Ireland’s high cost of living and poor services deepen inequality

‘Cherishing all Equally’, a new report by the independent think-tank, TASC, has revealed yawning gaps in income distribution in Ireland.

Drawing on Revenue data and other sources it found that:

• The top 10% of the population have over a third of gross income (averaging €130,400 per tax case);
• The bottom 90% share two-thirds of gross income, averaging €27,400 per tax case;
• The top 1% has 9% of gross income, averaging €373,300 per tax case.

TASC’s report, which will be published annually, found that ‘gross income inequality’ in Ireland is the highest in the EU. After taxes and social protection, net income inequality is close to the EU28 average.  But, Ireland’s cost of living is also 20% higher than the EU average, which means that Irish incomes have significantly less purchasing power. 

A high cost of living makes the economy more unequal. It requires people to pay for many services, like GP visits, that might be free-of-charge or subsidised in other countries. This worsens economic inequality.

Research by Social Justice Ireland found that at 28.9% of GDP, Ireland’s tax-take was almost  seven percentage points below the European average in 2011, and significantly below the total tax take of  47.7% of GDP for Denmark, and 44.3% for Sweden. Social Justice Ireland supports TASC’s analysis that at low overall levels of tax Ireland cannot provide the quality of services that are “enjoyed and expected” in many European countries.

Also, despite a 16% fall in the poverty line between 2008 and 2013 to €10,425, both the proportion of Ireland’s population below this line and the number of people has increased, according to recent CSO data. You cannot have a superior level of public services without sufficient tax revenues.  People must make choices about the type of future they want.

The full TASC report may be accessed here.