Taxation and the national debt

The following article is taken from the May/June issue of the Civil and Public Services Union journal and is written by one of its delegates to the ICTU congress held in Belfast. It shows that only an anti-imperialist answer is adaquate to facing up to the problem of the national debt and. provides an example of how links must be made between the economic exploitation of imperialism in the South and the political struggle against it in the North.

TAXATION AND THE

NATIONAL DEBT

It is a popular belief that mean farmers, solicitors and crafty accountants are the only forces preventing a more ‘equitable taxation system from being introduced. This, however, is more than a little inaccurate. The: main obstacle to a fairer tax system is the outflow of multinational profits and repayments on the national debt.

To understand how this came about we must go back in history to the founding of the State. The lack of any native heavy industry in Ireland is due to the refusal of the banks to invest at home. They were the major source of capital in the South and invested their funds in London. Therefore the only way that the Irish economy could have been developed in the interests of the Irish people would have been for the Government to regulate the outflow of capital -by the banks. No Government (not even the Fianna Fail governments of the 1930s who were elected on a radical programme of confronting big business and the ranchers) was prepared to take this step, afraid of the social forces it might stir up and the belt of a crozier that might result. The only way capital could be acquired from outside of Ireland was through the opening up of the economy by ending the protection that native Irish industry enjoyed.

It was only under these strict conditions that the World Bank was prepared to give loans necessary to build the infrastructure that would attract multi-national companies. Thus, the Industrial Development Authority was set up and it brought in the multi-nationals on the basis of low wages, capital grants of 35%—-60%, subsidised training and tax free profits. As a result of the opening up of the economy the traditional Irish industries — shoemaking, flour milling and clothing went to the wall. However, the multi-nationals ‘themselves were external to the Irish economy and their profits were withdrawn instead of being re-invested. Indeed many of the multi-national companies set up assembly kit factories, with components being imported from several other countries, assembled in Ireland and then re-exported to take advantage of favourable tax laws. All of this resulted in a situation where the base of taxation was moved almost totally to the working class. In 1985 the official! figures for the outflow of funds from the State were: Profits sent abroad IR£1,335,000,000 Interest on State foreign debt IR£8 10,000,000 Other interest paid abroad IR£609,000,000 Gross outflow IR£2,754,000,000 | age 11 Therefore 27/, billion pounds left the State last year to feather the nests of multi-national bankers and businessment. But this is not all, the principal repayments are calculated separately? and in 1985 they amounted to: IR£1,398,000,000. So we come to a final figure of IR£4,152,000,000, which left Ireland and headed into th blue yonder. : This money would have built many hospital and schools, it could have helped to ease the misery and.

‘ poverty experienced by the one million people who are officially below the poverty line.

As can be seen from the figures I quoted above. the _ entire take from PAYE taxation goes to service the national debt. The choice facing the working class is either to say no to the national debt or face total destruction of social services. What is required is a government which will renegotiate the national debt, tax the multi-national companies, strictly regulate the flow of capital abroad and tax the Irish rich. Using the money resulting from this the Government could develop social services and a national plan for the agricultural sector and the building of Irish heavy industry. . But neither Irish capitalism nor British capitalism would stand idly by while this was going on. Then some people might get a shock when they discovered the true nature of the presence of British armed forces in, the occupied Six Counties. Because the only Government capable of carrying out such a plan would be a Socialist Government. I fully realise the outcome of the next election will not result in such a government but it is what is needed. No capitalist party is going to implement policies which as a whole favour the ordinary workers and small farmers of Ireland.

The Irish Congress of Trade Unions carry a heavy, responsibility in this area. It is up to the ICTU to open up a debate in the Trade Union movement on the political needs of the working class and to call a conference open to all sections of the Labour and Trade Union movement to plan the way forward.

PAT CORCORAN

PUBLIC SERVICES ‘STAFF

[cs] ANNUAL CONFERENCE