In an open letter to the Minister for Finance, Dermot Bolger makes his argument for retaining the artists' tax exemption
Dear Brian Cowen,
In the scale of things it should not be a balding middle-aged novelist addressing this open letter, but a superstar such as Bono or Van Morrison - respectively possessing the eloquence or glare to impress you - as you make a decision of seemingly far greater financial importance for such folk than for lesser-known writers and artists like me.
Of course that tiny cluster of deservedly rich artists may have already made private submissions. My reasons for doing so publicly is that, although my earnings are pigmy-esque in comparison, the human consequences of your decision will be far greater for hundreds like me who just about manage to support our families in Ireland - and who each in our own way reflect aspects of Ireland to the outside world - by availing of the 1969 Tax Act on part of our income.
Arminta Wallace recently noted in The Irish Times that: "Many artists are reluctant to discuss their personal finances in public. Others are uncomfortable about taking a principled stand on an issue from which they, personally, will benefit." When asked once what embarrassed him most, the late Phil Lynott replied, "taking off my trousers before strange women". Publicly discussing your personal finances is like taking off your trousers before the entire nation.
Based on 2001 figures, more than half (694) the writers and artists availing of the scheme earned less than €10,000 a year in exempt income. Another third (456 artists, including myself) earned between €10,000 and €50,000. As someone from the second group, I have a profile (in Ireland at least) as author of nine novels and 10 plays. My work has been published in French, German, Swedish, Dutch, Japanese, Serbian, Italian, Greek, Portuguese and Czech, and received awards, here and abroad. If this suggests a glamorous working life, the reality is more mundane.
I live in a small terraced corporation-built house, which I managed to buy in the 1980s. My "office" is a corner of my son's bedroom, although All Hallows College generously provide a small room at present to write in. Like half of Ireland, I aspire to a larger house with my own writing room. So far, that remains an aspiration because it is difficult bidding against people on secure incomes who know what they expect to earn every year. I know my income for the next seven months. Beyond that, like with most writers, it's a blank I need to fill in with the thin sliver of my imagination.
In 2001, 28 people earned between €500,000 and, in one case, a staggering €10,000,000. Their problems of millionaires will never be mine and if some lose their exemption I won't lose much sleep. However, as John O'Donoghue points out, you won't gain much money. Almost 64 per cent of the extra millions in potential taxation that might be raised if this scheme was abolished would come from these 28 super-earners. The problem is that there is little chance of this money reaching the Irish exchequer. These 28 artists would appear liable for almost twice as much taxation on non-exempt income as the other 1,295 claimants claim in exemption. While abolishing the exemption would yield more taxation from us, our increased contribution could never replace the existing taxes presumably lost to the exchequer if most high earners left.
Your cabinet colleague, John O'Donoghue, said as much: "terminating or even capping the scheme is more likely to result in high earners legally leaving the jurisdiction or structuring their earnings in a way that avoids or greatly reduces any tax liability than in any revenue windfall for the exchequer."
I see no merit in making a case for retaining this exemption because its abolition will cost the exchequer revenue. The exemption is either a good thing or bad thing. In my case it allows me some small safety net in buying time to write plays that, by deliberately focusing on locations like Ballymun, have little chance of economic success beyond Ireland. However, because play royalties are tax exempt (unlike journalism) it buys me more time to write directly for the people my plays are about, without diluting their story to make it more palatable abroad.
Except for a few who enjoy commercial success, a writer's life revolves around transactions designed to literally "buy time" to write. Inspiration is fine but time is a precious commodity for a writer with a family.
I began as a factory worker and know how privileged I am to make a living doing what I love. I am better off than huge numbers bypassed by the Celtic Tiger. However, I also know that, as a writer, I can almost certainly never afford to be sick nor ever retire. Hopefully, I won't wind up like Francis Stuart, who fell asleep during his last public appearance in his 90s, but that may depend on whether I'm still alive and need the fee.
This exemption gives people a chance to take a chance on writing, painting or composing. But what does art give Ireland? Watching my books and plays make tiny journeys across Europe, I sometimes feel Irish writers play a small but critical role in explaining Ireland to our new neighbours.
