Workers Solidarity Movement

Confirmation that a large amount of wealth remains concentrated in the hands of a tiny number of Irish people has come from an analysis of figures by Tom O’Connor, Lecturer in Economics in Cork Institute of Technology. O’Connor has analysed the figures contained in the Bank of Ireland’s ‘Wealth of the Nation’ report which stated that there were 33,000 millionaires in Ireland in 2006.  The total ‘net worth’ of these individuals (i.e. excluding the value of their principal residences and allowing for any borrowings) in 2006 was €156.21 billion.

This figure of €156.21 billion is further broken down by O’Connor’s analysis to show that they held €112.4 billion in property, €23.4 billion in equities, €4.7 billion in bonds and €15.5 billion in cash.

By using official figures to estimate what has happened in the intervening years in each of these categories of wealth, O’Connor comes to the conclusion that the current ‘net worth’ of these 33,000 individuals is as follows:-

• Property (value down by 33% as per ESRI estimates) – now worth €77.4 billion
• Equities (value down by 6% as per FT100 indices) – now worth €22 billion
• Bonds (value up approx 10% due to the indebtedness of European governments) – now worth €5.14 billion
• Cash (using a conservative estimate of a return of 1.5% AER) – now worth €16.5 billion

Thus, the figures show that these 33,000 millionaires still own wealth of €121 billion. 

Yet Brian Lenihan’s policy, as he and his colleagues prepare to savage what remains of our social services and to attack even further the living standards of the poorest in our society and of ordinary workers, is based on his analysis of last October that “There is no pot of gold that can be raided from the wealthy that can solve our difficulties”.

It’s clear from these figures however that not alone does the ‘pot of gold’ exist but €16.5 billion of it exists in cold hard cash.  This gives the lie to the argument often put forward when a wealth tax is suggested that the wealthy’s assets are ‘not liquid’ and that they wouldn’t be in a position to liquefy them to pay a wealth tax.

Not alone that but as O’Connor points out in the course of his analysis these 33,000 millionaires were the principal beneficiaries of approx €20 billion in tax reliefs since 2005.  And an analysis from Dr Michael Collins, a Trinity based Economist and member of the Commission on taxation, has shown that 110 of these tax reliefs still exist, resulting in  €11 billion per annum being lost to the exchequer, principally for the benefit of the most wealthy.

It’s clear that we are not ‘all in this together’ no matter how many times such nonsense is spewed by politicians.  The wealthy are still wealthy.  Meanwhile the discussion continues about how much should be cut from the education and health budgets, how the social welfare budget can be slashed, how people on minimum wage can be ‘brought into the tax net’…..

And the wealthy sit on their wealth.  How long are we content to let that happen?

Words: Gregor Kerr
Tom O’Connor’s original article

http://www.insideireland.ie/index.cfm/section/news/ext/tomocconnor001/