Economy

tolet

Open Letter on the Housing Crisis

, , Comment Closed

An Open Letter to the Dublin City Council, Real Estate Agencies in Dublin, the USI, the PRTB, the HEA, Department of Education and skills, the NAMA, Landlords, the Citizens and Students of Dublin City on the Housing Crisis in Dublin.

As well as being sent to all of the above today it was also published on www.increature.com issue 4 on Sunday the 12th October

Dear all,

We are two final year university students who live in Dublin and wish to express our profound discontent with some of the situations we found ourselves in during the housing crisis that took place this summer in the Irish Capital and the clear discrimination against students which is common practice in the rental market.

Between June and September, we were actively looking for private accommodation in Dublin. We sent several hundreds of emails, made hundreds of phone calls, many of which were from abroad, went to numerous viewings and spent a lot of time, money and energy looking for a place. This house hunt was long, stressful and, overall, a very unpleasant experience which resulted in us sacrificing a large part of our summer, spare time after work, family time and the possibility to advance with college work (readings, dissertation, etc).

We finally found a place two weeks before the start of the academic year. A place that we are not entirely satisfied with, but had to take because we had no other decent offers. We are somewhat relieved that we were lucky enough to have found something, as we are very aware of the fact that many students were not as lucky and are therefore forced to commute, live in hostels or even have to take a year out of college.

One of us is a final year Student in the faculty of arts and humanities who worked the whole summer in a well-respected office in Dublin and will continue to work part-time throughout the academic year. The other is a final year Political Science and Geography student who works during the summer months and is financially supported by her father who works in one of the European Institutions in Brussels. Both of us have letters of references from all our previous landlords stating we are responsible tenants, that the rent and all utility bills have always been paid on time and that we left our previous flats in good condition. Furthermore, we both have good work references from well-respect institutions.

Having such documents, one must wonder how it took us three months to find a mediocre residence.

To us, the answer is very simple. The housing crisis meant that it was hard for everyone to find a place in Dublin due to the fact that this year there was a 43% drop in supply in the rental market and a 7.5% increase in rental prices, but in particular students have a clear disadvantage and are discriminated against.

Read Post →

hidden_cityT

Arise Kilnamanagh and take your place among the nations of the earth

, , Comment Closed

Book Review: Hidden City: Adventures and Explorations in Dublin, Karl Whitney (Penguin Ireland 2014)

Dublin, perhaps uniquely, has suffered mythologization by genius and by sentimentality. Caught between Leopold Bloom and the Leprachaun Museum (yes, there is), the city of Dublin, the living breathing people and the physical structures they live in and on, has fallen out of sight. Joyce and Flann O’Brien caught its speech, but the one did it so perfectly people are afraid to read him, and the other was so accurate they think the humour is a laughing matter; James Plunkett wrote Dublin on a human scale and gave it flesh and blood characters, but is little known outside Ireland. We have ended up with Bloomsday and Paddy’s Day, the first now more kitsch than the second.

Karl Whitney has now written a book that gives us back Dublin as a city, not the set of a novel, or the battlefield of dreams of some misty eyed tourist in search of their heroic and downtrodden ancestors.

While some of the tourists might be inclined to follow Whitney’s Joyce trail—visit all of Joyce’s Dublin addresses in order (the Trieste equivalent includes his favorite knocking shop)—or even his Liffey descent—from where the river becomes tidal to the last bridge before the sea, crossing every bridge on the way—his bus game would be a bit too Situationist. In this one, you take buses for ninety minutes, changing bus every fifteen, crossing the road if a coin comes up tails. The first time he tries it, he ends up in an area with only one bus. A later attempt is no better. Taking a bus in Dublin has no element of play, but only `the extreme frustration familiar to the demoralized commuter.’ Whitney would not be the first artist crushed by the inadequacy of Dublin’s infrastructure.

Read Post →

bus

The ‘Taxes’ on Living Standards the Government Won’t Be Addressing

, , Comment Closed

With all this talk about taxation and Budget 2015 (and one of the few doing any plain talking is Fr. Peter McVerry – calling tax cuts for high-income earners ‘outrageous’) there are ‘taxes’ that people pay that the Government will do little, if anything, to address. Indeed, the budget will be framed in a way that undermines the Government’s ability to provide relief against these ‘taxes’.  What am I talking about?

