The Irish Times published a special feature this weekend on public knowledge of economic, political and social life. ‘We have a lot to learn’, claimed the paper.
The report was based on an MRBI poll, in which members of the public were asked questions on various issues of public concern. These included income tax, public spending, health, and demographics.
The implications were alarming. ‘Public opinion is one thing, facts are another‘, read the headline of the lead article by Stephen Collins. ‘Faulty vision‘ was the headline of the editorial. ‘Our dystopian view of Ireland’, was the headline of the analysis provided by psychologist Maureen Gaffney, which was featured on the front page of the review supplement.
For political editor Stephen Collins the poll results -on account of the misperceptions they revealed- presented a worrying vista:
‘The belief that politicians are getting such an enormous slice of the Exchequer funds indicates that our faith in democracy could be fragile.’
Moreover, he did not hold back from suggesting there ought to be a degree of auto-critique at the Irish Times itself:
The media also has serious questions to answer about why people are so wildly misinformed about basic facts. The whole range of media outlets, including public-service broadcasting and, yes, quality newspapers, needs to examine its conscience about how it reports on the issues of the day.
A good starting point for a prise de conscience would be the poll itself: its method and its presentation give a great deal of insight into why people might become wildly misinformed.
This next few days, time permitting, I’m going to do a series of posts that look at this feature, and consider what it says about how people in Ireland understand issues of public concern, and what this means.
Today I’m going to look at the matter of tax.
Tax Holiday in Dystopia
The Irish Times editor, Kevin O’Sullivan, in introducing the report, said that a purpose of the poll was ‘to gauge the electorate’s awareness of how taxes are spent.’ Stephen Collins in his overview, identified ‘very mistaken impressions‘ on questions about ‘taxation and fairness‘.
Maureen Gaffney
Maureen Gaffney, who provides a psychological explanation for the common misperceptions that the survey apparently reveals, says the following:
‘we believe that the top 10 per cent of earners, who feature regularly in political debates, earn an average salary of €153,000 – double what they actually earn – and that they pay only 28 per cent of the total income-tax intake when in reality they pay more than double that: 59 per cent.’
This belief was a key element in the ‘dystopian view’ that ‘we’ have of Ireland.
There are two questions that explicitly mention tax: the first two listed in the report. They are:
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What income does a person have to earn before tax, per year, to be in the top 10% of income earners in Ireland? Please note that income includes earnings, pensions, investments and welfare benefits.
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What percentage of the total income tax intake do you think is paid to the Revenue by the top 10 per cent of income earners in Ireland?
You just haven’t earned it yet, baby
Our perception of phenomena is shaped by the words used to name and describe those phenomena. If we describe someone as ‘wheelchair-bound’, we suggest they are unable to act autonomously due to some kind of invisible tether, as if what defined them was their unwilling relation to a wheelchair. Most people wouldn’t describe a car driver as ‘BMW 6 Series-bound’.
The same applies to the economic and social facts of Irish life.
In both these questions, those who rank in the top 10% of the population, in terms of income received are named as ‘income earners’. The verb ‘to earn’ carries with it a moral connotation that operates beyond the icy cold logic of cash transactions.
For instance, in the Good News translation of Proverbs in the Bible, we find ‘It is better to have a little, honestly earned, than to have a large income, dishonestly gained.’ (Proverbs 16:8). In You’ve Got To Earn It, by The Staples Singers, the object to be earned is love ‘Throw hate right out of your heart….If you wanna be loved…you’ve got to earn it’.
Earning has a history as a reciprocal activity that goes beyond money. A footballer might, for example, earn the respect of a club’s fans by turning down a big money contract. ‘Earning’ carries a moral seal of approval with it into the world of exchange value. In the case of the ‘top 10% of income earners’, we are faced not only with the image of a ranking based on quantity, but also the image of a moral hierarchy: if people get more money, it’s because they earned it more. They’re worth it. Whereas….
I don’t know if the people who put together the survey deliberately chose ‘income earner’ as opposed to ‘income recipient’, or some other description that tended away from moral judgment. My guess is that they did it unwittingly, in an example of what Pierre Bourdieu calls ‘a symbolic coup de force’: ‘struck in all innocence, and all the more effective for being unconscious’.
