Sir, – Given that many sole traders and small businesses have already had to deal with sharp drops in their incomes as a result of the economic collapse, I am surprised by the timing of the expert group’s proposals to increase PRSI contributions on the self-employed (Home News, October 10th).
As it stands, many PAYE tax breaks (such as the single-person tax credit) are not available to self-employed persons; and other measures (such as the 3 per cent universal social charge surcharge on incomes over €100,000) specifically target the self-employed, with the result being that these workers already take home less than PAYE workers on equivalent gross salaries. Just as shifting the major share of redundancy payments to employers will in some cases force employers to lay off more workers than they might otherwise, I have no doubt that a further reduction in the net incomes of the self-employed will cause many to rethink the viability of their enterprises, and seek out salaried jobs within companies, or indeed consider business opportunities in other, friendlier jurisdictions. Put another way, many will – in my view – conclude that running a business here isn’t worth their while.
Official Ireland has for a long time waxed sanctimonious about the small, open and business-friendly nature of the Irish economic environment. The reality – borne out by grim unemployment data and the fact that 90 per cent of our exports are generated by foreign-owned companies – is that a combination of a personal tax system that acts as a disincentive to owner-managers and other factors such as employment laws that border on the irrational have taken us to a place where a recovery led by profitable, home-grown companies is inconceivable.
Since the foundation of the State, self-employed persons and small-business owners have been seen as politically unorganised and thus electorally insignificant. Seen in this light – and considering that our bankrupt country spends nearly two out of every three euros it collects on financing the welfare state – one might be forgiven for concluding that these proposals have more to do with revenue generation and political expediency than social protection of the hard-bitten self-employed. In considering these proposals, to Minister for Social Protection Joan Burton I would say the following: Please help us: don’t help us. – Yours, etc,