Hey conservatives, heads up on this. It's a very big deal. Ireland, long-time darling of conservative anti-taxers, is in some deep fiscal trouble. Not because they've overspent, but because they've undertaxed.
Wage taxes, too, have long been much lower than in other European countries, says Fintan O'Toole, a columnist for The Irish Times and the author of Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger.
"If you were working in Ireland, well, very large numbers of people were kept out of the tax net altogether," O'Toole says. Many middle-class people paid no taxes either, he says.
But the economic collapse of the past few years — unemployment has gone from 4.5 percent to more than 13 percent — has exposed the downside of Ireland's low-tax policies, and forced it to backtrack somewhat, he says.
Gosh. Grover Norquist's wet dream, right there in Ireland. Only...it's not all good in the land.
Unfortunately, it was necessary for Ireland to raise taxes, which they did, along with draconian cuts to other government programs. What they haven't done is raise taxes on corporations. Barry O'Leary, head of the Investment Development Agency of Ireland, explains:
"We're pretty clear on the benefits it brings for Ireland," he says. "And we don't want to damage those benefits at all by increasing the tax rate. So it is not on the horizon at all."
The consequence is twofold: People don't have the money to spend on discretionary items, and they can't afford the houses corporate money built, so they remain empty.
"When people used to come to Ireland from abroad in the 1960s and 1970s, one of the sad things you'd see on the landscape was all these empty houses, and they were the sort of physical manifestation of famine in the 19th century, of mass emigration, of the kind of depopulation of whole parts of the countryside," O'Toole says.
"So it's pretty sad to create that out of disasters like famine and emigration," he continues. "It's really insane to create it out of a boom. So out of prosperity we managed to create all these empty houses, which have the same ghostly presence on the landscape as the houses from the 19th century had.
Empty houses while people bear the burden of economic downturns and corporations continue to bear less of a burden than they? This is what the Republicans, teabagger and moderate alike, live for. It's what gets Grover Norquist out of bed in the morning, this notion of letting enterprise run roughshod over worker, retiree, and entrepreneur.
Ireland has some lessons for us to learn, and hopefully the Irish government will learn a few as well.