23 September 1999 Edition
Sharing the wealth
BY ROBBIE MacGABHANN
There are 93 days left to Christmas, but even less to the third budget from the Fianna Fáil/Progressive Democrat government. Once again, the focus of the budget is on tax cuts. This week, Fine Gael entered the pre-budget propaganda war with their own promise of a £2 billion tax giveaway.
The Fine Gael tax proposals included extending the standard rate tax band and creating a new 35 per cent tax rate for middle-income tax earners. On the same day as the public were considering the Fine Gael proposals, a new group called Share the Wealth, offered a more viable strategy for framing budget policy.
Share the Wealth is looking for a ``fairer distribution of the country's current economic success''. Its campaign is being organised by the National Anti-Poverty Networks. The networks include the Irish Traveller Movement, Irish Rural Link, the Irish National Organisation of the Unemployed, the Community Workers Co-operative, the Forum of People with Disabilities and the One Parent Exchange and Network.
The Share the Wealth proposals include a ``massive once off strategic investment package to compensate communities who have been excluded from the Celtic Tiger boom''.
Current spending in the budget must ``demonstrate a real commitment to eradicating poverty and social exclusion''. The campaign also wants adequate resources for public institutions so that the National Anti Poverty Strategy is properly implemented.
The final part of the Share The Wealth campaign involves the taxation strategy implemented in the budget. This is where the Fine Gael proposals come into sharper focus.
Share the Wealth proposes that the ``budget must direct tax cuts towards the lower paid and ensure that the tax take is sufficient to guarantee decent public services''.
Fine Gael want to extend the 24 per cent tax band, taking 160,000 workers out of the higher 46 per cent tax band. Under their proposals, no person earning less than £17,500 would pay tax at the top rate.
A second part of the Fine Gael proposals is the promise of a new 35 per cent tax rate for income earners who earn between £17,500 and £50,000. They also propose increasing the personal tax free allowances so that anyone earning £170 or less a week would pay no income tax.
The Fine Gael proposals include a little something for the lowest paid and some serious tax cuts for the middle income earners. They do not, though, take the necessary steps towards tax equality that are so badly needed in the 26 Counties.
For the past three years, research from the ESRI, Combat Poverty and the Conference of Religious in Ireland (CORI) have all come to the same conclusion - that tax cuts must be aimed exclusively at the lower paid.
This way, everybody benefits by the same amount in money terms but the low paid have the highest proportionate change.
The Fine Gael proposal's will actually amplify tax inequalities. Low income earners pay tax but get little of the tax reliefs open to higher earners. If they are in public or rented housing they get no mortgage relief. They are unlikely to be able to afford VHI cover and get no tax relief for this. Finally, they are unlikely to be in a private pension scheme and again will not get the tax relief higher income earners enjoy.
The current tax code creates inequity because it allows middle and high income tax earners to amass wealth and property. This is great for them but at the same time low income earners are put in a position where they will never be able to amass any savings, wealth or property.
There is then a very compelling argument to be made for diverting all the funds available for tax cuts to the low paid. This though, is an unlikely outcome for Budget 2000.
The parties are more than likely to spend the coming weeks offering different scenarios for slicing up the exchequer surplus millions. These proposals will all have one common theme - how to put more money in the pockets of the middle and high income earners with a sop to the low paid. This makes the Share the Wealth Campaign all the more important.
The Share the Wealth campaign is organising regional launches on 4 October in Kerry, Clare, Leitrim, Offaly and Galway. There will be a national rally on 20 October beginning at 11am at Custom House Quay, Dublin.
Partnership meaningless for workers
A poll conducted by the Amalgamated Transport and General Workers Union (ATGWU) has found that more than 75 per cent of trade union members believed that the Partnership 2000 agreement had no impact in improving the partnership in the workplace.
Nearly 40 per cent of workers believed that there was less co-operation between management and workers over the last two years. Profit sharing has been enjoyed by only 23 per cent of workers, while just over one third of workers surveyed had access to company share options.
Another worrying finding in the survey was that 71 per cent of workers said that there had been no increase in the amount of financial information provided by companies to their workers.
This is especially worrying in the light of EU directives requiring many larger companies to set up works councils where such information would be disseminated to and discussed by the workforce.
This autumn the trade union movement, the Dublin government and the employers organisations are beginning yet another round of new partnership agreement negotiations. Will those in the ICTU and SIPTU who are so much in flavour of so-called social partnership wake up to its increasingly obvious flaws?
Rugby tax haven
Next month's rugby world cup is set to earn the game's International Board £50 million. The profits will come from selling television rights and from merchandising schemes.
The International Board will also avoid tax because of the fact that they moved their headquarters to Dublin's Stephen's Green. Two companies, Rugby World Cup Ltd and International Board Trust Ltd, have been formed here. All approved sports bodies in Ireland are tax exempt. In Britain, where most of the world cup will be held, corporate tax must be paid the same as any other business. Most other states levy taxes on their sporting bodies, except South Africa.
The Finance Director of the International Board, Robert Brophy, has denied that the move was for tax purposes. It is only because ``Ireland is one of the foremost rugby playing nations''.
The last time Ireland was a foremost rugby nation, self-made tax haven Charlie Haughey was still in power and thousands of other Irish citizens were developing their own tax havens in bogus offshore bank accounts. I bet none of them ever considered declaring themselves a sporting entity.
