Is Ireland an unequal society?

Is Ireland an unequal society? And is it becoming even more unequal - as some commentators tell us?

This is a big talking point with a lively discussion of our social and economic progress since 1916 well underway in the centenary year of The Rising.

A new OECD report – The Gap between Rich and Poor - throws some light on the issue.

The key measure of inequality is the Gini index. This is a scale of 1-100 with 100 being the most unequal – i.e. where one person earns 100% of the income.

OECD countries range in equality from Denmark (25) to Mexico at the other end of the scale at around 45. Ireland ranks in the middle on just over 30.

That’s after wealth is redistributed through taxes used to fuel €27 billion in spending on social welfare, health, education and social housing every year.

Without this wealth redistribution, our Gini figure would be nearly twice as high.

So our tax and social welfare system does spread wealth around.

The OECD report shows we’re more equal than Mediterranean countries but not as much as Germany, Holland, Austria and the Scandinavian nations, which have higher taxes and big social spending programmes.

China: prosperous but now more unequal.

The report shows that some inequality is a price of progress. When China moved from outright communism to a State-run market economy, it became a much more unequal country as the gap between the poorest and richest got bigger.

But almost everyone became much better off. Over half a billion people left behind the extreme poverty of life on less than €1.15 a day. Now average wages are 20 times higher than that, though still low by European standards.

The equality debate can get a little too hung up on relative wealth. As long as everyone is a lot better off – should we get so annoyed because some people earn a lot more than others?

Equality can be a loaded word. Income disparity would be better. And at least some is needed to give an incentive to work and create wealth.

But a gap too big is unfair and undesirable. The OECD says this would reduce economic growth and create social unrest. So we should work to reduce it.

Global income disparity was falling for much of the last Century, but it started to rise again towards its end.

New technology replaced middle income workers and an explosion in finance created more well-paid bankers who enabled rich people to get richer by lending them more money.

Another issue is wealthy corporations influencing tax policy through powerful lobby groups.

An example of this in Ireland in the nineties was when developers poured money into Fianna Fail and were rewarded with property tax incentives that eventually led to the bust.

Voters are a bit more savvy now after that painful lesson and most parties in the run up to the election rightly target tax reductions at low paid workers and the most brutal and unfair form of taxation - USC.

But we’re not all that keen to redistribute wealth.

No major party is talking about any radical change to Ireland’s corporate tax regime to stop us facilitating the greatest wealth grab in history.

The biggest, richest companies in the world have used Ireland to avoid paying hundreds of billions in taxes elsewhere, enriching the rich even more.

The OECD proposes that they should instead pay tax – and fulfil their social obligations - in the countries where they make their profits.

It also calls on Governments to foster equality by making better use of wealth redistribution measures such as property tax.

Property tax targets wealth and is generally seem as socialist. Just not in Ireland.

Here even left wingers turn political somersaults to curry populist favour by condemning this form of wealth-redistribution.

Likewise, there’s pressure to reduce another wealth levy - inheritance tax.

So don’t expect any major falls in the Gini index any time soon.