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July 08, 2010



An excellent article - as usual.In the debate on how to rescue Ireland from tha situation we are in or how to keep digging a bigger hole to bury the country, it seems to me that the diggers are masters of the snappy phrase which gets to the point quickly. This tends to win the argument as it suits the media. Progressives need short phrases that get the message accross quickly. In this regard yours that "people and their living standards are not an obstacle to economic growth, they are the solution" is perfect. Well done!

Gerard O'Neill

It's not a bad idea, for CORI. It even has the advantage of reducing the disincentive effects experienced by people leaving social welfare to take up jobs who then face absurdly high marginal tax rates and little (or negative) changes to their incomes.

But the bit about about rich people spending more on imports than poor people? Come on Michael: all those TVs and cars folks like to watch and drive - I wasn't aware of any indigenous manufacturers here in Ireland...

Let's just let folks - richer or poorer - spend the money they earn they way they see fit rather than getting lost in 'ourselves alone' rabbit holes. And sure, treat incomes, whatever their source, fairly and equitably.

Michael Taft

Thanks for that, SAM. Its frustrating that the debate is so one-sided. There are few mainstream outlets that are concerned with hosting a debate where a number of viewpoints can be aired, to the betterment of the debate. All one can do is keep at it. When things don't turn out as anticipated, hopefully there will be a turning towards alternative perspectives.

Gerard - far be it from me to prevent Montgomery Burns from buying another ivory backscratcher (well, actually, I would - the sale of ivory products should be criminalised); but you get my point. All I was doing was pointing out one of many benefits that arise out of redistributionist policies. One could produce a lengthy list, espcially considering the benefits arising from greater income equality. Don't take my word for it - have a wander through this excellent site - the Equality Trust

Indeed, if we pursue enough egalitarian poliicies we might even close that ol' marginal propensity to import gap: plasma TVs for everyone!


Let's just let folks - richer or poorer - spend the money they earn they way they see fit rather than getting lost in 'ourselves alone' rabbit holes. And sure, treat incomes, whatever their source, fairly and equitably.

By and large I'm in favour of that Gerard. But I'm also increasingly concerned with the continuing rise of winner-takes-all tournament style wage schemes that funnel all of the economies productivity gains into the hands of senior management. If senior managers insist on continuing to do this, the state should play some role in democratising those gains.

Median household incomes in the USA have barely budged since the mid-1980's.

If that trend is replicated in Ireland (I presume real household incomes did rise for everyone during the boom?) then surely combining high marginal tax rates with generous tax credits (including the Milton Friedman-like Negative Tax Rate proposed above) is a good solution to that problem?

If we are to implement this, why not scrap the lower marginal rate (which would offer everyone the same tax breaks at the same tax rate), scrap all 'ceilings' and perhaps even increase the top rate and tax credits?


I did a quick search and couldn't find either 'hours' or 'pro-rata'.

This would be offered on a pro-rata basis? Or at least on the basis that an equivalent amount wasn't extracted in dole payments?

Michael Taft

Mack - I hope to be some work in the next couple of weeks on household income growth, to assess where the money went.

What do you mean by hours or pro-rata? SJI's proposal deals with personal and PAYE tax credits only, those earning more than €4,000 and less than €15,600, and had 40 insurable weeks in the year. Also, they must be over 22 years.


Michael -

What I mean is people working a day or two a year just to take advantage, probably shouldn't get their tax credits refunded. Especially if they've also recieved benefits.

I don't see why they should have to be over 22. If an 18 year old has worked enough hours but isn't earning enough to use all the tax credits then they should get a refund too.

It's most likely going to benefit married couples most - where one is in full-time employment (so tax credits are higher - perhaps double - if the other does some work).


By the way, I did a quick & very basic outline of what an high flat tax, high tax credit, negative income tax system could look like here..

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