We automatically assume that ‘taxes’ are something the Government levies.  Therefore, when we discuss ‘tax relief’ or ‘tax cuts’, we refer to reductions in things like income tax, USC, PRSI or VAT, though the latter doesn’t feature much.

However, there are ‘taxes’ that people pay when the Government fails to provide the services and income supports it should – if one accepts that we are a modern European state.  We can call these ‘taxes on living standards’.

Take, for instance, childcare:  in Ireland, a household can pay up to €800 a month and more for a childcare place.  In most other continental countries, childcare can cost as little as €150 per month and even less for the low-paid.  Why the difference?  In other European countries, childcare is financed through the public sector, usually local authorities.  In Ireland, people are forced on to the private market.  This is quite ‘taxing’ for these households.

If the Government rolled out affordable childcare, households with children could expect reductions of up to €500 to €600 a month – or thousands of Euros a year.  This reduction in childcare fees (‘taxes’ for those in need of this vital service) would be greater than any income tax cut.

Or take another example – public transport.  In other countries, public transport receives a high level of public subvention, or subsidy.  This ensures expanded services and affordable fares.  In Ireland, public transport receives an extremely small subvention.

Read Post →

1

What is Going On in the Irish Economy?

, , 8 Comments

After a deep recession, after years of stagnation, the Irish economy is growing in leaps in bounds.  The ESRI is projecting by 10 percent growth over this year and next.  These are almost boom-time growth rates.  Should we be a bit wary?

It’s hard to disagree with the ESRI’s Dr. John Fitzgerald when he wrote:

‘ . . . the standard EU harmonised national accounts are not a satisfactory framework for understanding what is happening in the Irish economy.’

This is primarily due to the impact of multi-nationals and the IFSC which can give a false reading of headline.  Let’s go through some of these categories and then come back to the question:  how satisfactory or reliable are the national accounts and growth projections based on those accounts.  This is a bit long and may be a tad technical in parts but hopefully you can stay with it:  it tells a story about how a story is being told – and it is the telling we should be wary of.

Multi-nationals and the GDP

Everyone knows that GDP is not the best measurement of the Irish economy.  But it’s not just because multi-nationals make profits here and then repatriate them (that is, take out of the country).  The reality is that the profits are not made here but are counted here.  Let’s look at two key sectors where multinationals dominate:  manufacturing and information & communication (the latter is where the Apples and Googles would be located). Note:  this is data supplied by the Irish Government to the EU.

Whatsgoingon1

Profits in Irish manufacturing nearly 8 times that of other EU-15 countries; in the Information & communication sector, it is over 3 times.  Clearly, these are not profits generated by employees in Ireland; they are generated in other economies and ‘imported’ here to take advantage of our low tax rate and our position in the global tax-avoidance chain.

The point here is that our GDP is distorted by multi-national profit-shifting – and that’s before you start taking account profit-repatriation.

Well, Then, We Can Use GNP

Well, no, that isn’t a satisfactory measurement either.  GNP is just the GDP after you take account of money flowing in and out of the country (and more money leaves Ireland than comes in).  Therefore, GNP is still distorted by the multi-nationals’ profit shifting that we saw above.

We can’t be certain if the ‘fake profits’ that appear in our GDP are automatically taken out by multi-nationals.  They may be retained or swim around the IFSC pool (don’t forget that US companies avoid US tax by keeping their money abroad). And not all money flowing out of the country are repatriated profits – they can be interest payments, indigenous multi-nationals investing abroad and households sending money out of the country.

Read Post →

1aa

Five Points for a Citizen Economics

, , Comment Closed

Budget time is really the only window where citizens are encouraged to engage in economic debate, and even then the space of time is too short and the range of topics up for debate too narrow to make much impact. When it ends, and for the other eleven months of the year, economics is the preserve of technocrats.

That is a serious problem. Economics is the discussion of how things in our society are produced and distributed. If you leave it to experts there is a big cost for democracy. Yet, while people feel comfortable engaging in debate about politics in the Middle East or presidential elections in the United States, there is a reticence to talk about economics.

