After three elections in which we couldn’t bring ourselves to elect a government, three elections in which we tried to vote with our feet but found we had nowhere to go, three elections in which we voted for change and got yet more variations on the Fianna Fáil/Fine Gael pas de deux—after all that, maybe it’s time to take Einstein’s advice. Changing how we think is hard; we could start by taking a look at the old, comfortable habits of (not) thinking that got us into this state and maybe clear enough headspace to remember that once we dreamt of something better.
Government by, for, and of the people gains a specific meaning when the people aren’t subjects but citizens in a democratic republic. As such, they aren’t answerable to arbitrary power—a monarch, for instance, or political overreach—and freedom is shared among equal and interdependent citizens supporting and defending the common good in their own self-interest. And at the beating heart of that common good there is a productive tension, a constant negotiation between absolute personal liberty on one side and on the other a structural relationship of democratically agreed rules, regulations, and conventions that allow us to peacefully share the space we occupy. The price of equal, interdependent, and peaceful coexistence is eternal vigilance at the points where those two meet.
By those standards, both as a republic and as a democracy, we’re still a work in progress. And we’ve really been falling down on the eternal vigilance thing.
So, let’s start again. And, speaking of things that never were, let’s ask ourselves why, in the second-richest country in the world, according to the International Monetary Fund (IMF), we don’t we have a first-class, single-tier healthcare system to which we all have equal access? Why don’t we have a first-class single-tier education system to which we all have equal access? Why don’t we have a state building programme that will house everybody who needs housing? And why don’t we have a workable plan to stop choking the planet?
But most pressing of all, why not a tax code that makes the rich pay their share?
Could the answer to all of those questions possibly be because we’re not citizens in a democratic republic but units in an economy that’s run in the best interest of those with the money and the power and the influence? Could it be because the richest ten percent of the population own more of the nation’s wealth than the other ninety percent combined, while the poorest ten percent own less than nothing at all?
And could it be that we’ve gone along with it because we’ve bought into the deluded belief, or bad-faith argument, that those with the money and the power and the influence create wealth that trickles down on the rest of us?
French economist Thomas Piketty exploded the myth of trickle-down economics in 2014 when he pointed out that, contrary to the promises of riches for all, since Ronald Reagan launched the ‘rising tide that would lift all boats’, income growth in the US had halved from 2.2 percent a year to 1.1 percent, and inequalities had doubled. In 1980, then-future President George H. W. Bush, Reagan’s unsuccessful opponent in his run for the Presidency that year, called the promised rising tide ‘voodoo economics’. And he was right—it worked like magic for the usual suspects. In fact, the number of billionaires exploded—growing from about 100 in 1990 to around 600 today.
But the trickle-down part just didn’t happen. Instead, the US has experienced increasing income inequality and chronically slow growth in the living standards of low- and moderate-income Americans. Near stagnation in the hourly wage for the vast majority of American workers over the past generation wasn’t a consequence of abstract economic trends: incomes were suppressed by policies that boosted the trickle-up process by which the very rich got very much richer—rich enough to build their own big-boy rockets and take their friends for a jaunt in space. And to buy a Senate.
In more or less the same time frame, when our millionaire and billionaire class took off over here, the top one percent, who own more than a quarter of the national wealth, massively increased their share of the national income too. Meanwhile, the bottom 90 percent made significant overall losses. The already rich continue to get an awful lot richer while the working poor continue to pay the price in scandalously low pay and inadequate public services. Being a corporate tax haven pushes us up the international rich list but the funny money passes through our taxation regime without touching the ground and without the lower 90 getting a whiff of it. That was the Celtic Tiger.
The first chart, from An Tasc, shows the declining share of the nation’s income going to the bottom 90 percent of us and the rapidly increasing share going to the top one percent since 1975. But where is that increased share coming from? From increased productivity among the top one percent? Hardly. The Wealth Report 2019 from estate agent Knight Frank announced that ‘almost 3,000 Irish people became millionaires last year—and one became a billionaire—on the back of rising asset and property values’ and not from any effort on their part.
