Thursday 27 October 2016

Charlie Weston: The squeezed middle are not the ones dodging their taxes

Published 10/04/2016 | 02:30

Charlie Weston tweets at @CWeston_Indo
Charlie Weston tweets at @CWeston_Indo

The so-called 'squeezed middle' does not exist - or so trendy economists with left-wing leanings like to argue.

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Try telling that to the people who stump up for health insurance, have paid their water bills, pay property taxes and have been hit hard by a slew of austerity taxes on everything from petrol to their pensions.

Those who make up the squeezed middle are not members of elite syndicates engaged in aggressive tax avoidance.

They are not among the million people who have a medical card.

Having a medical card means you get free GP services, prescribed drugs for a small charge, fee hospital treatment and free dental treatment.

Medical card holders pay the universal social charge at a reduced rate on their income, among other benefits.

On the other hand, families in the squeezed middle pay around €2,500 a year for health insurance, despite funding the HSE through their taxes and paying over the odds for prescriptions in pharmacies.

Having to pay for health insurance represents double taxation, with those stumping up doing so because they fear they will have to wait for ages to be treated in a public hospital.

The squeezed middle has no involvement with the Panama tax scandal, which has uncovered hidden offshore dealings of politicians and well-connected insiders.

Nor will you see the squeezed middle feature among the more than 60 high-net-worth individuals (including senior barristers and partners in legal and accountancy firms) who reached private settlements with the Revenue Commissioners over an 'aggressive' tax-avoidance scheme involving drilling oil wells in the US.

The settlement means that the names of those who settled will not be published in the Revenue's quarterly list of defaulters.

So your neighbour, the van driver, fails to pay all his tax and gets hit with penalties and has his name published in the newspapers. Asked why the high-net-worth individuals escaped being named, Revenue said it can't name people who make voluntary disclosures relating to undisclosed tax liabilities.

And remember that transport workers and others in the public sector are seeking substantial pay rises. Yes, there is a big issue around lower pay rates for new entrants than existing public sector employees. But the problem with this is that any pay awards will be paid for by people in the private sector and the self- employed.

What all this shows is that those who make up the squeezed middle are easy marks, especially if they are in the private sector.

Sunday Indo Business

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