Tuning intermittently into media coverage of last week's Budget, I was revisited by an old feeling of confusion about our collective perception of fiscal morality.
Each year the Budget provides an opportunity for a general venting of indignation about the choices made by the Minister for Finance and their impact on various sections of society and the economy. This year, as always, sundry interest groups, commentators and opposition politicians queued up to condemn various aspects of Mr McCreevy's package - from the phenomenon of alleged stealth taxes to the failure to do enough for taxpayers in this or that tax band. I find it interesting that such indignation is rarely presented as the anger of sectional interests, but as a righteous anger provoked by alleged breaches of absolute moral principles.
There is something odd about this. The Budget, after all, is not a moral occasion, but simply the (decreasingly significant) annual announcement of a government's fiscal and financial targets, estimates, revenues, expenditures, priorities and arrangements. A Budget can, of course, have a moral aspect, but the moral dimension of fiscal policy is much more complicated than public conversation suggests.
Another way of describing the Budget is as the occasion when the financial and fiscal rules are changed. Each year, various bars are moved up and down, and with them, indisputably, the moral logarithms of society become altered in an infinitely complex way. My point is that the conventional interpretation of these changes seems to lack a sense of any ethical, or even utilitarian, bedrock.
For example, we had a succession of budgets during the 1980s in which personal taxation rates were raised to levels that, in retrospect, seem to have been both economically counter-productive and perhaps even, yes, morally questionable. I seem to recall that such shiftings of the fiscal bars were greeted at the time with intense outrage of what appeared to be a moral complexion. Indeed, the tax regime of that time led to the unprecedented phenomenon of demonstrations on the streets by, yes, morally outraged workers objecting to high levels of taxation. But there can be no doubt either that the fiscal climate thus generated resulted in a significant element of the fraud and evasion that has recently come to light in the various inquiries into DIRT, Ansbacher et al.
And here we must surely perceive a contradiction. It is self-evident that, if the tax regime of that period was morally suspect, then much of the tax evasion arising from that era must have been morally justifiable. Yet, the public intelligence seems incapable of taking this possibility on board. Indeed, in present-day Ireland, it can seem perfectly natural for a radio phone-in discussion on the evils of the Ansbacher list to dovetail into another about the "immoral" nature of the latest fiscal adjustments. It seems not to occur to anyone that it is illogical to condemn as immoral the fiscal choices adopted by governments, and simultaneously excoriate citizens for breaching these rules.
The business lobby group ISME recently calculated that the "black" economy is costing Ireland €6 billion a year, one-third of which is unpaid taxes. But in pretty much the same breath, while lamenting that Ireland had become such an expensive and difficult place to run an enterprise that many businesses "are being forced into the shadow economy simply in order to survive", ISME called on the Government to "tackle the illegal activities of people who participate in the shadow economy". Which is it? Are the inhabitants of the shadow economy moral victims or moral villains? They surely cannot be both, at least not at the same time.
What passes for a moral paradigm in Irish public life has, it seems, come adrift of any rational or genuinely ethical underpinning, and is simply a series of kneejerk responses based on piety, envy and moralistic indignation. The result is a babble of contradictions that is neither moral nor useful.
An economist friend who has come here from a rather less prosperous country believes the ISME figures are a significant underestimate of the illegitimate economy. ISME's figures, he says, are based on GDP rather than GNP, and relate largely to the use by legitimate enterprises of illegitimate accounting methods to bypass the regulatory nightmare of Irish commercial life. To perceive the true scale of the black economy, you need to add to these figures a host of activities: drug trafficking, the illegal provision of certain services, welfare fraud and so forth. He believes that up to 20 per cent of the Irish economy may be "black". But where he differs from Irish conventional wisdom on such matters is that, for him, the real issue is not the morality of individual dereliction, but that so much of our economy is being forced into the shadow markets by "incompetent and often morally bankrupt policies of the State and the EU".