Government seeks to tax PUP while super-rich make a killing

By Oisín Kelly

The government extracting income tax from Pandemic Unemployment Payments (PUP) stands in great contrast to its approach to the enormous wealth concentrated in the hands of the multi-millionaires and billionaires.

The pandemic has exposed massive inequalities that exist in Ireland and globally. While workers have faced extended periods of unemployment due to lockdown measures, the super-rich have seen their wealth rocket.

Weak government

In the past week Revenue sent letters to many who received the PUP seeking the payment of income tax. Aware of the political damage this could cause it, the Fine Gael / Fianna Fáil / Green government now intend on spreading this liability across four years and without any interest applied. They are nervous about the deep anger there is for them since the ‘Golfgate’ scandal and their role in creating the latest wave of the virus.

In the early stages of the pandemic, the PUP was introduced when all non-essential work quickly ceased. At its peak, there were approximately 600,000 workers on the PUP. Those working in hospitality, tourism and accommodation have been particularly hard hit by the restrictions and many have been reliant on the PUP throughout 2020 and into this year.

Workers face hardship…

The PUP was initially set at the social protection standard payment of €203 per week. However it was quickly raised to €350 in what was an admission that the €203 rate was not enough for people to live on (the disabled, pensioners and jobseekers continue to receive this low sum). The figures of €350 per week is below the average wage and this was a great financial hardship on workers and families. This sum does not go far when mortgages and rents have to be paid as before.

The Covid-19 pandemic has economically impoverished hundreds of thousands of workers in Ireland. Globally half a billion were pushed into poverty and 400 million jobs were lost, according to the International Labour Organisation (ILO). This is in great contrast to the spectacular growth in wealth that took place at the same time.

…Billionaires don’t

Ireland’s richest saw their wealth rise 7.3% in 2020; the top 300 richest now have €93.7billion in personal wealth (i.e. not company wealth, but personal wealth).  Computer billionaires Patrick and John Collision saw a spectacular rise of 55% in their personal wealth to €2.75 billion. Larry Goodman and family saw a rise of €760m in their personal wealth to €3.21bn. Fellow “tax exile” Denis O’Brien has managed to amass an obscene €11.82 billion, making him one of the richest billionaires in the state, that’s when he chooses to reside here.

This is seen on a global level too. Between just April and July billionaires’ wealth rose 27.5%. Today billionaires have US$10.2 trillion in combined personal wealth. From March to May in 2020 the top 25 richest people saw their wealth rise US$255 billion.

Company profits are also up during the pandemic. Thirty-two of the world’s largest companies have seen profits rise US$109 billion.

Invest in jobs

Workers create these profits, yet we see this wealth hoarded at a time of great need. The Irish government are doing nothing to use the profits and wealth that exist to alleviate the financial pressures of hundreds of thousands of workers in Ireland.

Rather than pursue workers for relatively small income tax liabilities. The tax on the PUP should be waived; with the wealth of billionaires being used to guarantee workers’ incomes and to fund a major programme of public investment in education, health services, transport and green energy.

We need to build a new movement of the working class that will fight for such a programme, and to break with this rigged system of capitalism.