From Socialist Voice, November 2010

The wealth has not gone away!


The number of Irish millionaires is on the increase, at the same time that we are all supposed to “share the pain.” Individual wealth is not systematically counted by the Government, and even in these times the Commission on Taxation was instructed not to measure wealth.
     Our economists are not too keen on measuring wealth either. (Surprise, surprise!) There has been one study in a decade, and none of them were state studies. But what all these studies showed was that we had and continue to have a very unequal society.
     Various international organisations have developed statistics and models for measuring the income of states and inferring individual income and wealth from these, but they have mainly concentrated on measurement of income. In recent years broader factors, such as basic needs, have been included. These include the Gini coefficient, which measures levels of equality on a scale from 0 to 1, where 1 is perfect equality.
     The main international bodies to study wealth and income are the UN, OECD, ILO, EU, and individual governments. The overwhelming conclusion of all these bodies, without exception, is that wealth is concentrated in the hands of fewer individuals, and that income disparity is growing while total wealth is increasing in the world.
     Following the Second World War there was a move to greater equality in Europe, mainly because of the strength of the labour movement, the unions, and resistance movements, and because of the existence of socialism as an example of societies sharing resources and the produce of labour.
     What happened from the 1970s is well documented, when the rich and powerful started the great claw-back, and used the media as their new weapon to lie and to divide the people, refusing anyone with alternative opinions access to their controlled organisations.
     In all the studies, Ireland came out as one of the most unequal societies in the world, ranging from second-worst to fifth or seventh-worst, depending on the study and the years measured; but all showed a level of inequality consistent with an ideological political view that we know as neo-liberalism.

World exploitation of people intensifies

• A report by the UN Research University in 2008 found that the richest 2 per cent of adults in the world own more than half global household wealth.
• The most comprehensive study of personal wealth ever undertaken also reports that the richest 1 per cent of adults alone owned 40 per cent of global assets in 2000, and that the richest 10 per cent accounted for 85 per cent of the world total. Shockingly, the bottom half of the world’s adult population own only 1 per cent of global wealth. (Wealth is defined as physical and financial assets minus liabilities.)

The ultra-rich get ultra-richer

Other measurements of world wealth are carried out by organisations that service the wealth-owning class, such as Merrill Lynch, Forbes, Boston Consulting Group, the Economist, Business and Finance, Bank of Ireland, and National Irish Bank.
     The reason for this is to gather information for that class, and not, as one might imagine, for the benefit of this or any other country.
     And we all know of the hidden bank accounts, offshore accounts, and tax avoidance and evasion, and that wealth is much higher than this. So what do they say? Interestingly, just like the findings of other studies, that wealth has become more concentrated since the 1970s.
• One measurement is that of so-called “high net worth individuals” (HNWIs), those who have net assets (excluding domestic residence and luxury goods) of $1 million or more. According to the fourteenth annual “World Wealth Report” by Merrill Lynch and Capgemini, there were more than 18,100 such parasites in Ireland in 2009, an increase of 10 per cent in one year. Worse still, there were 181 more “ultra-HNWIs” (owning $30 million or more of investable wealth).
• A report by Bank of Ireland, “Wealth of the Nation” (2007), stated that the top 1 per cent of the population enjoys about €100 billion worth of assets, and owns 20 per cent of the country’s wealth.
• The same report stated that Ireland had 33,000 millionaires (excluding principal private residence)—an increase of 10 per cent on 2006; and as the number of HNWIs is increasing it can be deduced that there hasn’t been much change.
• Over the “Celtic Tiger” years, from 1995 to 2007, the personal wealth of the richest 1 per cent of the population grew by €75 billion. In 2006 alone Irish speculators invested €8 billion in overseas property; in 2007 the figure was €11 billion. €41 billion was invested in commercial property in the period 2001–06; much of that money was invested in commercial property outside Ireland.

