OPINION:Fianna Fáil's number one priority is to protect haves against the have-nots, writes Fintan O'Toole
WE MUST, we are told, face the financial facts. So let's remind ourselves of a few, from a Bank of Ireland Private Banking report last year:
Excluding the value of housing, 1 per cent of the population holds a third of the wealth and had assets of €100 billion in 2006;
Including household property, the top 1 per cent holds 20 per cent of the wealth, the top 2 per cent holds 30 per cent and the top 5 per cent holds 40 per cent;
There were 33,000 millionaires in 2006, 3,000 people with between €5 million and €30 million and 330 people with more than €30 million;
Over the course of the Celtic Tiger years, from 1995 to 2007, the personal wealth of the top 1 per cent of the population grew by €75 billion.
These figures make it clear that a relatively small group of people made a hell of a lot of money from the boom. Even if we assume that this wealth has now dropped by, say, one-third, that still leaves the top 1 per cent with about €50 billion in personal wealth.
We also know that it is largely a myth that this money was invested back into the Irish economy to create jobs, develop new products and benefit the rest of us. A very large slice of it was invested, not in creating new and innovative businesses, but simply in bricks and mortar or concrete and glass. A staggering €41 billion was invested in commercial property in 2001-2006. And much of this money was in turn invested in commercial property outside Ireland.
In a neat historical irony, the rising new native elite chose to become absentee landlords.
In 2006 alone, Irish people invested €8 billion in overseas property. In 2007 the figure was €11 billion.
Here's an odd thing, however. If you look up the Revenue Commissioners' figures for the earnings of taxpayers, they don't seem to match the Bank of Ireland's figures for the wealth of the elite. The Revenue tells us there are just 7,857 taxpayers with incomes of more than €275,000 and indeed only about 25,000 taxpayers with incomes of more than €150,000.
The vast bulk of these taxpayers, moreover, are not individuals but jointly-taxed couples.
Going on tax returns, our wealthy elite is mostly made up of couples who each earn an average of €75,000-to €137,000. Is this even vaguely credible?
In effect we have, on the one hand, about 40,000 people sharing personal assets of €100 billion and on the other we have fewer than 8,000 households with a declared taxable income of more than €275,000.
On the one side, we have figures that suggest that the elite was increasing its wealth by an average of at least €10 billion a year in the last few years. On the other side, the Revenue assessed the total incomes of the top earners (a far larger class of people in their categorisation) at just €4.7 billion. The figures are not for the same year - Bank of Ireland's are for 2006, the Revenue's latest statistics are for 2004 - but the discrepancy is too vast to be explained by this factor alone.
The only reasonable conclusion is surely that the very rich have been able, through the boom years, to keep the vast bulk of their wealth outside the taxation system. We know that in the 1980s and early-to-mid 1990s, the rich did this largely through illegal tax evasion.
Almost certainly, however, the pattern over the last decade has been one of legal tax avoidance. In essence, the Fianna Fáil-led governments of that period have quite deliberately allowed the elite to do legally what they previously did illegally - make vast amounts of money and pay very little tax.
This is why the Budget cuts are so outrageous. Brian Lenihan's sickening appeal to patriotism was addressed primarily to the elderly, to children, to people with disabilities, and to low- and middle-income families. It completely ignored the people whose patriotism could actually be questioned - the elite that has creamed off €75 billion, paid very little back in tax to the society that made them rich and, just to rub it in, invested much of that money in commercial property abroad with no benefit at all to the Irish economy.
There was absolutely nothing in the Budget that would have given a moment's anxiety to any of the super-rich, to the clever tax avoiders, to the so-called tax exiles who are our new bogus non-residents, to the 5 per cent that has 40 per cent of the wealth.
When push came to shove, Fianna Fáil's populist mask slipped and it emerged quite nakedly as the party whose number one priority is to protect the haves against the have-nots.
In that context, the people who are being hurt have a perfect right to fight back.
The fiscal crisis is all too real and serious pain is unavoidable. But when it comes to taking our patriotic punishment, those who have avoided pain for so long should be first in the queue.