- The Observer,
- Sunday July 7 2002
Blue and white-collar workers, particularly in Dublin, long suspected that big farmers, owners of agri-industrial businesses, property developers, bosses in the tourist industry and their political friends were defrauding the country by avoiding tax.
The publication yesterday of the 10,000-page report into the activities of Ansbacher (Cayman) Limited has confirmed they were right.
From the early Seventies, millionaire businessmen, ranchers, beef barons, hoteliers, horse breeders and, of course, some of their friends in the political establishment avoided paying tax thus robbing the country of millions of pounds, money that could have been used to build hospitals and schools.
But what makes the tax evasion even more galling for those workers who were taxed at source was that those ripping the country off were the same people lecturing them on the need for economic austerity.
Moreover, during the recessions of the Eighties and early Nineties the Central Bank of Ireland would hike up interest rates to the point where first-time house buyers were forced out of the market.
When the republic was on the verge of bankruptcy in the early Eighties the golden circles that were avoiding tax payments were the most vocal in calling for cuts in public services. One of the three politicians named in yesterday's report, is, surprise surprise, Charles J. Haughey, the man who once urged the nation to tighten its belt - at a time when his own waistline and wallet were expanding thanks in part to paying no tax and receiving back-handers from businessmen.
All the time Des Traynor was running his scam, helping individuals and corporations avoid tax, PAYE workers were paying half their income to the Exchequer. Even up to the mid-Nineties the average PAYE worker was being taxed at 48 per cent. Given the extra payments of PRSI and at one stage the Youth Levy, a tax aimed at addressing youth unemployment, this meant the tax man was taking 60 per cent off PAYE workers' income. Single people faced an even more punitive taxation regime.
Even today, Irish workers are still paying more tax than almost every other European employee, with the exception of Denmark, which, unlike Ireland, has a cradle-to-grave welfare system. Yet, unlike Denmark, there is no free healthcare for PAYE workers.
Only three politicians, Haughey, the late Hugh Coveney and Denis Foley, are named in the report. However, the most astonishing aspect of this financial scandal is the lack of political fall out. It is clear that the two main parties - Fianna Fail and Fine Gael - have long had overlapping interests with many in these golden circles. Yet neither party has suffered electorally from the revelations of the various tribunals and reports into corruption.
Back in 1980 I remember watching hundreds of thousands of PAYE workers marching through the centre of Dublin in protest against punitive taxation levels. Almost a quarter of a century later nothing it seems has changed. There has been no revolution in voting patterns, no emergence of normal left/right politics. Despite the publication of the Ansbacher report the golden circle and its political allies still hold the reins of power. Apathy and inertia rule.
None the less this has been a bad few weeks for rapacious capitalism, especially for the accountancy and legal professions some of whose members enabled the likes of Enron and WorldCom to falsify their profits and manipulate share prices.
For those in Ireland who paid their taxes while others got away with paying nothing, for those in North America who lost their jobs thanks to crooked accounting there should only be one outcome from this raft of financial scandals: jail terms for the guilty.
Only by putting those guilty of massive fraud and tax evasion, whether in Ireland or the United States, behind bars will the cynicism of the hardworking taxpayer begin to disappear.
