The state giving advantages to the privileged.

ldxo15wus6fpgm · 13-11-2012 1:03am #1

So I'm doing a bit of college work, focusing on social policy and inequality.

I want to make it clear that I'm not looking for anyone to do my homework here, I have my work finished.

There was a little bit of it that asked about whether there's an obligation (legally or in reality) on the state to justify its actions where it confers an advantage on the more privileged people in Irish society. This got me thinking about the (apparent) surge in populism among the Irish in the last few year, probably mostly in response to the economic meltdown. You always hear the odd one calling in to a radio show such as Matt Cooper's or good old Joe Duffy, ranting and raving about politician's salarys and the gap between the few untouchable self-serving 'elites' who can manipulate government ministers, and the common man (or woman).

But I've never really heard anyone give a solid example of the state actually giving such an advantage to the privileged which is not available to people of a 'lower standing' (for financial reasons or otherwise) bar a few old favourites - public funding of private schools etc. This could be due to me tuning out after about 30 seconds of listening to them though!

So is our government really so self-serving? Has anyone any hard evidence showing the state supporting these 'elites'?

Cookie_Monster · 13-11-2012 3:11am

There are a few tax breaks designed for higher earners and those with the resources to pay accountants can use a myriad of account and tax laws and loopholes to minimise their taxes.
Even pensions receive tax deduction at higher rates (up to a limit) so serve higher earners more.

Politicians don't have to provide receipt for expenses, I bet low level public/civil servants do to claim any of their expenses and I would also bet their allowance are much tighter and more defined as to what exactly the can / cannot claim.

Dirk Gently · 13-11-2012 9:34am

I think there's a big scope for your topic, perhaps bigger than you might think. It's not neccessarily confined to what most percieve as privileged in society, most of whose privileges might not be readily recognisable as those state advantages are largely corrupt in nature and not readily available in a handy list for college projects.

Other than that though, any advantage the state gives someone is a disadvantage to someone else. For example, people who can't afford rent whom are in receipt of rent allowance from the state seems like a worthy cause but it in effect puts at a disadvantage those whom don't receive rent allowance, artificially keeping rents higher than they should be keeping a lot of lower paid workers out of the rental market and stuck living at home. It's not seen as the state helping the previlaged but it does paradoxically create a disadvantaged class, i.e those who could otherwise afford cheap accomadation but who now can not due to the state subsidising others.

I think finance and law would be some areas where you could probably find evidence for the state supporting elites, or at least not holding them to account as much as those outside of the financial elite. The constitution protects contracts, including pay and pensions of those reckless enough to burdon the state with bailing them out but does nothing to protect pay and contracts of those not in receipt of a bailout, i.e the average small/medium company gone bust as a result of a recession which those now protected helped create.

Up until recently church institutions were untouchable and even more recently with the childrens referendum the family unit enjoyed near immunity, not to mention social inequality such as marriage enjoying more benifits and protection when between a man and a woman as opposed to same sex couples or parents of nonreligious children not been able to educate their children free from religious dogma. If you're a single working person like myself paying a mortgage compare your tax credits and or state allowances with a married friend and while you might not call them previleged, you might come away thinking you yourself are at somewhat of a disadvantage because some lifestyle choices are more equal than others.

Also, compare corporate tax rates and the loop holes contained within against a paye worker who's tapped up for every cent available. One is an easy target due to their connection to the state via family, home etc, the other can demand special previlege due to their threat of flight, which the average worker doesn't have in their arsenal.

Capt'n Midnight · 13-11-2012 2:20pm

compare the nett income and asset value of the top 1% with the same for the bottom 10-50% since the economic crisis

shoulder the wheel etc.

djpbarry · 13-11-2012 3:58pm

Lydia Nice Register wrote: »

This got me thinking about the (apparent) surge in populism among the Irish in the last few year, probably mostly in response to the economic meltdown.

Populism has been rife in Ireland for far more than just a few years – it was a major factor in the economic meltdown: “Ever-appreciating property and low taxes for all!”

Lydia Nice Register wrote: »

But I've never really heard anyone give a solid example of the state actually giving such an advantage to the privileged...

Much of it is perception and/or assumption. There is, for example, a popular belief in Ireland that taxing the rich will solve all the country’s ills, when in fact middle-to-high earners pay the overwhelming majority of the tax take.

However, as Cookie_Monster says, having money allows one to employ people to find loopholes. That’s not really a case of the state assisting any “elite”, it’s just a case of some people being prepared to go to pretty extraordinary lengths to avoid paying tax (for example). There’s a pretty good example here in the UK, whereby individuals seek to be conferred with “non-domiciled” status, so they can avoid tax on their income earned outside the UK. I personally know of one individual who moved abroad for five years solely to take advantage of “non-dom” laws.

Boulevardier · 13-11-2012 4:58pm

I would argue that giving tax reliefs at the marginal rate is a subsidy to higher earners.