Part of this is down to economics as a discipline, which has become increasingly remote from day-to-day life. The primacy of the market as a means to resolve problems has led to the rise of ‘market scientists’, who are seen as the authoritative voices on running an efficient economy. The language deployed by these experts is deliberately exclusive. Certainly they are unlikely to start explorations of economics with parables about pin factories, as Adam Smith did in The Wealth of Nations.

Yet they dominate economics discourse. When economics is discussed with any substance in the mainstream press market scientists from universities, think-tanks and finance houses are given free reign to make objective statements about the common good. Research by Julien Mercille has shown that between 2008 and 2012 77% of commentators on austerity were from elite institutions.

Another factor leading to the retreat of ordinary people from economic debate is the narrowing space for democracy in the economy. The democratic sphere only extends to areas where there is or could be public ownership. Outside of this decisions are made by private individuals or organisations. As wealth becomes concentrated in fewer hands, fewer economic decisions are made with public participation.

This has bred a cynicism about what can be achieved by discussing economics. With capital increasingly breaking free from taxation – and mobile enough to defeat strikes – people have come to accept that social problems can only be resolved by appealing to private individuals and organisations to solve problems profitably through the market. And so we are relegated in the economy from citizens to consumers.

This must be reversed if we are to build a politics in Ireland that can reclaim our society from the political establishment and the interests they serve. Joan Robinson, one of the great economists of the twentieth century, was once asked why people should study economics. She replied, “so that economists can’t fool you”. Implicit in this comment is the need for citizen economics.

Read Post →

sq_middle

Squeezing the Middle

, , Comment Closed

So the Government wants to give relief to the squeezed middle.

‘Taoiseach Enda Kenny has said easing the tax pressure on the “squeezed middle” will be a priority in the upcoming budget.’

The very first question is:  who exactly is the Taoiseach referring to?  The squeezed middle is an amorphous and infinitely elastic concept that can apply to just about anyone you want it to.  Let’s try and get a handle on this much-talked about but rarely defined group using the latest Revenue Commissioners statistical report.

Let’s define the squeezed middle as the middle 60 percent – between the lower and upper 20 percent group.  Remember, this doesn’t refer to everyone, just those in the workforce.  It excludes those without a job (pensioners, the sick and disabled, the unemployment, lone parents, etc.).

income_range

We can see that, according to the Revenue distribution tables, the middle 60 percent of earners have incomes between €8,700 and €51,300.  However, there is a big caveat here.  Couples where both spouses and civil partners are working are counted as one tax unit.  This means that while in the tables, a tax unit will show an income of €60,000 – this actually means the combined income of two people.  So they may both be earning well below the average income.

We can adjust for this but we have to make assumptions.  To breakdown the one tax unit where there are two people working, I assume that one spouse / civil partner earns 60 percent of the total, while the other earns 40 percent.  When this is done, the revised income range looks something like this.

revised_income_range

This is just an estimate (other might come up with slightly different numbers, working with this data – but it won’t change all that much).  However, looking at the two charts there are three striking things:

  • First, there are many in the squeezed middle that earn very little.  They will be low-paid, part-time, and underemployed (or precarious workers).
  • Second, those earning over €42,400 are in the top 20 percent   (€51,300 using the unrevised chart)
  • Third, between 64 and 73 percent of those in the squeezed middle (depending on which chart you use) are taxed at the standard rate, the marginal rate or are exempt.

A substantial number of the squeezed middle do not earn enough to pay income tax or earn below the top tax rate threshold – so any income tax cuts, never mind cutting the top rate of tax, will have no impact whatsoever.  Is this the group that the Taoiseach is referring to?

Read Post →

bf_ttip_t

TTIP Trade Deal: Bad for Democracy

, , 2 Comments

European and American civil society have deemed the Transatlantic Trade & Investment Partnership (TTIP) an anti-democratic threat to the environment, food safety and workers’ rights. Barry Finnegan explains.

While likely to generate increased profits for large companies by removing and reducing production costs associated with health and safety standards (referred to as ‘unnecessary and burdensome, restrictive barriers to trade’), neither citizens nor parliamentarians can get access to the details of the TTIP currently being negotiated by the European Commission and the US Department of Trade; while claims of economic and job growth have been exposed as mere marketing messages.

