Tax code in crisis

Equity and justice must replace tax evasion and avoidance

Another week, another financial scandal. Over the last week the media has soaked the repercussions of the disclosure that foreign firms nominally resident in Ireland could be using their status here as cover for criminal activities such as fraud and money laundering.

This latest episode adds to the previous disclosures about National Irish Bank selling its customers controversial deposit packages which allowed them to escape tax obligations in the 26 Counties.

This comes on top of previous disclosures about the Ansbacher accounts; three separate reports have been sent to the Director of Public Prosecutions. Add to this recent Revenue Commissioners survey which showed the state's top earners paying less than half the tax PAYE workers are burdened with.

The only conclusion that can be reached when analysing these ongoing events is that the 26-County tax regime is in crisis. It is riddled with the twin diseases of tax evasion and avoidance.

By making tax avoidance a legal pastime for those who can employ tax consultants and exploit loop holes in the tax code the Dublin Government's financial authorities have created a parallel culture of tax evasion.

Successive Dublin Governments must take most of the blame. It is they who have created the system of lax financial regulation that has allowed the current crisis emerge.

The core player in financial regulation in the 26 Counties is the Central Bank. Their operations are shrouded in secrecy. They have refused to disclose information to the Moriarty Tribunal and under current legislation are free to do so.

This week as we move on from another financial scandal there is only one way to move forward. That is to establish a new tax code where equity and justice are its central components and a reformed open and accountable Central Bank is regulating the 26 Counties.

Workers still have a world to win

Communist Manifesto 150 years on

``The history of all hitherto existing society is the history of class struggles.......The proletarians have nothing to lose but their chains. Working men of all countries unite''.

These are the first and last lines of one of the shortest revolutionary texts ever published - the Communist Manifesto. The manifesto, which is less than 12,000 words long and written by Karl Marx and Friedrich Engels, was 150 years old last week. To mark the anniversary the James Connolly Education Trust invited renowned marxian scholar and author Istvan Meszaros to speak last Wednesday in Dublin on the manifesto and the role of marxian theory in the 1990s.

There are certain drawbacks to attending a meeting organised on a left wing platform in Dublin today. One is that, as the chairperson of the Meszaros meeting stated, there is always a fear that many people come not just to listen but to spout off large tracts of didactic theoretical propositions and dogma. On this the Trust score highly as most of their meetings don't entertain such nonsense.

The strength of Istvan Meszaros' talk was that he brought the Communist Manifesto to life in a 1990 setting showing its relevance for the aspiring social revolutionaries of today. He described the Manifesto as being one of the ``most influential of programs'' and its publication ``had repercussions all over the world''. No one, Meszaros said, could ``deny the importance of the manifesto'' though there are plenty who minimise its importance''.

There were two initial themes to Meszaros' lecture. The first was the fallacy of modernity and modernisation in the 20th Century. The second was addressing the co-called ``crisis of marxism''.

Modernism was, according to Meszaros, ``a favoured political term of politicians who want to avoid the issues of today. His examples were Tony Blair and one of his Labour predecessors, Harold Wilson. For both of these Meszaros said modernisation was a ``shy way of referring to capitalism''. The end result is that they ``cannot solve social and economic problems by putting labels on them''.

The crisis of marxism was ``a crisis for the political movements who have abandoned it''. It was caused by the ``onset of the structural crisis of the capitalist system,'' he said.

Meszaros believed that ultimately nothing can save the capitalist system as it now exists. It had hit relative and absolute limits. Global capitalist organisations such as the World Trade Organisation, IMF, World Bank, G7 and the EU had all ``run out of impact''. They were, he said, ``riddled with contradictions.

In terms of absolute limits to capitalism Meszaros asserts that there are four clear limits. They are: The contradiction between transnational companies and national states; The environmental consequences of creating a system of destructive production; The illusion of a partnership between labour and capital. ``If equality is admitted capitalism is undermined,'' said Meszaros; Chronic unemployment. ``Capitalism is incapable of a finding a solution''.

The final question Meszaros posed was ``How do we respond to all this? The revolutionary parties have been outflanked... We have to question the system in general. There is a need for a rearticulation of radical forces. The challenge the Communist Manifesto put 150 years ago is still in front of us today''.

The Communist Manifesto can be bought at Connolly Books, Essex Street Dublin priced £2.50.