Slí Eile: Even when Ireland recently enjoyed the status of being the sixth wealthiest country in the world in terms of GDP per capita it was not, and is not, a fair society.
Many live in absolute and consistent poverty by any reasonable objective measure.
Defending those on low income is a moral imperative and the second principle proposed. See previous blog on first principle here.
Too few wealthy individuals pay tax and what they pay is a fraction of what is paid by low-paid workers. Many within our society continue to be treated with disrespect and are systematically excluded from the places of power and decision-making. A combination of fiscal and other measures should guarantee no reduction over the next three years in real living standards of those at 60% of median income. A root and branch reform of the Tax system is called for to allow for the creation of a Basic Income Guarantee for all citizens of this Republic. Allied to this a moratorium on all house repossessions should be a condition of any re-structuring of the banking system.
4 comments:
Sli Eile - it is important to emphasise the economic as well as the social imperative to poverty-reduction. Simply put, inequality is bad for economies and make them particuarly susceptible to recessionary episodes. It is no coincidence that the collapse of the global financial system was rooted in eploitative practices in the US housing market - practices, that themselves, exploited huge inequalities and the inability to key groups (particularly women) who couldn't access basic rights under the prevailing economic regime.
In Ireland, the recession has been exacerbated by high inequality matched with a poor social protection system. The weak automatic stabilisers helped ensure that our GNP collapsed at a far faster rate than it would have otherwise - led by a collapse in consumer spending ten times the Eurozone average. Crudely put, if people don't have money (or in-kind social infrastructural support) they are not only 'poor', they can't make a contribution to stabilising the economy.
It's, then, only one small step to defining them as the problem. The Government is preparing to take that step.
Slí you can argue that the very wealthy should pay more tax that they currently do, and I'd agree with you.
But to state that in 2009, the wealthy pay only a *fraction* of the tax paid by low-paid workers is incorrect. Unless the fraction you'd in mind is an improper one? :)
You are of course aware of the tax-relief immunity of the income & health levies, as well as the minimum effective tax rate on high earners announced in Budget 2006 (see the section entitled "A Minimum and Fair Tax" in http://www.budget.gov.ie/Budgets/2006/Documents/FinancialStatement.pdf).
On your suggestion that the real living standards of those on 60% of median income should be protected, have you considered that this median income has been falling rapidly and will continue to do so for the foreseeable future?
I should add that two thirds of the Irish population pay less than ten percent of their gross income in income tax - Ireland has a particularly steep marginal income tax curve, or looked at another way it is extremely progressive.
I see two options here: (i) slash PRSI payments for the poor and raise how much income tax they pay or (ii) cause the major costs for the poor to dramatically drop, which really means the cost of housing as it's by far the biggest expense.
The first is political suicide in the present climate. The second can be achieved one of two ways: subsidy or tax. One could subsidise rent costs for the poor like they do in Britain, but that simply creates pockets of self-reinforcing deprivation while ballooning house prices elsewhere and that's bad enough already in Ireland (and Britain for that matter). Or one could tax residential (not commercial) property prices to force them downwards, and therefore the rent charged on them downwards.
Of course, the rich of the electorate would go nuts if their government deliberately robbed them of the nest egg that is their house. It could be done if something major were done about the care of the elderly in this country - most pensioners quite correctly believe that they will be financially abandoned and their only source of serious money for medical bills is their house. Personally, I'd have their children pay for abandoning their parents much as adults must pay for abandoning their children, and the state only chips in when the children are unable to foot the bills, but there are many other ways to achieve the same.
I might add that reducing housing prices to market equilibrium - which they are certainly not at present given the massive surplus of empty residences - would not just help the poor, but would substantially help the economy. I myself, and almost everyone of my age group that I know, could finally afford to move out from living with our parents (to which we all returned when the economy went south)!
Niall
You say that "Many people live in absolute and consistent poverty by any reasonably objective measure."
How many people in Ireland live in absolute poverty in Ireland? Who are these people? How can we immediately help them?
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