Private Corporate Courts

Despite the fact that the EU and the US have the world’s most advanced and well-financed legal systems, the TTIP makes provision for a new private ‘court’ called an Investor-State Dispute Settlement (ISDS) which would allow a company who imagines its future profits being reduced as a result of legislation, to sue a government by way of a private arbitration case.

In the absence of a list of clearly identified problems with the Irish and European justice system, only one conclusion can be drawn from the TTIP negotiators’ desire for a private international court for foreign investors which would allow them to bypass Irish and European courts: namely to avoid the jurisprudence and constitutional rights accompanying the application of justice in democratic societies.

This point was well made by Business Europe (the lobby organisation for 35 European national business federations – including our own IBEC) in their document, Why TTIP Matters To European Business, where they explained how they want to be able to use ISDS in TTIP to overthrow the right of the Americans to use the US constitution to protect themselves. They explicitly state: “If in the US a domestic law is adopted after TTIP enters into force and its content violates the [TTIP] Agreement, it can still be found constitutional by domestic courts. So the only possibility for the investor to ensure its adequate protection is to bring the claim to international arbitration”.

Read Post →

water_charges2

No Easy Victories

, , 4 Comments

The campaign for the Right2Water in Ireland is rapidly growing in strength and confidence. Working class communities have been staging determined and inspiring protests to prevent the installation of water meters in their areas, the best of the trade union movement has mobilised to help support and coordinate these efforts at the national level and the Irish political left has rallied to the cause. In response to the growth of the movement, the Irish State has let loose its dogs of war. As a result of which recent days have witnessed heavy handed and provocative policing from An Garda Síochána, concentrated mainly in Edenmore, Donaghmede and Coolock.

Footage of Gardai man handling women and minors, and generally trying to intimidate and bully peaceful protestors has emerged. Many protestors have reacted to this with dismay, and believe that the Gardai are in breach of their “oath” because of the way in which they are trying to force through the installation of unwanted meters. This idea that the Gardai are acting abnormally ties into other quasi-legal arguments within the movement about the need for “consent” to be liable to pay the water charges and related matters.

As the movement grows in strength, it is important, also, that its energies be focused, so with that in mind it seems right to dispel some of the misconceptions about the role of the law, and the police, in the struggle for the right to water. The movement and campaign for the Right2Water is the most electrifying and significant development in Irish politics for some years, but in order for it to reach its full potential we should heed Amilcar Cabral’s advice that we ‘tell no lies. Expose lies whenever they are told. Mask no difficulties, mistakes, failures [and] Claim no easy victories’. By dispelling some of the appealing, but ultimately unhelpful, arguments swirling around the movement, it will be possible to move forward in a more determined, focused and effective manner.

Read Post →

attac

Apple Deal is ‘Tip of Tax-Dodging Iceberg’

, , Comment Closed

Press Release from Attac Ireland

Ireland’s deal with Apple, branded ‘illegal’ in a preliminary judgment by the European Commission, is just the tip of the iceberg when it comes to tax-dodging by corporations here – with full cooperation from the State.

So says Attac Ireland, the Irish branch of the global activist group that campaigns for financial justice, including shutting down tax havens and taxing transactions.

Findings from the European Commission suggest that the State cut a special tax deal with Apple in return for job creation in Ireland by the multinational corporation.

“While the jobs created are relatively few, the loss in revenue to the Irish state is enormous,” Marie Moran of Attac Ireland said.

Globally Apple has $54.4 billion in offshore profits that have been barely taxed at all, thanks in part to a complex arrangement of Irish subsidiaries, known as the ‘Double-Irish’.

“Under Irish law, if the Irish subsidiary is controlled by managers who meet outside of Ireland, then it is treated for tax purposes as if it is a non-Irish company,” Conor McCabe of Attac Ireland explained.

“Companies such as Apple and Google, as well as pharmaceuticals, assign patent rights to these subsidiaries, which then charge the main Irish company a royalty fee for using these patents.” McCabe continued. “Under Irish tax law, royalty payments are tax-deductible. In effect, these companies charge themselves for using their own products, and then use that charge as a tax write-off. This is the Double-Irish.”