More to the point, however, the chart makes it clear that money is trickling up from the rest of us—from the steady transfer upwards of labour’s share of corporate profit to the boardroom and shareholders, from the shift away from direct to indirect ‘consumer pays’ taxes that disproportionately affect lower-income groups, and from the ongoing pauperisation of tax-dependent public services because the rich won’t pay their share. And that’s just for starters. But the rich don’t have to pay their share: they have accountants to make sure they don’t. And they can afford private health insurance, private schools, and private pensions, as well as enjoying free access to our roads and emergency rooms and Garda support and fire fighters and all other public amenities. So why waste money on taxes?
The rumours that those high-rolling days are coming to an end (again) may yet be a little premature, but they do keep on coming:
The free money party is over. This week [May 7, 2022] the penny has really started
to drop. US interest rates rose, stock markets took fright, Government borrowing
costs marched ever higher and the odds on an ECB interest rate increase in July increased
significantly. (Cliff Taylor, The Irish Times)
Premature perhaps, but those of us who were sentient in 2008 can’t help hearing the echoes, made louder and more ominous by Putin’s threat to cut off Russian gas supplies to Europe. We hear repeatedly that this is going to be a tough winter, between the sky-high cost of fuel, possible blackouts, runaway inflation, and the Covid hangover. I can’t say how all of that might affect money markets, or property values, or Ireland’s ranking in the global rich list, but I’m willing to go out on a limb here and predict that even less wealth will be trickling down in the future.
The result of that increasing gap between the share of income taken by the rich and what’s left for everyone else is reflected in the sharp cliff-face of a drop in the second chart—it’s pretty clear where all that wealth is accumulating. In 2016, the top 10 percent owned 58.5 percent of the nation’s wealth—noticeably more than the other 90 percent could manage between us (41.5 percent) and more than twice as much as the bottom 80 percent (27.6 percent). That puts the top one percent (27.3 percent) in a statistical dead heat with the bottom 80 percent.
There were 77,984 millionaires in Ireland in 2019, with another 17,000 on course to join them by 2023 (Knight Frank). We currently have nine billionaires.
Working our way up the scale, David McWilliams pointed out that in 2014, the 100 people on the Irish rich list earned twice as much as the entire growth in Irish GDP:
We’re not talking here about the mythical 1 percent. If it were the 1 percent,
we would be talking about a significant cohort of between 46,000 and
48,000 people. Here we are talking about 100 individuals. This is off the scales.
Or so it must have seemed at the time. But it turns out that the pandemic was a very nice little earner for the already ultra-rich and the scales have had to be recalibrated. Much of the nine trillion US dollars that was poured into global economies in order to keep the world economy afloat has ‘gone into financial markets, and from there into the net worth of the ultra-rich’ according to the definitely not-left-leaning Financial Times: ‘The total wealth of billionaires worldwide rose by $5tn to $13tn in 12 months, the most dramatic surge ever registered on the annual billionaire list compiled by Forbes magazine’.
Our own nine billionaires, according to Inequality Kills from Oxfam, saw their fortunes increase by 58 percent. That ‘healthy’ profit margin was helped, for instance, by the obscene rent they charged us for the use of their hospitals during the first lockdown. Yet another pandemic windfall.
Money doesn’t trickle down. It rises to the top and coagulates there.
Meanwhile, also in 2019, the year in which we had a smidgen short of 78,000 millionaires, nine billionaires, and a handful of people earning more than the country, Living in poverty (Social Justice Ireland) estimated that approximately one full-time worker in five in the Republic earned less than the Living Wage. That is, in the second richest country in the world, 20 percent of our full-time labour force earned less than what it would cost to achieve an acceptable standard of living in Ireland. That’s what I call an income gap.
