The less well-off pay for the tax incentives to make the rich richer

DO you ever wonder who really governs Ireland? Or in whose interest the country is governed? I know we all go to sleep at night thanking God that Bertie and the lads are in charge.

They might be a terrible shower of incompetents, but they're ours.

We put them there, and we can get rid of them. That's democracy, right? And then every now and again something stops you with a bang.

We never voted to arrange things so that the poorest would have their welfare cut and the richest would have no tax liability at all, did we? How did that happen? It's just one example of the reality we all need to recognise.

There are powerful vested interests out there. They're in business, in the media and in all sorts of hidden places. They arrange things to their own advantage and they launch powerful attacks on anyone who gets in the way.

Let me give you a few examples.

Last week, Labour's Joan Burton revealed that there are quite a few very rich people who have little or no tax liability, including 11 millionaires. I heard Fiona O'Malley suggesting on The Week in Politics on RTÉ that they were probably rock stars - even though the only thing about rock music that is exempt from tax is the royalty income from song-writing. The truth, of course, is that these people are exempt from tax because the system has created tax shelters for them.

According to the most recent study of the tax breaks available to the rich, published by the Revenue Commissioners and soon to be updated, it costs €68 million a year in tax breaks to keep the tax liabilities of the super-rich at a minimum. And most of those tax breaks are to be got from investing in risk-free bricks-and-mortar projects, like car parks and student hostels.

Of course, the minute Joan Burton made the information public, so-called "tax specialists" and "tax advisers" are wheeled out to accuse her of opportunism. These "experts" (who make substantial fees from advising clients on how to take the maximum advantage from the various tax breaks created for them), are quoted in one of the Sunday newspapers saying "most of the schemes that allowed individuals to minimise their taxes would be ending within two years... The incentives were introduced to help stimulate the economy. They have served their purpose and they will be going within two years".

Stimulate the economy? By investing in car parks? Who do they think they're kidding? And what they don't tell us is that while some of these schemes will expire in the next couple of years, already new ones have been created to keep the rich as far from the taxman as they can get.

Investment in sports clinics, or luxury private hospitals, for instance, will potentially cost the country far more than the tax breaks we've already had.

Tax breaks, of course, are only one of the ways you can keep your taxes low. What about investing in the highly lucrative and totally tax-free bloodstock breeding industry? Or owning a few quality racehorses, and picking up your share of the nearly e50m in tax-free prizes we hand out every year?

I got some stick for writing about that subject a few weeks ago - letters and articles accusing me of begrudgery and hostility to a valuable industry. It ain't so - I'm not hostile to the horse and greyhound industries, and I fully appreciate their importance. But consider this. The only form of betting that is taxed is the betting that goes on in bookies' shops, and it is almost exclusively working men that pay that tax.

The major beneficiaries of the revenue generated are the rich. The way the whole thing has been constructed is a massive transfer from lower-income to higher-income people.

LET me give you another example. A week or so ago the Ombudsman, Emily O'Reilly, suggested that it was about time that her remit was extended to cover legal and medical issues. Long past time, in fact. In a speech on the 20th anniversary of the founding of her office, she referred to promises made by Government dating back to 1997 that the remit would be expanded to cover precisely these areas.

"Seven years later, I'm afraid those proposals are still in the pipeline and, while I appreciate the many pressing legislative demands on the Government, I think that this anniversary year would be an appropriate time to expedite those relating to the office of the Ombudsman," she said.

Within seconds, spokespeople for the medical and legal professions shot the proposals down out of hand. The hospital consultants said that while they would have no difficulty with the Ombudsman dealing with administrative matters with the voluntary hospitals, "medical disputes would require a certain level of expertise".

The Law Society said that an ombudsman already existed in the form of the society's independent adjudicator. The adjudicator operated "the most sophisticated, efficient and transparent system in Ireland," a spokesman added.

Don't you just love arguments like these? We can't let Emily O'Reilly pass judgement on whether a citizen has been badly treated at the hands of a doctor because she doesn't have the expertise.

As Homer Simpson would say, d'oh!

The Ombudsman's office would have to hire in the expertise, wouldn't they? And isn't that what the consultants are really afraid of - that independent experts might actually take sides against them from time to time.

And as for the lawyers. Try taking them on some time without the help of someone powerful like Emily O'Reilly. If you feel you have been unjustly treated by a lawyer, try their "sophisticated, efficient and transparent system" and see how it works. There are all sorts of structures through which complaints can be processed. Most of the structures are staffed and run by members of the legal profession. Generally speaking, the first act they take when they receive a complaint, prior to any investigation, is to refer it to the solicitor complained of.

They won't, however, investigate complaints (such as negligence) where, in their opinion, legal action is a more appropriate remedy. The Law Society won't give people legal advice or representation in handling their complaints.

In other words, like all these systems of "self-regulation", it's stacked against the citizen. Not only does it make perfect sense to give someone like Emily O'Reilly the authority to represent the interests of ordinary people against powerful people and powerful groups and interests, it's a simple matter of justice.

But I forget. We are, after all, ruled by a government that devoted a good deal of its first term to cutting away the foundations of accountability in the form of freedom of information, and spent the first half of its second term trying to foist a system of electronic voting on us that no one trusted. Who do they govern for? Whose interest do they serve? When they have to choose between the citizen and the interest group, between the rich and the poor, what way do they lean?

I think the answer to that is pretty obvious, don't you?