Marie Moran noted that while international attention is fixed on the case of Apple, the practice “has implications for a very large number of corporations based in Ireland for tax purposes. In fact, according to the Revenue Commissioner’s own reporting, the majority of companies based in Ireland pay corporation tax far below the headline rate of 12.5%, with some corporations paying no tax at all.”

“This arrangement is a form of corporate welfare that is not only potentially illegal but deeply anti-social,” Harry Browne of Attac Ireland added. “At a time when Irish citizens are bailing out the losses of private banks, and have faced cuts to social welfare, the State is complicit in measures that shore up the enormous wealth of the corporate sector, and erode social fabric and infrastructure.”

As part of its campaign for financial justice, the European Attac Network is calling for a global taxation for corporations, ‘unitary taxation’. This means that large corporations would be taxed as a single entity on the basis of a joint report of the activities and profits of all subsidiaries worldwide.

Under unitary taxation, profits would be split by a levy allocated to those countries, for example, based on the variable wage payments, fixed assets and sales. This measure would ensure that corporations cannot avoid tax payments through complex transfer pricing and other arrangements.

In addition to calling for unitary taxation, Attac Ireland calls for an immediate investigation into the legality of Irish tax arrangements, and a commitment from the Irish government to close down the socially costly and morally bankrupt ‘double Irish’ loophole.

Read Post →

Kerry2

China’s is the world’s greatest contribution to the real development of human rights

, , 1 Comment

The following article was originally published on 2 June 2014 and dealt with a resolution passed by the US House of Representatives. However its arguments clearly deal with the issue of human rights in general. For the reason’s given in it, China’s is easily the greatest contribution made to human rights by any country in the world.

This version is taken from John’s post on Key Trends in Globalisation which was published today.

* * *

On May 28, the U.S. House of Representatives chose to debate a resolution expressing its concern over the issue of “human rights” in China. This makes it appropriate to make a comparison of the real records of the U.S. and China on human rights.

This is a vital issue as human well-being is certainly the sole goal of any correct policy — including in that the right of each nation to pursue its national sovereignty and national culture, which is why China’s “national revival” and overall human progress are inseparably linked.

Real human beings have an immense number of needs and desires ranging from basic ones, to have good health and enough to eat, through to the most complex — the most advanced fields of human culture or science. Objectively only extremely developed societies, with enormous economic and social resources, can approximately meet all these needs.

Consequently the attempt to reduce “human rights” to a Western style political structure, as though having a “parliamentary” system were the most important question facing human beings, is ridiculous. The real issue was very well put by the BBC’s correspondent in China, Humphrey Hawksley:

“I hear from an Iraqi wedding photographer who had lost so many friends and family members that he would gladly have exchanged his right to vote for running water, electricity and safety; from an Argentine shoe maker who bartered trainers for food because his economy had collapsed; and from the African cocoa farmer whose belief in the Western free market left him three times poorer now than he was thirty years ago.”

The example of women in China and India can readily be taken to illustrate the real issues involved in human rights. A Chinese woman’s life expectancy is 77 years and literacy among Chinese women over the age of 15 is 93 percent, an Indian woman has a life expectancy of 68 and literacy rate over the age of 15 is 66 percent. India may be a “parliamentary republic” but the human rights of a Chinese woman are (unfortunately)far superior to the human rights of a woman in India. Anyone who does not understand or admit that there are better human rights if a person lives nine years less or more and whether they are literate or illiterate is either out of touch with reality or a liar.

Read Post →

LivingWage

Mark Fielding Speaks to the Nation: We Don’t Owe You Squat

, , Comment Closed

In the excellent Irish Times series on the Living Wage, Mark Fielding, Director of ISME (Irish Small and Medium-Sized Enterprises) has put it bluntly to workers and the nation:

‘It’s not our responsibility to give someone a living wage.’

That’s telling them, Mark. You want a wage that can afford you a minimum adequate standard income, don’t come to us. Not our problem. Be lucky to have a job – if we decide to hire you.

This is Thatcherism Irish-style. There is no such thing as society, only Mark’s members. But to be fair to Mark, he’s got form on this issue.

‘ISME chief executive Mark Fielding called on the Government to scrap the minimum wage . . . He said the minimum wage had failed to benefit the low paid . . . ‘

So scrapping the minimum wage would ‘help’ the lower paid. Hmmm.