The same study found that in 2019 one child in five lived in a family with an income below the poverty line. One child in four that year suffered deprivation of two or more basic necessities: this can mean going 24 hours without a substantial meal or not having two strong pairs of shoes, or a warm coat to keep out the Irish weather. It can mean having no heat or light in the home because parents can’t afford to pay the bills—the chances of which have risen dramatically as we face into that tough winter. That’s an ugly statistic for most of us, but already literally cold and dark reality for poor children in the second richest country in the world.
Also in that year, around 10,000 homeless people, one in three of them children, were deprived of their dignity and their humanity while being shunted around b&bs and hotel rooms with no transition to settled housing in sight. Making their chance of getting housed even more distant, there are upwards of 60,000 households already on the waiting list ahead of them—some of whom had been waiting for more than a decade. More on this in ‘Mind the housing gap’.
In that last pre-Covid year, the number of people on healthcare waiting lists had reached in or around a million—from a total population in the Republic of 4.88 million (5.01 million as of 2022 census)—with more and more waiting longer and longer to see a consultant who will put them on a list for treatment.
The money spent on healthcare in Ireland is close to the European average—slightly more than Finland, and not that much less than Denmark and Sweden—but those countries get an awful lot more bang for their buck. There’s a good reason our money appears to buy so much less: one third of what we pay from the public purse is channelled through the private healthcare sector, in part through payment for treatments that we might be able to afford if we weren’t spending so much ‘buying’ them from private hospitals with what amounts to a Government subsidy to private health care. Our money consequently subsidises a system in which higher-income earners with health insurance—including TDs and Senators—can skip waiting lists, improve their recovery rates and times, and take increasing advantage of preventative medicine. Those of us who can’t afford or refuse on principle to take out private healthcare insurance are nevertheless forced to subsidise those who can afford it.
Also 2019, the year of the last pe-Covid Leaving Cert, Carl O’Brien reported that students from fee-charging schools were still ‘keeping a strong grip on the most sought-after third-level courses, despite millions being spent narrowing the class gap in education’ (my emphasis). Why is that? What happened to those millions? Was it all squandered on forming hopscotch clubs that nobody joined? Are the lower classes ineducable? (Spoiler alert: we aren’t.)
It should not be true that whether an Irish student will graduate to university or not can be predicted with up to 90 percent accuracy while knowing nothing about them but their eircode. Nevertheless, it is.
In Dublin, for instance,
Most schools in better-off parts of the city . . . have progression rates of 90 per cent
or more to third level. In many of these schools, the proportion of students
going to either Trinity or UCD is as high as between 75 and 80 per cent.
By contrast, individual schools in more deprived parts of the capital . . .
have third-level progression rates of about 20-25 per cent, with
some as low as 7 per cent. (Carl O’Brien)
Unequal progression rates, one assumes, is precisely the area in which improvements were sought by those millions, so what went wrong? We found out (due entirely to the unusual circumstances under which the Leaving Cert exam was offered during the pandemic) that nothing had gone wrong: everything had gone according to plan. Those millions hadn’t bought us greater progression to universities from previously disadvantaged schools because another arm of the Government routinely cheats to maintain the old socioeconomic status quo. They achieve that by adjusting Leaving Cert results after marking to conform to ‘historic’ grades. Earned grades for students from fee-charging schools and those from the ‘better-off parts’ are boosted to conform with ‘their’ history, while students from disadvantaged schools in disadvantaged areas are further disadvantaged by a reduction in their earned grades to keep them in ‘their’ place. Let me repeat, because I’m finding this hard to believe as well: the reduction in their earned grades cancels out the effect of those millions spent on closing the gap they were meant to narrow or eradicate.
That is quid pro status quo.
The consequence has been that no matter how well they have performed at school and on the Leaving Cert, graduates from the ‘wrong’ schools can never be awarded the perfect grades required (625 points after boosting) to allow them to sneak into those top courses, because their grades will always have been reduced.
