JUST how interested the government parties are in achieving the fairer society they claim they want is probably best illustrated by the fact that it was an outside agency, rather than any of them, that went to the trouble of crunching the numbers. The bad news that Social Justice Ireland came up with for the Irish government is that it needs to raise up to €3bn in additional tax revenue per year to fund a fair, equal and progressive future for Ireland.
This information is contained in an interesting new book published this month, called Social Justice Matters: 2018 guide to a fairer society. Over the course of 300 pages, the book goes into forensic detail about our tax system and how the revenue is spent here, comparing it with the European average, to support its argument that Ireland needs more tax revenue, not less.
It states the obvious that ‘tax is a dirty word in Ireland.’ Time was when so many were doing their utmost to earn a few bob on the side that the taxman would not find out about, especially back in the grim days of the early ’80s when people on PAYE were paying 65p in the punt and the interest rate on mortgages was 16%.
Nowadays – quite rightly – it’s a lot more difficult to operate in the black economy and get away with tax evasion. Still, some of the richest entities in the world can now legally use our tax system to get away with paying much lower tax bills.
On the domestic front, according to Social Justice Matters, ‘raising taxes or creating new taxes is politically toxic, even if it is to fund vital and ageing public infrastructure; while cutting taxes is a popular political tool, often used in the run-up to elections and nearly always regressive in nature.’ The book cogently argues that Ireland needs to increase and broaden its tax base if it wants to fund a fairer society, but one wonders where the political will for this will come from.
The annual figure of €3bn extra it says is needed to fund decent public services, upgrade ageing national infrastructure and to ensure Ireland becomes a fairer and more equal society in the future, it suggests, could be raised from measures such as a minimum effective corporate tax rate of 10%, a financial transactions tax, eco-taxes, and increasing the minimum effective tax rates on high earners – to name a few. A broader tax base would keep exchequer funds safe through uncertain economic times and ensure things such as a continuous supply of social housing in order to avoid scenarios like the housing and homelessness crisis we now have as a result of the dropping of the building of such houses by the previous government during the economic downturn.
As Fr Seán Healy, the CEO of Social Justice Ireland and an unapologetic thorn in the side of successive governments, correctly pointed out: ‘We are a low revenue economy, yet we are one of the richest countries in the world. It should be a priority to find those additional resources, not to squander the resources we have.’
The development of what he would describe as a fairer tax system is the main plank for broadening it and increasing the overall tax take. To achieve this, the government needs to ‘poverty-proof all budget tax packages to ensure that tax changes do not further widen the gap between those with low income and the better-off.’
This book certainly lays down the gauntlet to citizens, opinion formers and policymakers to imagine how a fairer society can be achieved. Politicians in particular who bleat about creating a fairer and more just society would be well advised, not just to note its contents, but to start working towards implementing its recommendations.