If you can pay more, you should pay more

The middle classes need to acknowledge just how privileged they are. By Vincent Browne.

We in the middle classes in this society are in denial about the scale of our privilege. Many of us think we are living on the margins, that we count among the disadvantaged, that the burden of the crisis falls disproportionately on us, that we cannot take any more 'pain'. We are delusional.

Just focus on those being paid between €50,000 and €80,000 a year (and this includes couples who jointly earn these amounts). The average pay of those in this bracket is about €62,500, which is more than double what 55 per cent of people in this society are paid (not counting social welfare payments). These in this bracket pay just 23% of their total income in income tax, including the universal social charge.

People earning €80,000 and over each year get one-third of all income paid in this society, although they amount to only 9 per cent of all people who pay tax. And what tax they pay, even after the 7% universal social charge is taken into account, amounts to only 33%. All the palaver about the rich paying tax at over 50% is just wrong, the top 9% of earners pay only 33% on average.

Even the 49,195 paid €140,000-plus pay little enough tax, just 36% on average, inclusive of the social charge. These earn on average €268,199 a year and although they comprise 2% of the income tax-paying population, they get 16% of total income.

These figures are extrapolations of data compiled by the Revenue Commissioners. The data is of tax cases, rather than individuals – some couples present their tax returns together and they are regarded as cases. The data is the estimate by the commissioners of the income earned by all income tax payers (or cases) for the current year, 2011. It is compiled to estimate the expected revenue from income taxes.

The 193,495 who are paid €80,000 or more receive average gross pay of €143,392. Cumulatively, they are paid €27.7 billion. Were these people to pay 7% more in tax, bringing their income taxes to an average of just 40%, the State would receive close to a further €2 billion in taxes. Were those in the €50,000-€80,000 bracket to pay just 4 percentage points more of their income in tax (from 23% to 27%), there would be a further three quarters of a billion more in tax revenue.

So how is it that plans for the forthcoming budget don’t feature this? A further €2.75 billion in increased income taxes, which could be a combination of closing off loopholes, tax increases and, ideally, an increase of a few percentage points on people earning over €50,000? It would go a long way to meeting the €3.6 billion target.

A large chunk of the remainder could be obtained by reducing the pay of everyone in the public service to a maximum of €120,000, with those in the public service paid over €50,000 also taking a hit.

How is that not preferable to reducing or curtailing rent allowance for people genuinely on the margins, to cutting back on special needs assistants, to paring back carers’ allowances, to devastating community development programmes, to denying the most basic amenities to people in our community, including water, electricity and sanitation to some Traveller halting sites, where people have been waiting for housing for more than 12 years?

How can the likes of Enda Kenny, Eamon Gilmore, Michael Noonan, Joan Burton, Pat Rabbitte and Jimmy Deenihan, justify taking such relatively huge incomes from public monies and denying others elementary services?

Isn’t there something obscene in the fat cats of our society demanding the further immiseration of those already miserable, while cosseting themselves even more?

There is a good reason to vote against Martin McGuinness in this presidential election, for his complicity in murder and atrocity in Northern Ireland (and there is that complicity even if since 1974 he was merely a Sinn Féin facilitator, a cheerleader for the IRA and an apologist for them).

But there is also a good reason to vote for him (aside from his accomplishments in the Northern Ireland peace process and his considerable success as Deputy First Minister). That good reason is his commitment to take a salary commensurate with the average industrial wage.

For the president of the country, the person, who, according to the Constitution, “shall take precedence over all other persons in the State” to be living on the wage the average income earner lives on would be a powerful expression of solidarity with the average person.

That is the average person afflicted with the austerity by the official policies enacted by persons obtaining multiples of the average wage and caused by people obtaining multiples of multiples of the average wage.

Whoever is the new president should follow Martin McGuinness’s prescription, so too should the members of the Government and the Dáil, certainly all those who advocate social welfare cuts and the impairment of basic service. And, incidentally, the rest of us as well might think about it – or at least take the further taxes without complaint.

Image top: Images_of_Money.