Meanwhile, the boosted grades of graduates from the ‘right’ schools increase their chances of joining their peers in the professions. And because that cohort is over-represented in those top-courses, they will disproportionately fill those various professions, take up a disproportionate number of places on corporate boards and government-appointed quangos, and provide a disproportionate number of Dáil members and government ministers. In short, those students to whose education costs we less fortunate taxpayers contribute, will be over-represented among the leaders and power brokers of the future, because of that simple, unfailing cheat.
That cheat has a name, school profiling, and Aodhán Ó Ríordáin has been a vocal opponent, pointing out that
The Government and the Department of Education have long upheld their position
that publishing school profiling or their own league tables is unfair, that is why they
don’t allow Freedom of Information requests into their own internal school
profiling system. (Aodhan O’Riordain, labour.ie/news)
The process of manipulating Leaving Cert grades to maintain the socioeconomic status quo—at a heavy cost to working class students—is protected from public knowledge and cannot be penetrated by Freedom of Information requests. What could possibly be wrong with that?
It’s almost as if the ‘unfairness’ they are protecting is that the practice has been knowingly and specifically designed to keep the ‘wrong’ people out of those top courses. And that is why, in Ireland, I’ve never met a doctor with a Tallaght accent.
Clearly, we were never meant to know how that ‘quid pro status quo’ arrangement worked. Fortunately, Professor Damian Murchan has explained how they do it in Standardisation of grades happens each year but usually far from the spotlight. It’s possible this publication wasn’t a popular move in some circles, because even though the article works hard, unsuccessfully, to justify school profiling, it has been deleted from the Trinity website. It’s still available, however, at independent.ie. There will be more about Professor Murchan’s calculations later, in ‘Mind the Education Gap’.
This year’s Leaving Certificate grades will be ‘at least as high as last year’s record-breaking set of results’ according to a commitment from Minister for Education Norma Foley to that effect. In order to achieve this the State Examinations Commission (SEC) will apply a ‘postmarking intervention’, that will lift all students’ marks, if necessary. Students’ marks will not be lowered if they are above last year’s high-grade profile’.
My mind is boggled. Why not let the earned grades stand as they are without any manipulation? The top ten percent, say, achieve the H1, the next ten percent the H2 and so on. Those grades may or may not match last year’s or any other year’s grades, but the people who performed best on that exam, in that year, under those conditions will receive the top grade—even if they come from the ‘wrong’ eircode and have the ‘wrong’ accent; ability will be the only measure applied and the result will be that the most able will qualify. Isn’t that the optimum outcome?
Is this what it feels like to live in the IMF’s second richest country in the world (gfmag.com/global-data)? To answer my own question: no, this isn’t what it feels like to live in the second richest country in the world. This is what it feels like to live in the country (also us) in which the average household net-adjusted disposable income is lower than the OECD average (OECD Better Life Index).
The state we are in from An Tasc drills down into those statistics. Inequality fell markedly from the 1940s to the late 1970s and reached its most equal level in 1975. Since the 1980s, however, when we discovered that greed is good, the income share going to the top ten percent, and even more so to the top one percent, has been increasing steadily.
The report goes further, pointing out that the poorest in Ireland are not unusually poor when compared with our more equal European neighbours—though they are living below the poverty line if they depend entirely on State benefits. ‘Groups above the bottom ten percent’, however—the working poor—get a smaller share of the national cake when compared to those same neighbours. It goes on to suggest that this could be the good news: the greater differential between what we pay our workers and what the one percent grab for themselves creates significant scope for redistribution.
That’s Irish politics in a nutshell: there’s always room for improvement but no political will to do anything about it.
Consequently, between 1975 and 2018, the top one percent doubled their share of national income from six to twelve percent (see the An Tasc chart above) while the unfortunate top ten percent between them gained ‘only’ nine points (from 29 percent to almost 38 percent). With the share of income that accrues to the middle remarkably stable, the rapid increase in inequality since the 1980s is thus overwhelmingly driven by gains made by that top one percent and losses made by the bottom 40 percent. The working poor are making middle-class lifestyles possible—but not for themselves. And the top one percent are pulling in the profit.
