Last week the Revenue Commissioners published their annual statistical bulletin. It included figures for the range of income that people declared for tax purposes in the latest year for which a full breakdown is available, which is 1999-2000, writes Fintan O'Toole
Maybe it's just because I'm mathematically illiterate, but these figures seem pretty incredible to me.
There were just 70,874 people declaring incomes of between €35,000 and €40,000; 88,411 between €40,000 and €50,000; 47,489 between 50,000 and €60,000; 37,027 between €60,000 and €75,000; 23,340 between €75,000 and €100,000; 12,580 between €100,000 and €150,000; and 9,891 earning over €150,000.
These figures, it is important to remember, include many married couples with two incomes being jointly assessed for tax purposes.
Does anyone actually believe these figures? We are talking about the height of the boom, when money didn't so much talk as roar and consumption was as conspicuous as a woman in a miniskirt singing Faith of Our Fathers in Mecca.
In April 1999, for example, 15 houses in a new development in Carrickmines in Dublin, costing about £1 million each, were sold within four hours of going on the market.
In that year, some 55 million credit card transactions worth £3.3 billion were transacted.
Around 30,000 people took ski holidays that winter, in addition to the 700,000 who had taken summer sun holidays by the end of October.
Put the Revenue figures beside new car sales in 1999 and 2000 and you get some idea of their credibility. According to the Revenue figures, about 380,000 Irish individuals or couples earned more than €30,000. Yet about 295,000 registered a new car in these years.
Unless we assume that a huge proportion of those who could possibly be able to afford a new car went out and bought one, the income figures seem incredible.
Look at it another way. According to the Central Statistics Office's Household Budget Survey for 1999-2000, almost a quarter of Irish households had two or more cars. That translates into about 300,000 taxpayers. Since being able to afford to run two cars is a reasonable indication of a high income, there ought to be far more high earners than appear on the Revenue figures.
This is especially obvious at the top end. By my calculations, in the years covered by the Revenue figures, 13,749 people in the Republic bought either a new BMW or a new Mercedes. (Many other luxury cars were sold as well, of course.)
This alone suggests that the figure of 22,471 people earning over €100,000 is deeply suspect. No one outside of that income bracket could possibly afford one of these cars. Unless we assume that well over half of these people bought a Merc or a BMW in that particular year, the figure just doesn't convince.
Armed with this scepticism, I had a closer look at the Household Budget Survey, which is generally regarded as giving the most accurate picture of what we earn and spend. According to the 1999-2000 survey, the top 10 per cent of households had an average annual income of about €67,000. This should mean that 116,000 taxpayers were on this kind of income. But the Revenue figures have only about 80,000 taxpayers in this bracket.
Another way to look at this is to take a few of the professions whose earnings we know about.
In January 2000, for example, prison officers were earning an average of €929 a week or, on an annualised basis, over €48,000 a year. Members of the Garda Síochána were earning an average €875 a week at the same time - €45,500 on an annualised basis.
There were 3,200 prison officers and 11,700 gardaí - a total of 14,900. Yet in total there are supposedly only 88, 411 people with incomes in the €40,000-50,000 bracket. Is it really likely that a sixth of this total could be accounted for by just two public service jobs?
In 1999 the average earnings of primary and secondary teachers were €35,000. Two teachers married to each other and taxed jointly would thus have a before-tax income of €70,000. There were 40,000 primary and secondary teachers, but only 37,027 people in total with incomes supposedly in the €60,000-€75,000 income bracket. Even if we assume that all the teachers were taxed as single people, they make up an incredible proportion of the 90,000 people on incomes of between €30,000 and €35,000.
Or take an example from the high end of the scale. We know that in the year 2001 the insurance industry paid out fees of €440 million to lawyers involved in compensation cases. Even if every one of the 6,500 lawyers in the country was getting an equal share of this money, that would work out at about €70,000 each from this source of income alone.
But we don't see anything like this level of income reflected in the tax declarations.
All of the figures I've used here took me a few hours to assemble. I am not a statistician or an accountant. If even I can work a few of these things out, surely the experts at the Revenue and in the Department of Finance can see how incredible the declared income figures really are.
Yet these figures shape not just the public finances, but the access of citizens to a whole range of State grants. Unless their unreality is acknowledged, how can we even begin to pretend that the system operates fairly?