Monday, 21 March 2016

A Challenge to Ireland’s Wealthy

Paul Sweeney: “We can well afford to pay our current taxes, and we can afford to pay even more. Our state needs to invest this revenue in our struggling schools, in antipoverty measures and in infrastructure improvements.” So say a group of 40 New York millionaires.

They want to pay more tax. This is a challenge to Ireland’s high earners and wealthy. It is rare to hear Ireland’s wealthy and those on very high incomes arguing the case for greater equity. It was an American Chuck Feeney who led the way in philanthropy giving away his fortune to Irish education and other causes, including TASC. 

In contrast some of the very richest Irish go to great lengths to avoid paying income or capital gains tax here. Many are tax-registered in Malta, Monaco and other havens, but fly in and out to oversee their businesses here. 

The group of New York rich want higher income taxes on the 1 percent. In an open letter to Governor Coumo and legislators they say “we are deeply concerned that too many New Yorkers are struggling economically, and the state’s ailing infrastructure is in desperate need of attention. We cannot afford to ignore these challenges. As business leaders and investors, we know that the long-term stability and growth of a company requires investments in both its human capital and physical infrastructure. The same is true for our state.

In an echo of what is happening here, they say that NY state “has a record number of homeless families – more than 80,000 people – struggling to survive across the state.” 

The letter compiled by the Fiscal Policy Institute, a progressive think tank, and the Responsible Wealth project, a network of hundreds of the very wealthiest Americans who support “fair taxes and corporate accountability”.

A Credit Suisse survey in 2014 found that 91,208 Irish people had wealth of over $1 million, up from 77,000 in 2013.

There have been a very small number of very rich who have given large sums to good causes. One was the late Cathal Ryan, who died shortly after his father Tony Ryan, who set up GPA with Aer Lingus’ support and later Ryanair. He left €35m to various charities.

Philanthropy is very welcome, but seems to be rare enough for rich Irish people. Indeed many go to great lengths, as do many multinationals, to avoid (legal) even paying income or capital gains tax and certainly inheritance tax. 

Yet many wealthy people are uncomfortable with the level of homeless and poverty in Ireland and with growing inequality. The last government and other parties misjudged the people with promises of huge cuts in the USC. People wanted better public services. Taxation pays for these.

This question comes to mind: would TASC be able to muster a group of Irish millionaires who would publicly call for increased and more progressive taxes? 

It might be easier to compile a list of wealthy Irish tax exiles! 

Paul Sweeney is chair of TASC’s Economists’ Network.

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