January 2012        

Tax take fails to keep pace with odious debt

The Blueshirt minister for finance, Michael Noonan, has admitted that he got it wrong and that there will be a tax shortfall in 2011 as the Fine Gael-Labour coalition scurries to meet the demands of the EU-ECB-IMF Troika to pay for the gambling debts of bankers, speculators, and other scum. Tax that should be used to benefit the Irish people is siphoned off to pay for the debts of a few.
     As usual, the coalition has attempted to put a spin on its latest economic failure. They point to the rise in capital gains taxes and some stamp duties. In reality the increase in CGT was the result of a last-minute dash by big dealers to close transactions before the advent of increased tax rates.
     The state was just short of €25 billion in the red. Last year the figure was €18.7 billion. This year’s figure includes a whopping €9½ billion for recapitalising the banks.
     The main shortfalls were in the areas of VAT, which was almost €500 billion below target, followed by income tax, which was €327 billion below. This should come as little surprise to anyone with an ounce of sense, as VAT is a regressive tax, which hits most at those who have least. You can’t spend what you haven’t got, so the VAT take will fall.
     Likewise with income tax. It is mainly geared at the low to middle earners, with the rich relatively untouched. As unemployment increases and workers are forced on the dole or into low-wage jobs, income tax will fall.
     These shortfalls were offset to some extent by the universal social charge, which was imposed on workers’ pay in the 2011 budget. So the shortfalls in tax taken from workers was made up by other charges on workers. Anything to spare the rich.
     It is the old story of local capitalists protecting themselves even as the house falls down around them and they find their subservience to international capital deepening. They have no shame in watching their communities suffer, with cuts in wages, welfare, health, education, and other public services.
     And their greed is compounded by their acquiescence in the loading onto our backs of speculative debt that is not of our making. And we are expected to pay this debt in the form of more taxes—direct and stealth—and in the destruction of what little remains of our equivalent of a social contract.
     The result is an unfair, inequitable system that makes the poor pay for the greed of the rich. As we warned in November 2010, “this is an unprecedented transfer of wealth from working people, family farmers, small businesses, the self-employed, the sick, the old and children to corporate finance-capital.”
     We could safely issue the same warning again today, as establishment economists start to flee from the consequences of their own analyses. Richard Tol of the ESRI forecast ten more years of austerity as he left for the University of Sussex: ten more years of taxation, cut-backs, privatisation, flogging off anything that moves to venture capitalists, asset-strippers, and the great white chiefs of global finance.
     As communists, we reject this policy of austerity. Austerity is a response forced on us, via a capitulationist government, by the organs of international finance. This is in order to pay their debt.
     This debt is the key. We say, Repudiate it!
     Only then can we be free from the anchor that is dragging us down to total economic destruction and the task of building a real economy for the common good can begin!

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