Going forward, the ‘key economic question is whether we will adopt policies that enable everyone to participate in a shared prosperity, or whether the growth of income and wealth will continue to accrue excessively and disproportionately to the best-off one percent’ (Mishel, Gould, and Bivens).
The answer to that question from either of the two grand ole parties would of course be not to fix what isn’t broken (the view from the top). But what if we managed to elect a government that could see the cost of those broken bits to the working poor—and the ongoing and increasing cost of not fixing them? What if we elected a government that cared enough to want to fix them? What if we elected a government that could muster the political will to put tax revenue where it will do the most good for the most people—that is, where the system is broken, at the bottom of the income pyramid?
Increasing the minimum wage to the living wage needs no supporting argument. The concept of full-time work paying anything less than an adequate income to enable individuals to afford an acceptable standard of living has no place in a democratic republic. Following that, we can use the tax code to do the actual redistribution by also increasing the personal tax credit to the level of the new minimum living wage—it seems unreasonable to deduct tax from earnings that just meet the cost of living. And rather than leaving small local enterprises to carry the burden of that increase in the pay packets of the working poor, a special tax credit to the employers who create jobs would cover the cost of the pay increase and encourage more job creation, putting more money into circulation, and so on and so on and so on.
The total cost can be recouped by increasing the tax on earnings over, say €100,000—knowing that it will be trickling back up—and aggressively auditing high earners’ tax returns. Because, as Cliff Taylor points out,
Just 10 taxpayers . . . were responsible for 85 percent of the €473 million income
tax bill owed in total, meaning that many of the rest paid relatively little. Some
declared little income for tax here, presumably due to tax residency elsewhere,
while others successfully used a range of credits and reliefs to shelter income from tax.
The greater part of any increase in disposable income made available to the lower paid would, in all likelihood, be spent in the local economy. It would support local shops and services, restaurants and pubs, and small local enterprises—carpenters, electricians, and hairdressers—as well as local branches of national or multinational supermarkets, banks, and cinema chains. Increased spending at the bottom keeps money in circulation longer, increasing business activity, supporting and creating jobs, and lifting the general economy as it rises to the top again, as it invariably will.
Using the internal revenue code to make rich people richer, on the other hand, lifts the economy for the rich and sucks money out of general circulation. Increased disposable income going to the richest of us is unlikely to affect their spending habits; tax savings for the rich are far more likely to disappear into an investment fund or other safe place, where they will suck even more money out of circulation in the form of interest.
That’s my trickle-up theory: increased economic activity at the bottom of the pyramid is the engine that will lift all sectors.
Not everybody agrees with me.
Before he left office in 2017, Michael Noonan kicked off a favourite sport of his, the never-ending debate over tax cuts vs increased spending.
At a time when much public debate was focussed on the need to
improve public services in areas such as health and boost key investment
in housing, [Noonan said] ‘It is important that in the discourse of the appropriate
amount of tax and spend in our economy, the views of those who contribute the
majority of the taxation are heard’ (Cliff Taylor).
Who are these people who ‘contribute the majority of the taxation’? Isn’t that just ‘us’? Are Noonan’s ‘majority contributors’ in any way related to the ‘people who get up early in the morning’? Because, despite Leo Varadkar’s insistence that he was being inclusive when he coined that phrase, it was, as Noonan’s was, a dog-whistle to the ‘respectable’ middle and professional classes, who are apparently wearied by the burden of carrying the rest of us.
Let’s get this straight. Everybody in Ireland pays taxes—either directly or indirectly— including the unemployed and the homeless. The Thatcherite shift toward regressive indirect taxation (bin charges, property taxes, water charges) as fixed payments represent a greater burden on lower income groups, while effectively minimising the tax paid by higher earners. In addition, indirect taxes increase prices—shops and commercial enterprises pay those taxes too and pass them on to their customers. This double bubble means that the reduced disposable income at the lower end of the economic scale has even less spending power.
