Friday, November 03, 2006

Cherishing all of the companies of the nation equally

When the history of the 3rd millenium is finally recorded, will the Irish Republic be accorded its proper due as a leader of that political movement which converted societies into economies?

The traditional adage is that you judge a society by how it treats it’s weakest members, but you won’t hear any of that outdated old guff from our elected leaders. Instead you’ll hear about GDP/GNP growth, levels of employment, inward investment, current rates of interest, inflation, taxation etc etc..

For his latest general election marketing campaign, Taoiseach Bertie Ahern has decided that the rights of children should be more firmly enshrined in the constitution. The often mis-understood phrase in the 1916 proclamation springs to mind - “cherishing all of the children of the nation equally”.

The success of the Irish economy is largely attributable to the fact that we have become a tax haven for corporate enterprise. The Irish Corporation Tax rate of 12.5% compares with standard rates of 30%-40% which apply to companies in all our major EU partners, the USA, Japan, China, Australia etc etc.

However, Ireland is also the only one of those countries where the standard rate of Personal Tax (20%) is higher, and materially so, than that paid by companies. And remember, for ordinary citizens, tax rates are applied to gross income before deduction of normal living expenses whereas companies are taxed on after-expense income i.e. on their profits.

So any redrafting of our constitution should logically recognise the pre-eminence of the corporate entity rather than the citizen and the principles of any new constitution should reflect that new and more relevant aspiration of “cherishing all of the companies of the nation equally”, reflecting the new reality of the country we seem to be living in.

No-one in their right mind would wish a return to the days of the one-way mailboat ticket, but surely some of our politicians can articulate a vision of what the economy can do for our society, rather than the other way around?

Footnote: Published as a letter in the Irish Examiner.

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