News Analysis

Wednesday 1 October 2014

David Quinn: Love affair with Democrats isn't reflected in how we vote at home

Published 04/01/2013 | 05:00

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IN Government one of the chief jobs of Fine Gael has been to resist increasing income taxes. One of the chief jobs of Labour has been to resist spending cuts. This is what the supporters of both parties expect of them. And yet if you were to ask Fine Gael supporters which party they support in American politics the vast majority would say the Democrats. This is very, very strange because the Democrats are much more like Labour than Fine Gael.

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Earlier this week America stepped back a few inches from the edge of a so-called 'fiscal cliff' which would have introduced automatic spending cuts and tax increases.

In the end the Republicans were forced to accept tax increases on anyone earning above $400,000 per annum. The Democrats wanted a lot more than this.

However, the Republicans in return received almost no spending cuts. In fact the ratio of tax increases to spending cuts is in the order of 40 to one. In America the party of government spending is the Democrats. The party of tax cuts is the Republicans. So why in the world do so many Irish people love the Democrats and loathe the Republicans?

One reason is history. Historically, the Irish in America supported the Democrats although that is no longer as true as it once was.

But a bigger reason is that our media, led by RTE, give a very one-sided account of American politics which demonises the Republicans and canonises the Democrats.

This fools most Irish people into thinking that if they lived in America they would vote Democrat. If that's the case then they should all be voting Labour here in Ireland and they're not. Indoctrinating us that the Democrats are the good guys and the Republicans the bad guys is also a way of indoctrinating us about Irish politics by proxy.

If the Democrats are to be applauded for resisting spending cuts and the Republicans to be booed for resisting tax increases then logically we ought to applaud the party of public spending in Ireland as well, namely Labour.

A lot of the moulding and shaping of Irish public opinion is, of course, much less subliminal than this.

For example, the big controversy after last month's budget wasn't the property tax but the cut to the respite care grant.

In other words, it was ordained that what really concerned the average person wasn't the fact that they are about to be hit with a big new tax, but a cut to a particular item of spending. This reflects the view that public spending and tax increases are basically good things in themselves. As mentioned, Fine Gael in power is trying to resist increases to income tax. However, what we rarely hear from Fine Gael – or anyone else – is the moral case for lower taxes.

As a result of this near silence, what we hear incessantly instead is the moral case for public spending.

This case is easy to make; public spending helps the poor and the vulnerable, the sick and the elderly.

It allows us to educate our children. Any cut to public spending is therefore an attack on all these categories. Higher taxes allow us to help them even more.

The first argument against high taxes is obviously the pragmatic one that if you remove from people too much of what they earn you remove the incentive to get ahead and that harms the economy for everyone.

As it is, any income above €41,800 (if a married couple) is taxed at more than 50pc when all charges are added together.

This is before the property tax kicks in. The moral argument is simply that people have a right to keep the money they earn and therefore taking money from them has to be absolutely justified.

First, it has to be well spent, not wasted. Lots of public money is wasted. Second, your money should not be used by politicians as a way to buy votes. This happens all the time. Benchmarking public sector pay was a classic of the genre.

Third, public spending must not be counter-productive. For example, public spending might drive private providers out of business who could provide the same service more efficiently. Also, welfare spending can rob people of the incentive to work and that is not only counter-productive, it is immoral.

Finally, as one commentator has said, lower taxes "allow people to make their own decisions, to save when they wish, to give if they choose and to spend on what matters to them".

In other words, lower taxes mean more freedom.

This obviously has to be balanced against the needs of society, but freedom is a good in itself and should only be limited with good reason. Irish politicians need to become much better at making the case for lower taxes.

They need to realise that it is not permitting people to keep their own money that needs justification, it's taking their money from them that must be justified.

Irish Independent

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