To add insult to injury, we taxpayers, direct and indirect—including the unemployed, the homeless, and the uninsured—from our place on the waiting list for treatment or from a trolley in a hospital corridor, get to subsidise private healthcare. We subsidise private schools by about €92 million a year. We give tax breaks to landlords—who collect the outrageous and unjustifiable rents supported by Government policy—but not to the tenants who have to pay them. In addition, rather than spend money on building public housing, our Government ‘fulfils’ its responsibility by shovelling our hard-earned cash into the Housing Assistance Programme (HAP) which incentivises landlords to rent out their properties by putting our money directly into their pockets.
This is a gift for the usual suspects that just keeps on giving. The vultures swoop in as soon as they find out that renters in Ireland pay, on average, 40.19 percent of their income on rent according to a study by Imovirtual, an online international rental service. That’s the highest percentage in the world; for comparison purposes, the percentage of income spent on rent in the UK is 28 percent, and in the USA it’s 29 percent
It should come as no surprise to anyone that, as Jennifer Bray and Cormac McQuinn reported today (Aug 24, 2022), 48 TDs (30 per cent of the 33rd Dáil (up from 25 per cent in the 32nd Dáil) and 29 per cent of the Senate own rental properties or land ‘with some politicians holding substantial property portfolios’.
What Bray and McQuinn called ‘the fall of Troy’ prompted the article. It all started ‘with a story about a house sold in 2018 by [TD and Minister of State Robert] Troy, but which was never mentioned on his declaration of interests’. He apologised for the ‘mistake’ and promised never to do it again. But it turns out that ‘the same thing had happened in 2019, and also that he had failed to declare a company directorship in 2021’. When Taoiseach Micheál Martin ordered him to tell all in the interests of transparency, I suspect he got more than he thought he was asking for. Troy’s declaration included:
The sale of the properties in 2018 and 2019; another property in Mullingar which
had been omitted in 2020; information that his former private dwelling at
Main Street in Ballynacargy in Co Westmeath had been rented out since November 2021;
the sale of a garden at 25a Rathdown Road in Phibsborough, Dublin 7 as well as
new information about two Rental Accommodation Scheme (RAS) contracts
he had with Westmeath County Council.
And it didn’t end there. Almost immediately after that exercise in faux transparency, he revealed, during a radio interview, that ‘he owns or co-owns 11 properties, nine of which are rented out, and that he has five Housing Assistance Payment (HAP) contracts’. He finally resigned his Cabinet post the next day. He is still a TD.
The most troubling thing about the story is that, after Troy had been caught being economic with the truth for the first, second, and third times, Bray and McQuinn reported ‘a certain sense within Government that there was nothing worth panicking about just yet’. It still seemed manageable when it was just the cheating and the serial lying. It was the public outcry that bought about the Taoiseach’s demand for transparency; the only principle in Irish politics is polling well.
We urgently need robust conflict of interest legislation. I can’t believe I need to type this: landlords should not write landlord and tenant laws any more than paedophiles should write child safety laws.
It goes without saying that any Dáil members with conflicts of interest should recuse themselves from debates on that conflicted issue. Failure to do so should carry a penalty that will make it unattractive not to do so again. Failure to declare an interest should carry a heavier penalty.
That would all be lovely, of course. But I have no faith that even our current gang of parliamentary turkeys will be voting for Christmas any time soon.
Paying the bills
Realistically, if we are to build a country with first-class health, housing, and education services producing healthier, better educated, more motivated, and more productive workforce drawn from every socio-economic group, then we need to collect more taxes. Right-wing governments, and we’ve never had any other sort, are predictably reluctant to impose a wealth tax on their friends. Or those they would like to have as friends. But when it comes to asking the people where we should get the needed extra funds, the majority of us are in agreement: from the rich. Let’s tax them.
