Elephants and where to find them

As we face into the weekend, public servants’ terms and conditions have spent another week under the spotlight. Allowances, increments, sick leave and whatever you’re having yourself. We know too that the weekend analysis will give all of these issues another airing. Some of this analysis might even feature the phrase ‘the elephant in the room’, as we’re so often told that public sector pay and conditions are that proverbial elephant.

That is to say, an important and obvious topic, which everyone present is aware of, but which isn’t discussed, as such discussion is considered to be uncomfortable.

But given the level of scrutiny and analysis afforded to public sector terms and conditions (and the level of opprobrium and shrieks of hysteria that analysis nearly always includes) one can only assume that the employment of this metaphor is entirely misplaced.

In the Dáil this week, a genuine elephant was identified, named, tagged and briefly put on display on the floor of the house. The elephant in question concerned taxing higher earnings. Unfortunately, undeclared VAT and disclosures about settlements with the Revenue Commissioners meant that the elephant was deemed an unreliable specimen, and it was shooed out of the room while nobody was looking.

Nevertheless, the figures for those earning over €100,000 per annum do throw up an opportunity to have a meaningful discussion about taxation of higher earnings. In 2011, the number of people working in the state on incomes above this level was 111,055. Of this number, approximately 6,700 work in the public sector.

Much has been recently made of how much revenue the state might yield by stopping increments or revisiting Croke Park so that high earners in the public sector might be made to contribute more.

Indeed these workers could be made to contribute more. But it could be achieved far more equitably and substantially by using taxation to achieve the same result. And in so doing, we would see a much greater contribution from the other 104,355 high earners.

“NO” will be the predictable refrain from the same chorus of critics who will declare that these high earners do not enjoy the same level of ‘perks’ and security than those working in the public sector. And on this basis they will argue that high earners should not be touched. And pretty quickly the debate will resume its focus on public sector pay and conditions.

But the elephant will still be in the room.

In France, meanwhile, the new President proceeds to honour his commitment that the wealthy will make sacrifices. A new budget will see the lowering France’s wealth tax threshold and a once-off levy for those with a net wealth of more than €1.3 million. Plans are also being made to double the financial transactions tax, and introduce a programme of far-reaching tax reforms, including a 75% tax on income above €1 million. He’s also tightening up on inheritance tax, putting higher taxes on banks, petrol companies and dividends and increasing employer social contributions.

The residency ofelephants dans le chambrewill not be tolerated.