Saturday 3 December 2016

Middle class still screwed - for saving the country

Private-sector middle and high earners are the real heroes of our recovery, 
no thanks to 'insider' 
Ireland, says Eddie Hobbs

Eddie Hobbs

Published 03/08/2014 | 02:30

JAILED: Former Fianna Fail junior minister Ivor Callely was sentenced to five months in prison for fraudulently claiming mobile phone expenses. Photo: Frank Mc Grath
JAILED: Former Fianna Fail junior minister Ivor Callely was sentenced to five months in prison for fraudulently claiming mobile phone expenses. Photo: Frank Mc Grath

Through seven years of crisis, the public has been fed a diet designed to anger; suggesting there is another way, that Ireland is an unfair place to live and rear a family, where the rich get rich and the poor get poorer. This is the mood music that scores the economic policies of the left, chief among which is the call to redistribute wealth through confiscatory taxes. The latest ESRI study has fatally undermined how the myth of Irish inequality is constructed - but you won't hear much about it on RTE, which rarely challenges high-tax champions.

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Although the ESRI cares not to highlight the material importance of this study in undermining a cornerstone supporting much Irish political capital, the truth is that Ireland - largely thanks to the progressive nature of a tax system that pre-dated 
the crisis and its social protection programmes - is a less unequal country, post-crisis, than is France, at whose high-tax altar Sinn Fein openly worships.

The ESRI study on 'The Distribution of Income and the Public Finances' indicates that Ireland has not only achieved fairer redistribution of income than France, but has performed more fairly than many other crisis economies by operating steeply progressive taxation and by maintaining social protection buffers, where the Irish middle classes have saved the country both financially and socially. Transfers to social protection programmes rose from 13pc of GNP to a peak of 20pc before the recent decline to 17pc, but, despite this, the risk of poverty, where incomes fall to below 60pc of the median, jumped from 40pc to 50pc.

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