€68m bill for looking after one of our minorities — our richest 400

IS Denis O’Brien an eejit? He couldn’t be, could he? This is a man who has made hundreds of millions of pounds from spotting a major gap in the marketplace and from developing a company to plug that gap.

He's an ideas man, a fast mover, clearly very determined and focused. And very rich.

People who worked with him during the Special Olympics (and I'm one of them) also know that he is both generous and committed. He has highly-developed humanitarian instincts and isn't in any sense slow to put his money where his mouth is. Apart from his public acts of generosity, he has done a lot of good privately.

Until Judge Moriarty reports on the result of his investigations into the granting of the second mobile phone licence, Denis O'Brien will have to live with the question that is in people's minds about whether the granting of that licence was entirely above board.

Until that report is issued, of course, no one has the right to say otherwise.

In the absence of any evidence to the contrary, Denis O'Brien is 100% entitled to the presumption that he was smarter and faster than anyone else in the way he set about getting that phone licence and turning it into a highly profitable series of transactions.

(Speaking personally and as an aside, I believe there should be another detailed exhaustive enquiry and this has nothing whatever to do with Denis O'Brien into why the introduction of a second, and subsequently a third, mobile phone operator has done nothing whatever to bring about competition in that market.

We seem to have replaced a monopoly with a duopoly, whose prices and standards of service are crap to use a word beloved of Mary O'Rourke, the former minister in that area.)

But to come back to Denis O'Brien. Because he's clever and a high achiever, and all the other good things I've already said about him, why does he so often resemble someone whose mouth is in top gear while his brain is in neutral?

Last week he told the newspapers that "we are fast turning into a communist state, we are fast moving towards a communist doctrine".

That pulled me up short, I have to tell you.

Ireland a communist state a place where the proletariat ("that class in society which lives entirely from the sale of its labour and does not draw profit from any kind of capital") is free; a place where the working classes own the means of production; a place where equality is valued above all; a place where, increasingly, no dissent against the state is tolerated, no matter how peaceful it is?

Does that sound like the Ireland you recognise or is it possible that Denis O'Brien has been attending Joe Higgins' training sessions?

Denis O'Brien is a high earner. Granted, he is a high earner who has chosen not to live here for a good deal of the time, in order to minimise his tax liability. Good luck to him it might make some people happy to live in tax exile, but having seen some of the places they live, I don't envy them.

Now, communist states, and communist doctrines, don't like high earners. The more extreme communist states in the past took rich people out and shot them. All forms of communism essentially regard wealth, no matter how it is come by, as the result of theft and there to be confiscated by the people.

How do we, this "fast turning into a communist state", treat high earners like Denis? I'll tell you how we do it (and it might even encourage Denis to come home).

We draw up a list of things they can invest in and we make all those things as risk-free as possible (in fairness, mind you, Denis prefers his investments a bit risky).

When we have the list of risk-free investments ready, we turn them into tax shelters. That way, our high earners don't have to worry about paying too much tax, no matter where they live. Isn't it great and isn't it a million miles away from communism?

In case you think I'm kidding, the Revenue Commissioners have published a study of high earners. It hasn't been too widely publicised and it's hard to find (the Revenue Commissioners haven't got it on their own website, for instance).

But it makes fascinating reading.

IN summary, this is what is says: The statistics branch of the Revenue listed the top 400 earners in Ireland and established what their effective tax rates were. (Now remember, we're talking here about the 400 people in Ireland with the highest annual earnings naturally, Revenue doesn't give their names, but I'm sure we can all guess some of them.)

Fifty-one of those high earners or just over one in eight had an effective tax rate of less than 5%! Nearly a fifth of the top 400 had an effective tax rate of less than 15%.

When the Revenue examined the tax situation of the very top earners in the country the highest 117 people they discovered that 29 of them (about a quarter) had no tax liability at all, and more than half of them had a tax liability of less than 10%! How do they do it?

Well, they do it through the tax shelters we build for them. Some of them invest in multi-storey car parks (great tax write-offs, them) some in hotels and the rest in a wide variety of property-based capital allowance schemes.

All these schemes have one thing in common because the investors end up owning an asset, they are at very little risk.

And how much did we shell out to facilitate our top earners and to make sure they paid as little as possible?

The multi-storey car park scheme cost us just about €10 million, the hotels just over €12 and the other tax shelters €46m. That's a total of €68m in tax shelters, in one year, for one tiny group of people. And they're the highest earning people in the land!

It's the same as taking each of the 400 by the hand, and saying to them, "because we don't think you're rich enough, we, the taxpayers, are going to give you each a present of €170,000".

"Don't worry about us. Our sick people, our elderly and disabled people will wait. You've worked hard to get where you are, and you've earned every penny. This little present is our way of saying how much we appreciate your entrepreneurial drive, your management skill, your talent and technique.

"So what if it means you have far more than we have, and contribute far less? We don't begrudge you a penny."

Would we do that if we were a communist state? I don't think so, do you?

Maybe Denis ought to have a fresh look at our little country. We mightn't be good at some things, but we know how to look after the rich. Perhaps we ought to devise a new advertising slogan to entice some of them home.

How about "because you're worth it"?