Economic Policy

Redistribute Economic Resources

Irish capitalism has led to unacceptable levels of income and wealth inequalities. If the income created in Ireland was shared out equally, it would provide €55,000 for every person per annum. This is clearly not happening, however. Earlier we noted the fact that large sections of the population are living in poverty. The other side of this coin is vast accumulations of wealth. The figures below give some sense of the problem.

People Before Profit is committed to making sure that everyone has enough to live with dignity and respect. To do this, we would implement a raft of measures that would tackle the wealth and incomes of the top 5-7% of the population. This would have a number of important benefits. In the first instance it would make Irish society a fairer and more just place to live. It is not acceptable that workers – who are the real wealth creators – do not get the bulk of the rewards from their work. Instead it flows to the top of society, creating powerful lobby groups that work hard to protect the status quo.

By redistributing wealth we would also be redistributing political and economic power. This is essential for a functioning democracy. We would also eradicate poverty, deprivation and economic insecurity. Meanwhile, those at the top would still have extremely comfortable lives. This is surely a political choice worth making. Below we summarise the main measures we would take to even out the resources created in Ireland.

• Close corporation tax loopholes and double the tax take. Ireland’s official rate of 12.5% is too low – but corporations do not even pay this. Because of a host of loopholes, the effective rate is between 4-5%. In the latest available figures, corporations declared €156 billion in profits but only paid €6.2 billion in tax. This is far lower than an average worker would pay. As a first step, People Before Profit would establish a minimum rate of 12.5% that every corporation must pay. In effect, this measure alone would more than double the tax take from corporations. But we would also look to increase this rate over time.
• Make Apple pay their back taxes. In 2016 the EU Commission exposed Ireland as a tax haven. Deals made by the Irish Revenue Commissioners in 1991 and 2007 allowed Apple to get away with a tax rate of less than 2%. They now owe the Irish people €13 billion plus interest – a total of €18-19 billion. This would go a long way to developing an indigenous development strategy but instead the Irish government is spending millions in order to refuse the money. People Before Profit would drop all legal cases and take the money immediately.
• A Tax on Millionaires. People Before Profit would levy a tax of 2% on the top 5% of wealth holders. Before this would kick in, however, we would allow one million euro to be set aside for their family home. This would affect the richest 18,000 households in the state, each of whom has roughly €3 million in accumulated wealth. The tax would bring in roughly €3.25 billion annually.
• New Taxes on High Earners. People Before Profit would introduce new tax bands on those lucky enough to earn more than €100,000 per annum. The table below shows the initiative

This would likely bring in €2.25 billion annually.

• Higher Rates of Employers PRSI. Irish employers pay significantly lower PRSI than their European counterparts. To bring them more into line, People Before Profit propose increasing each of the current rates by 2%. We would also introduce a special high earners PRSI contribution of 19.75%. This is estimated to bring in €1.4 billion.
• Introduce a Financial Transactions Ta The financial sector bears primary responsibility for the economic collapse of 2008. Ireland currently has the 15th largest international financial sector in the world and the fourth largest shadow banking system. This makes the economy extremely vulnerable to financial crises. It also allows big finance too much control with a Clearing House Group, made up of financial interests, embedded in the Department of the Taoiseach. The Irish Financial Services Centre currently manages €1.9 trillion in assets. One way to tackle the financial sector is to impose a financial transaction tax. A Financial Transactions Tax of 0.1% on Transactions of Shares and Securities and 0.01% on Derivatives would bring in €610 million. This would reduce speculation and give the state something towards the social cost of the last crisis.
• End the Status of Tax Exiles. The Irish rich want it both ways. They want to use Irish services to make their money, but they don’t want to pay for it. People Before Profit would end the charade of people pretending to live in Ireland for half the year, but paying nothing to provide public services. To do this we would end the tax dodging status of Irish non-residents.