Attacks on workers all over Europe

• Global wealth has returned to where it was before the financial crisis in 2008, and the number of the world’s millionaires grew by 14 per cent, according to the Boston Consulting Group, which produces yearly lists of world wealth.
• Global wealth increased by 11½ per cent in 2009, to $111.5 trillion, just short of the 2007 figure.
• Europe has overtaken North America as the richest region in the world, with assets of $37.1 trillion (slightly higher than in 2007). North America follows with $35.1 trillion, followed by Japan, with $14.9 trillion. North America still has the most concentrated wealth in fewer households.
• Equity holdings among the European rich rose from 21 per cent of total assets in 2008 to 26 per cent in 2009 as European stock market capitalisation grew by 38 per cent.
• Europe still exploits Africa, Asia, the Mediterranean coastal countries, South America and the Caribbean. It is cleaning up the oceans and the ocean bed and more recently intensively carving up the Arctic and Antarctic regions.
• The Merrill Lynch Capgemini report confirms that the recession did not stop the growth in wealth and that the temporary drop in 2008 has been recovered in 2009. The number of HNWIs in the world returned to 10 million in 2009, growing by 17 per cent, and their financial wealth increased by 19 per cent, to $39 trillion.
• The latest figures from the Central Statistics Office, published in October, show that the value of Irish residents’ holdings of foreign securities at the end of December 2009 amounted to €1,251 billion, an increase of €86 billion on the revised 2008 level of €1,165 billion. “The bulk of the increase was in equity assets and was largely the result of a recovery in global equity markets.”
• According to figures issued by the US Treasury in 2010, €42 billion in US treasury bonds is owned by Irish “residents.” Given that it is argued that a great deal of this money is the profits of American transnational corporations that use Ireland to filter profits from higher-tax countries, there is still a substantial amount not accounted for by this.
• In August 2010 returns by the Revenue Commissioners for 2008 showed that there were 38 people with an income between €1 and €1½ million, 11 with an income between €1½ and €2 million, and 23 people who received more than €2 million.
• The chairperson of the Revenue Commissioners told the Dáil Public Accounts Committee in February 2009 that there are almost six thousand citizens (so called) who consider themselves tax exiles and who pay no income tax, and at least 440 of these were the “super-rich.” The Finance Act (2010) introduced an Irish domicile levy. This will affect those Irish individuals with Irish assets of €5 million or more and whose worldwide income is greater than €1 million. The annual levy proposed is €200,000. This is a sop to placate an angry public, as such an amount is negligible to the super-rich. Instead there should be a proper wealth and property tax, excluding main residence.
• The Revenue Commissioners reported in January 2010 that they had collected €114.35 million as part of their special investigations, including investigations of illegal offshore assets and interest reporting.
• They also said in August 2010 that they expect to collect up to €40 million by the end of this year from special investigations into trusts and offshore structures that have been used to evade tax.
• They expect to recover tax in the region of €9 million from other areas, such as hidden accounts, legacy investigations, bogus non-residence accounts, and insurance premium accounts.
     These figures clearly show that we have substantial wealth in the country, while other reports, such as the Survey on Income and Living Conditions, other CSO and Revenue statistics and analyses done by Combat Poverty, the Tasc research network, Barnardo’s and many others point to a high rate of poverty relative to other countries and an enormous gap between rich and poor.
     Transnational corporations in general have increased their profits and are intent on exploiting even more intensely the rest of humanity.
     Wealth is globalised, so it is difficult to pinpoint at any one time exactly how much there is; but the debate, especially since the recession, is entirely based on Government or EU figures, and it begins at the point where governments—which are the tools for redistributing wealth back to the rich—get us arguing about the division of the scraps that we are allowed to have.
     It’s pathetic to see the Labour Party and the trade unions colluding in this. We don’t need figures to show the class division of our country, with the wealthy still living it up, the continuing investment in luxury goods, the “exclusive” restaurants and shops, the Golden Circle so well documented by Tasc.
     Contrast this with the waiting lists, emigration, dole queues, housing lists and ghost housing, dilapidated schools, the abolition of social services, and the sale of our public assets.
     It’s time to move the debate back to the increasing concentration of wealth not only in Ireland but in the whole world; and only then will we be able to show where the money will come from. We must bring back the political debate and stop running after the economists and trying to justify ourselves by using their figures and well-worked-out political ideology.
     We don’t accept these deficits: we want the wealth created by all working people shared equitably.
[DUB]

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