The Egalitarian Niall Crowley, equality consultant and former CEO of the Equality Authority, commissioned some alternative voices economically, socially and environmentally We are constantly told there are no alternatives. The markets allow for no flexibility, they say. The Troika demand this, they tell us. Closing down the debate inspires a hopelessness and yet it suits the dominant and doomed economic project to get us back to where we were and to protect those interests that, supposedly, retain the capacity to get us there. It stifles public debate and locks all commentators into ways of thinking that narrow the range of solutions being considered. We need alternatives now more than ever before if we are to imagine a different and better future. The current situation in Ireland “requires a refounding of the the institutions and culture of the Irish State, and a new development project for the country”, according to Kirby and Murphy in their book ‘Towards a Second Republic’ (Pluto Ireland, 2011). They bemoan the constraints to our social imagination. They quote Colin Hay writing about the situation in Britain: “that new economic paradigms are difficult to summon up, especially when you need them most”. Those who are working on alternatives – alternative policies, strategies and even models for society and the economy do not get the public space they need. The Economist Sinéad Pentony, Head of Policy with TASC, writes that tax determines society Taxes provide the revenue that we need to educate our children, care for those who are ill, keep our communities safe and support those who are out of work or in retirement. Ireland is an advanced economy, with western European standards of social and economic development. If we wish to maintain and enhance these standards, our levels of taxation will also need to be comparable to those of our most advanced European neighbours. In 2009, Ireland’s overall tax-to-GDP ratio was the third lowest in the European Union at 28 per cent, and the second lowest in the Eurozone. This is compared to an EU average of 38 per cent. The difference between Ireland and our European neighbours is primarily attributable to Ireland’s relatively low level of (employer and employee) social-security contributions, more commonly known as PRSI, and the relatively low levels of local-government taxation. The tax base was eroded over the last two decades by a policy of cutting taxes when they should have been increased, and through the proliferation of tax breaks that undermined the tax base and fuelled the property boom. We need a lot of painful adjustments to make up for the mistakes of the past. TASC has been making the case for rebuilding the tax system in a way that creates the conditions for greater equality and sustainable and job-rich growth. Government income and Government expenditure are out of line. The Government, in its first budget, has maintained the budgetary parameters set by the previous administration, prioritising spending cuts over tax increases. TASC has proposed a different package of measures to reduce the deficit by focusing on revenue-raising measures that will minimise the impact on employment, economic growth and low-income groups. Taxation measures that promote equality and sustainable growth must target high-income groups, property assets, unproductive activity and passive income (e.g. rent), as well as protecting the environment. For example, this would mean that the Universal Social Charge is levied on all income from inheritances, gifts and capital gains in the same way that it is currently levied on labour income. The thresholds determining liability to Capital Gains and Acquisitions taxes would be reduced. While the last Budget made some progress in this regard, it did not go far enough. Tax reliefs are generally regressive since they disproportionately benefit higher earners and property-owners. The curtailment of pension-tax reliefs and reliefs relating to rental income would increase the tax take while minimising the impact on low-income families. The domicile levy has failed to ensure that wealthy Irish people who are non-resident for tax purposes pay their fair share. There is clearly a need for a radical rethink of how these wealthy elites should be taxed. Other countries have successfully taxed their wealthy citizens through taxation based on citizenship or taxation of global assets. The question is: do we have the political will to put in place equitable taxation measures for our wealthy citizens? Ireland has very low levels of local taxation compared to other European countries. TASC supports equality-proofed residential-property tax and water charges, as these measures represent an opportunity to sustainably fund reformed local services that are more accountable and responsive to local needs. Unfortunately, the flat-rate household charge is highly regressive because people on lower incomes pay proportionately far more of their income than those on higher incomes. While there is a lack of clarity regarding how water charges will be implemented, the indications are that they will not be taking household size or circumstances into consideration, so registerig a disproportionate impact on low-income households and larger families. Ireland also has very low levels of social-security contributions. We should be planning for gradual increases in employer and employee PRSI, combined with general taxation, to provide free-universal healthcare and earnings-related pensions. Minimising the impact of tax increases on low-income groups not only promotes equality and allows people to live in dignity, it also protects spending in the economy, which is crucial for economic recovery. TASC’s taxation proposals outline in a credible way a realistic set of measures to move us away from an under-resourced, unsustainable and unfair tax system and towards a modern progressive European tax system. The Sociologist Mary Murphy, lecturer in Irish Politics and Society in NUI Maynooth and one of the organisers of Claiming our Future, writes that without a struggle of ideas there can be no political struggle. In ‘Shock Doctrine’ Naomi Klein chillingly describes the Right as always ready, waiting for moments of crisis, to move in and apply its prescriptive ideas. While the Left also expects opportunity in crisis, progressives have been found