I also think that giving tax relief for non-use of public services (for example private health insurance) is similar, in that it takes money away from the public services and uses that money to subsidise private ones instead.

Capt'n Midnight · 13-11-2012 5:24pm

djpbarry wrote: »

There’s a pretty good example here in the UK, whereby individuals seek to be conferred with “non-domiciled” status, so they can avoid tax on their income earned outside the UK. I personally know of one individual who moved abroad for five years solely to take advantage of “non-dom” laws.

until we changed the law in 2008 our criteria for residency were laughable, it only counted if you were still here at midnight. Lots of congestion at Dublin Airport around midnight with private planes trying to get off the ground while others were circling to land all with the intention of being in the air at midnight

Even now heading up to Newry for the weekend saves you a few days.

http://www.citizensinformation.ie/en/money_and_tax/tax/moving_country_and_taxation/tax_residence_and_domicile_in_ireland.html

You are resident for tax purposes for a year if:

You spend 183 days or more in Ireland in that year from 1 January – 31 December or,
If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year. For example, if you spend 140 days here in Year 1 and 150 days here in Year 2, you will be resident in Ireland for Year 2.

For tax years up to 2008, each day you are present at midnight counts as one day in the calculation of residency for tax purposes. From tax year 2009 onwards, the midnight rule no longer applies, and you are treated as being present in the State, if you are present in the State at any time during that day.

Cookie_Monster · 13-11-2012 10:59pm

Boulevardier wrote: »

I would argue that giving tax reliefs at the marginal rate is a subsidy to higher earners.

but they pay tax at a higher rate anyway so balances it self out for the most part.

The concept of paying a higher % over a certain income is quite frankly ludacris and is a major subsidy to the lower earners.

Godge · 14-11-2012 1:09am

Boulevardier wrote: »

I would argue that giving tax reliefs at the marginal rate is a subsidy to higher earners.

I also think that giving tax relief for non-use of public services (for example private health insurance) is similar, in that it takes money away from the public services and uses that money to subsidise private ones instead.

That is one very good example. All tax reliefs should be standard-rated and capped.

One that some may not grasp is the way our banks have been capitalised by the state and are now using that capital to do deals with those who borrowed money to buy big homes and furnish them with all the latest gizmos while there are others who are homeless on the streets.

Interest relief for those who purchase buy-to-let. Think about it - this is the state subsidising people buying a second house!!

There are loads of examples within our tax system.

Then there was the clear example of a medical card for every over-70 in the audience (the Michael Smurfits of this world included) while there were poorer people with sick kids who didn't get a medical card.

djpbarry · 14-11-2012 10:49am

Godge wrote: »

All tax reliefs should be...

...phased out completely?

Godge · 14-11-2012 9:03pm

djpbarry wrote: »

...phased out completely?

Including the personal tax credit?

Mrs OBumble · 15-11-2012 12:10am

I'd argue that joint tax assessment for married people is advantaging the rich (older, richer people are more likely to be married). Especially since welfare entitlement is based on living together rather than marital status. The effect is that my partner's business is not making money, he would get welfare if he was single, doesn't because he's with me - but we're not married so don't get any tax-relief.

On a more micro scale: my choir offers a discount membership rate of the unwaged and OAPs. So we have elderly people who are getting large occupational pensions + state pensions + rent from properties they own, being subsidised in their hobbies by younger people earning 22k per year.

djpbarry · 15-11-2012 11:30am

Godge wrote: »

Including the personal tax credit?

Yep. A simple tax system is a tax system that is difficult to defraud. It would also be very straightforward for people to understand - you earn X, you pay X/Y in tax.

If there are individuals who are struggling to manage with their allowances removed, that's what welfare is for.

Godge · 17-11-2012 12:16am

djpbarry wrote: »

Yep. A simple tax system is a tax system that is difficult to defraud. It would also be very straightforward for people to understand - you earn X, you pay X/Y in tax.

If there are individuals who are struggling to manage with their allowances removed, that's what welfare is for.

I don't have a problem with that - everyone should pay something.

In fact, when USC was introduced it was an attempt to do that, however, an exemption up to 10k was later given.

To be honest, all income should be taxed, the lowest rate should be 10% and should apply to social welfare as well as wages.

Cookie_Monster · 19-11-2012 1:37am

djpbarry wrote: »

Yep. A simple tax system is a tax system that is difficult to defraud. It would also be very straightforward for people to understand - you earn X, you pay X/Y in tax.

If there are individuals who are struggling to manage with their allowances removed, that's what welfare is for.

a flat 16% or 17% on every cent earned would be revenue neutral* and far fairer. you could also have savings in the revenue by removing the need to have so many staff dealing with the crazily complicated system in place currently

* it's been discussed on here before and this percent was agreed upon as an applicable figure.

The state giving advantages to the privileged.

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