In High Germany recently appeared in Czech (exempt royalty $500, less deductions by various agents). Parts of Belgrade were transformed into a giant outdoor version of a Dublin hotel to mark the Serbian publication of the collaborative novel Ladies Night at Finbar's Hotel (exempt royalty $500 divided by seven women and a balding man).
Last year Hungarian students staged my play, The Passion of Jerome - no fee charged because they could not afford one. My fee for introducing the first Slovenian anthology of Irish writing was a bottle of Slovenian juniper brandy. A French language revival of my play, April Bright, was declared an Irish-Kurdish friendship night in a working class Paris suburb, with the Irish ambassador and myself besieged by Kurds dancing to a middle-eastern Lambeg drum.
If the work of a relatively unknown writer such as myself creates such small links, imagine the far greater impact of major Irish writers such as Seamus Heaney and Roddy Doyle. Irish books, films and music are among the few things many new European nations know about us. It would be hard to financially justify the time invested in such collaborations. But the safety net of tax exemption allows me to set aside time to work with translators keen to bridge cultures, without having to always focus on commercial success.
Moreover, writers pay tax. I will pay tax on this and other articles written to keep my family afloat. I pay tax on workshops and teaching. I will pay PRSI on all income. The only income tax-free is direct royalties from works created from my imagination. Virtually all such exempt income is in foreign currencies generated outside Ireland and spent here. I hardly tip any balance of payments but an amount of foreign currency circulates in the Irish economy every year without any outlay of raw materials beyond my brain cells.
In economic terms, it may be hard to justify why I pay no tax on certain royalties, while all of us pay tax on incomes generated in other ways. But it is similarly impossible to economically justify the time spent writing a play or a poem.
Similarly, I don't know how you economically quantify the PR effect of the artists gathered here to what executives called "Brand Ireland". But Ireland's worldwide perception as a nation where creativity is cherished has helped us to punch beyond our numerical weight. When the IDA sought out major corporations to locate in Dublin, such corporate decisions were taken for hard economic reasons.
But somewhere in that bargaining - it would only be a small card but occasionally may have helped to win the pot - was the fact that some executives felt their families would be happy to resettle in Ireland because of our image projected by the Chieftains, U2 and others: the perhaps illusory belief that you might rub shoulders in pubs with rockstars and writers and that if this hotbed of creativity could produce Bono and Bob Geldof and Roddy Doyle, it might also produce an intelligent, literate young workforce capable of thinking outside the box.
People mention putting a cap on it, but what size cap? Tax allowances work best for people with definite incomes. My most recent novel was published five months ago but commissioned and paid for five years ago. It was meant to take 18 months to write but took four years because I wanted to get it right. This delay had serious financial consequences but the exemption meant an advance could be stretched over the years - supplemented by dozens of other activities - because it was not taxed as a lump sum in one year.
My income is erratic. Plumbers or other self-employed people similarly lack security, but everyone needs a plumber sometime, whereas poets are expendable. Fashions change. You can't always rely on someone having a leaky metaphor that needs fixing. Also, local committees never expect plumbers to make 300-mile round trips, then look happy to be offered €100 in payment.
The exemption has not made me rich, though one day I hope not to work from a corner of a child's bedroom. What it does allow me is the confidence to continue to try and support my family doing what I do, hoping that if my ship finally comes in during one good year then I will be able to hold onto sufficient money made that year to keep us going during fallow years when I am sick or my imagination fails.
If the exemption goes I'll obviously continue to write novels - they would just take far longer to complete and be less plentiful. Some critics might argue that this would be a good thing, and I stake no claim to my work having any particular cultural importance, or indeed that anything except a tiny fraction of the works nurtured under this act will live on to be read by future generations. The chaff count is always high in any era of writing; however, if the working conditions created by this exemption did nothing beyond producing a dozen books of the stature of Sebastian Barry's It's a Long Long Way or John McGahern's Amongst Women then I suspect that future generations will consider it well worth the price.
The exemption allows me to balance out the extremes between the good and bad times and risk embarking on long journeys into the imagination that can last several years. During this period a writer can only hope that there will be readers at the end willing to share their landfall and also hope that if they succeed (even by tearing up several years' work to begin again) then in a small way, they may have left behind an imperfect but emotionally honest record of what it was like to be an Irish citizen at this time.
Yours sincerely,
Dermot Bolger
