Madam, – Garret FitzGerald often writes about the immorality of tax evasion but never of the immorality of rapacious, confiscatory taxation. He can blame whoever he likes for tax evasion, but he should stand up and shoulder his share of personal responsibility for its growth. He was a senior member of the 1973-77 Fine Gael/Labour coalition that presided over the idiotic, rapacious, confiscatory increase of income tax to a marginal rate of 77 per cent (including 10 per cent surcharge, plus social insurance, levies, etc, and VAT rates up to 35 per cent) with tax-free allowances and tax bands so small that the highest marginal rate affected moderate incomes. It was the cluelessness of that coalition, whose only answer to any problem was to increase taxes, that drove broad segments of Irish society at all income levels to tax evasion and avoidance.
There is no immorality in evading rapacious taxation. For many at the time, tax evasion was essential for survival. Then it became embedded, with all the consequences that ensued when taxation levels were reduced.
But it first proliferated under Fine Gael/Labour and Mr FitzGerald, and it was they who first flinched at effective tax enforcement. The succeeding Fianna Fáil governments upon whom he heaps mountains of blame, and his own Fine Gael/Labour coalitions of the 1980s whom he somehow fails to mention, merely followed his precedent. The culture of tax evasion is the most enduring legacy of the 1973-77 coalition.
For all his praise of civic morality and social cohesion in other countries, all countries with high levels of taxation experience high levels of tax evasion. Look no further than German efforts to pressure Switzerland regarding untaxed German deposits.
Perhaps additional taxes are needed now. But individual taxes should not be looked at in isolation. The cumulative burden of all the different taxes levied on payroll, salary and expenditure needs to be fully considered, especially on marginal income. The combined marginal burden of income tax, PRSI, health and other levies, and then VAT and excise duties on the expenditure of what remains, is in the range 60 per cent to 90 per cent depending on the product purchased.
I think the current cumulative burden on marginal income can be fairly described as confiscatory and there is a challenging burden of proof on those who advocate higher taxes to show both that the revenue they forecast will be realised and that the increased taxes will not be economically counter-productive.
If high taxes truly were the path to prosperity, Ireland in the mid-1970s to late 1980s would have been paradise.
I graduated in 1979. There were plenty of jobs then, but I was determined not to be a tax slave to spendthrift politicians such as Mr FitzGerald. My tax avoidance measure was simple, I emigrated immediately. – Yours, etc,
Madam, – Garret FitzGerald (Opinion, October 16th) reflects on the failure of church and State to cherish civic responsibility among its people. On two occasions he makes allowance for “alien rule” and “alien government”. Is he being fair in this respect? The 1800 Act of Union removed most of Ireland’s rotten boroughs decades before those of England and provided 100 Irish members to represent the people at Westminster, a number subsequently increased to 105 when all religious and dissenting hindrances were removed. For more than 100 years Ireland was governed precisely as for Scotland and Wales with joint representational government with secretaries of state in Edinburgh, Cardiff and Dublin. There was no question of a colonial status anywhere in the British Isles.
Over a period of 118 years, Ireland developed a mature political entity with a steady build-up of the Home Rule Party which eventually, as the Irish Parliamentary Party (IPP), succeeded in putting Home Rule on the statute book in early 1914, a remarkable constitutional achievement. The electoral reforms of March 1918 almost trebled the size of the Irish electorate and most of those voting in the December 1918 general election did so for the first time. Some 50 per cent turned out, of whom 47 per cent voted for Sinn Féin who thereby won 73 of the (Westminster) seats. The IPP was wiped out; a complete and mature political entity composed of Irish patriots was dismissed to oblivion, and the rest, as they say, is history.
Is Garret FitzGerald being fair to Ireland and himself when he refers to “alien rule” and was not the total loss of the IPP a tragedy for Ireland? Were not the IPP members the very people needed to help give birth to the Irish Free State without bloodshed, mayhem and civil war, which sowed seeds of discontent still felt today? Is a flawed perspective of history also part of a problem? – Yours, etc,