Right-wing governments, and we’ve never had any other sort, are predictably reluctant to impose a wealth tax on their friends, but the idea of a third tax rate or a wealth tax is popular with a sizeable majority of voting and tax-paying people. Taxback.com asked 1,700 taxpayers throughout the State for their views on taxing wealth. The survey showed that a ‘landslide’ 65 per cent agreed a new tax on accumulated wealth should be imposed. Alternatively, 61 per cent of respondents agreed that a new higher third rate of income tax should be introduced to gather additional taxes from those on larger incomes. And strong majorities favour taxing land (69 per cent), property (57 per cent) and shares (56 per cent) (Cliff Taylor).
Why pick on the rich? Because, as Taylor points out, some of the wealthiest people in Ireland pay income tax at a lower rate than the average taxpayer. One in four high-net-worth individuals declare taxable income of less than the average industrial wage.
So, let’s tax the rich. Because, if they continue to underpay their taxes, the rest of us will once again get saddled with paying for the loans we’ll need to stabilise our economy following the pandemic and Russia’s war in Ukraine. Before that illegal war was even imaginable, and during what we didn’t know were only the early days of Covid-19, Paschal Donohoe had thrown out €20 billion as a guestimate of how much debt the lower-paid will be expected to take on following Covid. It will undoubtedly be a lot more when the final bills come in. And despite the ‘good’ news that corporation tax returns have been higher than expected—which is good news only if we forget how easily that can change—runaway inflation could still leave the majority of us up an unfortunately too familiar creek with no paddle.
So, let’s tax the rich. I’m not suggesting that we take away their paddles, but that the rest of us get one too.
And while we’re on the subject, it’s time to repatriate the taxes of the bogus non-resident non-tax-paying billionaires who pay for nothing and walk away with everything.
There is much talk of extending the right to vote in Irish elections to citizens living abroad and I’m all in favour—but, to paraphrase an earlier revolution, there should be no representation without taxation. Fun fact: all US citizens, no matter where in the world they are resident, make a US tax return every year. For those who live in another country there are deductions for tax they have paid where they live and any extra expenses incurred by living there, and so on. Anyone who doesn’t want to pay US taxes can surrender their citizenship.
If we adopted a similar model here—the vast majority of taxpayers living abroad would be assessed as not owing anything, or as owing very little, in Irish taxes because Irish average effective tax rates are among the lowest in the OECD (oecd.org here). For the billionaires, of course, it would be a different story. So, pay your taxes or surrender your vote. No representation without tax liability.
David McWilliams describes accumulated wealth as the low hanging taxable fruit because it’s ‘tied up in property and land and can’t—by definition—leave the country’. You can’t move your refurbished castle offshore. And, following a long-running bull market in stocks, bonds, and real estate underpinned by low interest rates, ‘people who depend on assets for their income have been profoundly enriched over the past three decades. In contrast,people who depend on wages for their income, the vast majority, have struggled’.
So, let’s tax the rich.
Imagine we decided to introduce a sliding wealth tax of between 0.5% and 5%
on wealth, on the top 1% or top 5%. Even using the more modest HFCS numbers,
the State could raise close to a maximum of €20 billion (5% on the top 5%) or
a minimum of €2 billion (0.5% on the top 1% ) (Wealth tax for Irish ultra-rich makes sense).
Let’s imagine we actually collected that top figure, five percent on the top five percent. €20 billion would build enough houses or apartments to house all the homeless, clear the housing lists, radically reduce the numbers of people depending on the private rental sector and thus slash Government expenditure on HAP. And it would leave us with a surplus to take care of future demand.
Or that €20 billion could pay for the complete implementation of Sláintecare in one go—even at the dramatically higher level suggested by the Irish Hospital Consultants Association (IHCA):
The cost of implementing the proposals in the Sláintecare Report has been
understated and will actually cost the taxpayer €20bn if implemented over
10 years, compared with €2.8bn stated in the Report. (healthmanager.ie)
Sláintecare, or if necessary, an updated iteration of Sláintecare, is on a waiting list for Government attention. More on this in ‘Mind the healthcare gap’.