There are 93 days left to Christmas, but even less to the third budget from the Fianna Fáil/Progressive Democrat government. Once again, the focus of the budget is on tax cuts. This week, Fine Gael entered the pre-budget propaganda war with their own promise of a £2 billion tax giveaway.
The Fine Gael tax proposals included extending the standard rate tax band and creating a new 35 per cent tax rate for middle-income tax earners. On the same day as the public were considering the Fine Gael proposals, a new group called Share the Wealth, offered a more viable strategy for framing budget policy.
Share the Wealth is looking for a ``fairer distribution of the country's current economic success''. Its campaign is being organised by the National Anti-Poverty Networks. The networks include the Irish Traveller Movement, Irish Rural Link, the Irish National Organisation of the Unemployed, the Community Workers Co-operative, the Forum of People with Disabilities and the One Parent Exchange and Network.
The Share the Wealth proposals include a ``massive once off strategic investment package to compensate communities who have been excluded from the Celtic Tiger boom''.
Current spending in the budget must ``demonstrate a real commitment to eradicating poverty and social exclusion''. The campaign also wants adequate resources for public institutions so that the National Anti Poverty Strategy is properly implemented.
The final part of the Share The Wealth campaign involves the taxation strategy implemented in the budget. This is where the Fine Gael proposals come into sharper focus.
Share the Wealth proposes that the ``budget must direct tax cuts towards the lower paid and ensure that the tax take is sufficient to guarantee decent public services''.
Fine Gael want to extend the 24 per cent tax band, taking 160,000 workers out of the higher 46 per cent tax band. Under their proposals, no person earning less than £17,500 would pay tax at the top rate.
A second part of the Fine Gael proposals is the promise of a new 35 per cent tax rate for income earners who earn between £17,500 and £50,000. They also propose increasing the personal tax free allowances so that anyone earning £170 or less a week would pay no income tax.
The Fine Gael proposals include a little something for the lowest paid and some serious tax cuts for the middle income earners. They do not, though, take the necessary steps towards tax equality that are so badly needed in the 26 Counties.
For the past three years, research from the ESRI, Combat Poverty and the Conference of Religious in Ireland (CORI) have all come to the same conclusion - that tax cuts must be aimed exclusively at the lower paid.
This way, everybody benefits by the same amount in money terms but the low paid have the highest proportionate change.
The Fine Gael proposal's will actually amplify tax inequalities. Low income earners pay tax but get little of the tax reliefs open to higher earners. If they are in public or rented housing they get no mortgage relief. They are unlikely to be able to afford VHI cover and get no tax relief for this. Finally, they are unlikely to be in a private pension scheme and again will not get the tax relief higher income earners enjoy.
The current tax code creates inequity because it allows middle and high income tax earners to amass wealth and property. This is great for them but at the same time low income earners are put in a position where they will never be able to amass any savings, wealth or property.
There is then a very compelling argument to be made for diverting all the funds available for tax cuts to the low paid. This though, is an unlikely outcome for Budget 2000.
The parties are more than likely to spend the coming weeks offering different scenarios for slicing up the exchequer surplus millions. These proposals will all have one common theme - how to put more money in the pockets of the middle and high income earners with a sop to the low paid. This makes the Share the Wealth Campaign all the more important.
The Share the Wealth campaign is organising regional launches on 4 October in Kerry, Clare, Leitrim, Offaly and Galway. There will be a national rally on 20 October beginning at 11am at Custom House Quay, Dublin.
Partnership meaningless for workers
A poll conducted by the Amalgamated Transport and General Workers Union (ATGWU) has found that more than 75 per cent of trade union members believed that the Partnership 2000 agreement had no impact in improving the partnership in the workplace.
Nearly 40 per cent of workers believed that there was less co-operation between management and workers over the last two years. Profit sharing has been enjoyed by only 23 per cent of workers, while just over one third of workers surveyed had access to company share options.
Another worrying finding in the survey was that 71 per cent of workers said that there had been no increase in the amount of financial information provided by companies to their workers.
This is especially worrying in the light of EU directives requiring many larger companies to set up works councils where such information would be disseminated to and discussed by the workforce.
This autumn the trade union movement, the Dublin government and the employers organisations are beginning yet another round of new partnership agreement negotiations. Will those in the ICTU and SIPTU who are so much in flavour of so-called social partnership wake up to its increasingly obvious flaws?
Rugby tax haven
Next month's rugby world cup is set to earn the game's International Board £50 million. The profits will come from selling television rights and from merchandising schemes.
The International Board will also avoid tax because of the fact that they moved their headquarters to Dublin's Stephen's Green. Two companies, Rugby World Cup Ltd and International Board Trust Ltd, have been formed here. All approved sports bodies in Ireland are tax exempt. In Britain, where most of the world cup will be held, corporate tax must be paid the same as any other business. Most other states levy taxes on their sporting bodies, except South Africa.
The Finance Director of the International Board, Robert Brophy, has denied that the move was for tax purposes. It is only because ``Ireland is one of the foremost rugby playing nations''.
The last time Ireland was a foremost rugby nation, self-made tax haven Charlie Haughey was still in power and thousands of other Irish citizens were developing their own tax havens in bogus offshore bank accounts. I bet none of them ever considered declaring themselves a sporting entity.