What’s interesting is the way this scientific category then starts to take the shape of a social constituency. Maureen Gaffney talks about ‘the top 10 per cent of earners, who feature regularly in political debates’.
Do they? Undoubtedly there is some discussion of people on higher incomes being required to pay more tax. But the specific category of ‘the top 10 per cent of earners’ -the cream of the moral hierarchy- doesn’t sound all that regular or familiar to me.
A horse with no name
‘You can take a horse to water but not make it drink.’, says the Irish Times leader writer in ‘Faulty vision’, referring to the ‘significant element‘ of ‘wilful ignorance‘ in Irish society when it comes to policy detail. We might pause to wonder here how the mental image of a beast of burden shapes our perception of the public at large, that 90 per cent who fall outside the category of ‘top earners’ identified by the Irish Times.
When it comes to the payment of tax, said ‘top earners’ can only appear, within the frame of reference of the Irish Times feature, as the stoic, self-abnegating saviours of an ungrateful and uncouth populace. They are, after all, only 10% of the population – but they’re paying 59% of the tax! And they’re not earning half as much as what people think!
That is the image presented by the Irish Times. The truth, though, is a wee bit different.
Fairness and progressivity
Before I go any further, it’s worth pointing out that the survey questions contain no reference to ‘fairness’ or justice at all, even though Stephen Collins says there are ‘mistaken impressions’ about questions about fairness. To read a concern with ‘fairness’ into the poll results, as Collins does, is to undermine the very appearance of scientific ratification that the feature seeks. The only conceivable way the questions might be interpreted as having to do with fairness is by considering progressivity in a tax regime as the same thing as fairness in a society where a particular tax regime applies.
To be fair (aargh), this is precisely the sort of thing that the Department of Finance gets up to as well, but this doesn’t change the fact that this is another false perception encouraged by a feature intended to cast light on false perceptions.
I’m going to assume that the precise claim made in the article -that the total income tax intake from the top 10 per cent of income ‘earners’ in Ireland is 59% of the overall income tax take- is accurate.
But to use the figure in this way -without any reference to any other form of taxation and presenting income tax as indicative of ‘fairness’ in the tax regime on the whole- is to generate an even more egregious false perception than suggesting that progressivity equates to fairness. What is more, the public reading the article are not told precisely how much of the income the top ‘earners’ actually get.
You see, there’s this thing called indirect taxation. It makes up 40 percent of tax revenue. And if you want to give any kind of honest account of ‘fairness’ as it relates to Irish society, you’d better talk about the impact of indirect taxation too. Luckily, someone has done just that. On today’s Unite’s Notes On The Front, Michael Taft uses a recent study by the Nevin Economic Research Institute to show that ‘that, contrary to the received wisdom, the poorest 10 percent income group pays as much tax as the top 10 percent tax and that our tax system is far less progressive than some have claimed.’
Here’s his graph showing how much taxation is paid out of the gross income of each decile.
And here’s his graph showing the impact of indirect taxation by decile.
And here’s his graph comparing the amount of tax paid by each decile to the proportion of overall income they receive.
So in informing the public about what the public thinks about tax, the Irish Times has made it seem as though indirect tax doesn’t even exist, despite the disproportionate impact it has on the people with the lowest incomes. In doing so it has created an image of a heroic and stoic higher echelon who deserve to be spared any further State harrassment from the obsessed and deluded horde. I’ll leave this for now, but let me just point out that rich people have very good reason to favour a shift in the overall tax model of a country away from tax on income and towards indirect taxation. Below is an screenshot from the Knight Frank Wealth Report 2011 online, written with the concerns of high-net-worth individuals (HNWIs) in mind. A HNWI is defined by Knight Frank as a ‘person whose investible assets, excluding their principal residence, total between $1m and $10m’
Thus the absence of any reference to indirect tax, and the resultant perception that people at the top may be already paying enough, just happen to suit the priorities of the filthy rich. Now why would the Irish Times go and do a thing like that?
TOMORROW (or maybe WEDNESDAY): Citizens, voters, electorates, democracy.
Cunning Hired Knaves 