Or it might allow us to mend our unfairly rigged education system. See ‘Mind the education gap’.
Even at the bottom end of McWilliams’ scale (half a percentage point on the top one percent) €2 billion would build 10,000 plus houses. Or replace a currently unquantifiable number of leaking water pipes. Or retrofit an unknown number of existing houses to passive levels. Or replace the current bus fleet (by then, hopefully, renationalised) with all-electric buses. Or any combination of some, all, or none of the above.
Somewhere between those two options—a maximum of €20 billion or a minimum of €2 billion—lies the immediate cost of fixing our post-coronavirus and (hopefully) post-war economy while reducing if not eliminating any borrowing we’ll have to do.
Sounds fair enough to me.
A Commoners Co-op
The best time to rebalance the social economy was about 40 years ago, when the Celtic Tiger was a cub. The second-best time is now. It is inarguably time to elect a government that will work to reverse the trend by which the top one percent are enriching themselves at the expense of the working poor. It is equally inarguable that there is no single party that could deliver that result. And things can only get worse as the spoils of society continue to accrue almost exclusively to the very rich. Meaningful change can only be achieved by cooperative action among progressive politicians from all points on the spectrum.
Here’s a revolutionary thought: why don’t the Irish left put a temporary halt on slagging each other off and come together on a fixed programme of government for a single term only? This will obviously not be a coalition, where smaller parties go to die, but an alliance or cooperative—a Commoners Co-op, let’s say—made up of people from all parties or none voting as a bloc with a fixed programme of government composed entirely of shared non-negotiable red lines.
They might include:
- Nationalising the hospitals and implementing a universal health service so that we all have equal access to healthcare.
- Building houses so that we all have equal access to a home.
- Nationalising and properly resourcing schools, colleges, and universities so that we all have equal access to education.
- Implementing an urgent programme to pay our climate debt so that we can all enjoy a habitable planet into the future. And so that we all have equal access to clean air and water now.
- Introducing a wealth tax or a third income tax band, because revolutionary change doesn’t come cheap.
Those red lines have to be non-negotiable for everybody and outside of them, participants and participant parties will have to agree to differ.
And after they’ve put in place a universal health service, nationalised the schools, built the houses, and implemented real measures to wipe out our carbon debt—all paid for by wealth taxes—the co-op would dissolve itself with everybody going their separate ways. Then they can all go back to slagging each other off in the endless struggle for ideological purity.
But on the way, they’d have evened the playing field for everybody. We can only dream.
 Seriously. I went back a second time to check that it didn’t say Iceland. We’re richer than the US (5th), Norway (4th), and Switzerland (3rd), with only Luxembourg ahead of us (gfmag.com/global-data). Ireland is a small country with a few very rich people at the top, but in which the poor pay a higher price for the national success than their more equal European neighbours.
The IMF calculates its ‘rich list’ by dividing GNP (the national collective pay packet) by the population size. Other organisations use different methods.
 Thomas Piketty. Capital in the Twenty-First Century. Cambridge, Mass: Belknap Press of Harvard University Press, 2014.
 A bin charge of, say, €500 annually would be 5 per cent of €10,000 per year, 3.9 per cent of the state pension (€12911.60) but 0.5 percent of €100,000 per year. The higher your income, the lower your tax rate.
 In New York, however, I worked with a young man from Tallaght who had recently graduated from Columbia University, where he had had a scholarship. (Current fees at Columbia are almost $60,000 per year). On graduation (with ‘highest honours’) he won a Mellon Fellowship, which put him in the top two per cent of graduates from US universities that year. That Fellowship would pay his graduate school fees, with a monthly stipend. He is now a doctor. He still has a Tallaght accent.