Mark is at pains to explain the extraordinary burden his members suffer:

‘The minimum wage is €8.65. But it’s really €9.68, when you take into account employers’ PRSI contributions.’

Oh, my – a wage floor of €9.68 per hour. That sounds really bad. Workers in our hospitality sector (hotels and restaurants) must be really costing Irish employers a bomb – especially in comparison to other EU-15 countries. But is this the case?

hos_sectOur labour costs (made up almost exclusively of wages and employers’ PRSI) are far lower than most other EU countries in the graph. Labour costs would have to rise by 27 percent just to reach the mean average; they would have to rise by over 50 percent to reach French levels.

Of course, this data (the latest from Eurostat) is from 2011. Maybe Mark is worried about recent trends in low-paid sectors. Let me put his mind at ease. Irish labour costs in hospitality rose by 1.3 percent up to 2013; in the EU they rose by 3.2 percent. We’re even further behind.

That a representative from a business organisation would give out about wages, or paying higher wages, or even paying a decent wage is nothing new or unexpected. However, this ‘whether-people-can-live-on-the-wage-I-pay-has-nothing-to-do-with-me’ position got me to thinking: do all employers think like this? Would they all agree?

It’s hard to say in this country where the debate is dominated, loudly and persistently, by so many Mark Fieldings. But it is interesting to take a look at business organisations overseas, in the US, where such groups are no slouch when it comes to promoting their economic interests.

Read Post →

irishwaterT

Demanding the Future: The Right2Water and Another Ireland

, , Comment Closed

This article was originally posted on Critical Legal Thinking on the 29th of September.

The American abolitionist Frederick Douglass once observed that if you find out ‘just what any people will quietly submit to … you have found out the exact measure of injustice and wrong which will be imposed upon them’ and that such injustices ‘will continue till they are resisted with either words or blows, or with both’. In Ireland, after six years of austerity and regressive tax reforms that have punished Irish working people for the benefit of Irish and European bond holders, it seems the Irish establishment may have finally discovered the measure of injustice that the people will not tolerate.

The Irish government is currently implementing a plan to install water meters, so that people’s domestic water usage can be monitored and they can be charged for the amount they use. In this way they are abandoning the traditional funding model for water provision in Ireland, which saw it paid for out of general taxation. This move by the Irish government is consistent with a global trend over the last twenty years towards the increased commodification of essential services, with water seen as a particularly lucrative market. Taking advantage of the economic crisis, as most governments in Europe have, the Irish government has accelerated a broad neoliberal policy drive (privatisation of services, cuts to public sector jobs, regressive taxes) under the well-worn mantra that “There Is No Alternative”.

However, this new tax–this commodification of an essential public good–is being met with trenchant resistance from working class communities throughout the island. From Crumlin to Togher, Edenmore to Caherdavin, communities have mobilised to prevent the installation of water meters in their areas. In these protests the community activists have remained resolute in the face of attempts at intimidation from both the company established to commodify the water service, Irish Water, and the police. As well as engaging in direct action to prevent the installation of meters, the bourgeoning movement is also encouraging a boycott of the attempts by Irish Water to enrol residents as “customers”, and calling for non-payment of any future bills.

Read Post →

111t

IBEC’s Myth Debunking is Just Bunk

, , Comment Closed

IBEC has published a paper entitled ‘Debunking Irish income tax myths’.  At its core it contains misleading, highly selective and ultimately disingenuous arguments.  In short, it is bunk.  Let’s go through one of their main arguments and see where they are misinforming the debate.

Personal Taxation – It is Lower than the EU Average

IBEC puts forward two graphs (Figures 2 and 3) to show that Irish personal taxation is much higher than in the EU-27.  This is an audacious presentation.  They use data selectively and exclude large parts of personal taxation.

(a)  Using GDP and GNP

IBEC produced the following calculations.

111According to IBEC, this proves that Irish personal taxation is higher than the average of the EU.  They further claim, that on these numbers, Irish ‘taxpayers’ are paying €3 billion more than the EU average on a proportional basis.  The problem is that they are not comparing ‘personal taxation’; they are comparing income tax.
They exclude a large portion of personal taxation; namely, social insurance or PRSI.  In almost all other European countries, PRSI plays a much greater role than income tax.  In the EU, PRSI makes up 37 percent of total personal taxation; in Ireland, it makes up only 12 percent.  In seven countries, revenue from PRSI is higher than revenue from income tax.  In the Netherlands, income tax raises €46 billion; social insurance, however, raises €63 billion.

