax platform, has switched to a high-tax policy. This volte face strips the Government of democratic legitimacy. Given what happened last October, when pensioners protested to protect their medical cards, it isn't fanciful to imagine tens or possibly hundreds of thousands of hard-pressed private sector workers taking to the streets to protest at having to pay the price for the Government's lack of bottle. By failing to stand up to the public sector trade unions and imposing meaningful public spending cuts, the Government risks provoking the rest of us beyond endurance, with potentially devastating consequences.

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