The hours and reams of commentary on today's Budget will be concerned with the minor adjustments to tax and welfare, some incremental changes to budgets for health and education, a surprise stroke here or there that will amount to nothing at all (remember decentralisation?), the macro effects of the statement, whether the Budget marginally favours the poor or the rich, and some other incidentals. One of the central points of taxation - and, therefore, of the Budget - will be ignored, entirely or almost so, writes, Vincent Browne
The initial point of taxation is to raise sufficient revenue for the State to function - for policing, security and a few other elementary purposes. The next point is to readjust the distribution of income and wealth that has been arbitrarily distributed by market forces and that, if undisturbed, would result in outcomes that almost nobody could or would condone.
All wealth and all income is derived from social interchange. It is impossible to generate any wealth or income on one's own (eg on a desert island).
It follows then that society can decide how the fruits of social interaction can be distributed and it suggests (proves?) that the idea of one "owning" the fruits of one's endeavours or creations is nonsense. An obvious and intuitive means of dividing such wealth would be to divide it equally. If we were shorn of our biases and self-interests we might agree with this obvious and intuitive division.
But it is plausible that in such a situation we might be persuaded that some inequality in the division of wealth and income would be justified if doing so enhanced the wealth of society as a whole, to the betterment of everyone, and maybe to the particular betterment of the least advantaged in a market situation.
Given that, we would probably agree to an unequal division to stimulate people to work harder, more creatively and resourcefully than they might do otherwise. But surely we would so agree only if the resultant unequal shares did not spill over destructively into other spheres, such as health, education, opportunity, housing, influence and power.
In other words we would readjust the market outcomes significantly to allow for justice and fairness in society, while leaving room for incentives. And the mechanism for readjustment is the taxation system, and that is determined annually (in the main) in the Budget.
We have allowed the market system to run riot here in the last decade or so. More than 30,000 millionaires have been created, very many of them through property development and property speculation. Some of these have made no contribution of any consequence to society, eg some (not all!) vastly overpaid lawyers, accountants, bankers, radio and television presenters and some (many?) of the property developers and all of the property speculators. That's what happens when the market runs riot, as we have allowed here.
Meanwhile vast swathes of Irish society live on incomes that most of us in the middle classes would find not just intolerable but incredible.
The CSO has published the EU Survey on Income and Living Conditions in the last few days. While there are some modest positive indicators about what is happening here, it shows that in 2006, 6.5 per cent of the population were living in consistent poverty - that is well over a quarter of a million people.
But more than that. It shows that 17 per cent of the population, about three-quarters of a million people, were living on incomes the equivalent of €202.49 per week for a single person.
The lawyers, doctors, accountants, radio and television presenters, a great many journalists, all newspaper editors, taoisigh, Ministers, Ministers of State, TDs and even Senators, as well as the masters of the universe in banks, businesses and property, may be surprised to learn that the average weekly net disposable income for all households was just €406.84 per week or €21,156 per year.
In other words, while a stratum of Irish society lives a life of relative luxury, the vast majority are fairly strapped and a significant minority live in what most of us would agree are deprived circumstances.
A classic function of the Budget is to address this entirely unjustifiable imbalance; to shift the structure of income and wealth towards a level that would be fair. And a measure of how the Budget succeeds or fails is how it readjusts this unjustifiable distribution of wealth and how it lifts people out of deprivation. An ancillary feature should be how the Budget ensures that the remaining inequalities in income and wealth do not spill over into other spheres, such as health and education, thereby making inequality endemic across society.
Instead we will have discussion on the Budget constructed into an ideological straitjacket that holds that everything would basically be fine if only there were a bit of tinkering at the edges.