Not only did IBEC ‘mould’ the data around the conclusions they wanted, they also mixed the measurements to suit their argument.  When comparing GDP, they used an ‘arithmetic’ average for the EU.  However, when using GNP, they used a ‘weighted’ average.  The difference is that in the former, you average the individual percentage of each country; in the latter you add up all countries together and calculate the average. It allows IBEC to claim that income tax makes up 7.8 percent of GDP (arithmetic) whereas using the weighted measurement gives a figure of 9.4 percent.

Here’s the actual data – using the weighted average.  All comparative data below is from Eurostat’s Taxation Trends in the European Union 2014.

IBEC 2

On all these measurements, Ireland is well below average.  On GDP we’re below, but we know that much of our GDP is multi-national froth.  Using the Fiscal Council’s hybrid-GDP (which compromises between GDP and GNP), we’re still below average.  Even when using GNI which is essentially GNP, we remain below, though less so.

If we use adjusted GDP we’d have to pay €3.6 billion more in personal taxation – income tax and PRSI combined.  However, this isn’t the best measurement.

(b)  A More Robust Measurement
There’s a problem in using GDP and GNP.  If, after years of recession and austerity, GDP and GNP are depressed, then you will probably not be comparing like-with-like with countries that didn’t have such an experience (or not in the degree we had).
There is a better measurement: the effective personal taxation rate.  This is the total amount of personal taxation revenue as a percentage of total wages and salaries.  The following is for employees (measuring the tax rate for self-employed is difficult as the data on self-employed income is limited) though it covers 83 percent of all those in work.

Read Post →

justice

Consumerism and Equality

, , Comment Closed

The consumerism generated by capitalism throughout the  ‘Developed‘ or ‘Western’ World is a major obstacle to tackling climate change, the biggest problem facing mankind.  So the next question must be: why is capitalism still so widely accepted?   Why do workers in the ‘West’ vote overwhelmingly for pro-capitalist parties?

One of the less obvious features of capitalism is that by exponentially expanding its ‘free’ market into every corner of  life it puts a price on everything, and it thereby becomes a great social leveller: kings and lords, upper-class birthrights and privileges decline as possession of money, which by chance can be acquired by anyone, comes to measure everything.  As a result, other than the massive inequalities of money, we now live in a society with a level of personal equality that was unimaginable throughout  human history up to perhaps 40 years ago for gender, race, single mothers, LBGT, etc.  But crucially this equality drive of capitalism has always encouraged constantly growing agitation by workers for a just and equal economic share of their social production. They now see themselves as the social equals of their bosses, which causes desperate problems for capitalists.  Capitalism thereby lacks the acceptance of difference which earlier civilizations did, and which could last thousands of years in spite of vast degrees of inequality, class divisions, emperors, slavery, etc.

England’s history demonstrates this capitalist dilemma. In response to the rapidly growing agitation the capital-owning class must react, like any ruling class, in two ways: some groups are violently repressed and exploited; some are bribed to keep them loyal. Thus colonies were plundered by Imperialism to deliver ‘bribes’ to English workers (noted in England by Engels1 ) finally resulting in the compromise of social democracy.    For example while the famine was devastating Ireland massive amounts of food were exported under British army guard to Liverpool. Violence was used in the 1819  Peterloo massacre of protesters.  But when Chartist agitation for equality  grew towards 1850, this time instead of violence the Corn Laws were ended to allow imports of cheap food to quieten the agitation. It is clear that most wars fought during Hobsbawm‘s Age of Empire2  and continuing today were concerned with access to cheap labour,  food, raw materials, and later oil.  The home working class was comfortable enough to forgo  dangerous agitation, even gaining the vote over the years. But after 2 diverting world wars, which were much caused by imperial rivalry, in the 1970’s there arose further demands for economic equality by English workers (e.g. the miners strike) and also agitation by the colonies for their own liberty, for the equality of nations.  As there were no new colonies to invade Thatcher and others in the West had to find another source of wealth to answer this new agitation.

Read Post →