More statistics this week, and more reasons for what a rotten society we are. The EU's statistical service shows the Republic ranking the lowest in terms of tax and social welfare as a percentage of Gross Domestic Product. Those who insist that we need to redistribute more income, by taxing richer people more, in order to abolish poverty, will say we should hang our green head in shame among our more socially-responsible EU colleagues. Those of us who disagree with that approach are as entitled to claim we are socially concerned, and to ask some questions.

Say your policy was always to prevent the rich getting richer and the poor getting poorer. How would you achieve that? First, you'd have to choose a definition of poverty in order to measure whether the rich were getting richer and the poor poorer. A common measure of the poverty line is income which is below 50 per cent of the average income of a household or for a person.

The ESRI study of poverty with 1994 figures shows that 20.7 per cent of persons had income below this 50 per cent poverty line. A fifth of the population means that the problem is real and not one invented by a "poverty industry".

Second, you'd have to decide how to tax new income, in order to bring the 20.7 per cent of people above the poverty line. How much redistribution is required would depend on the depth of poverty among those below the 50 per cent line. Third, you'd have to organise a tax on income which responded to earnings that increased the average income level and the relative poverty line, in order to make sure people didn't fall into poverty again. Each time the average income level was pulled up by £1 - even if by one very rich person - you'd have to make sure that everyone previously within 50p of the previous 50 per cent poverty line was compensated by the amount by which he or she now fell under the new line. Otherwise, the rich getting richer would mean the poor always became poorer. Monitoring such income measures is not easy, let alone ensuring that corrective action works. You would also have to decide at what intervals you measured income levels. There would never be a perfect match between the data and the latest tax policy. Those who argue for increased income taxes to eliminate poverty have to face up to the practical limits of their rhetoric. Another approach to measuring poverty, favoured by the EU, is to use a poverty line which is a per cent of median, rather than average, income. The median would be the mid-point in the series of every person's income, as if lined up in a row. And so it wouldn't matter if the rich person at the end of the scale got richer. The mid-point wouldn't change, whereas the average would. The poor wouldn't get poorer, by virtue solely of the rich getting richer.

Measuring poverty by 50 per cent of median income, 15 per cent of persons were poor in Ireland in 1994. Not a fact to be proud of, certainly. By using the median, one can at least defuse the "rich getting richer" rhetoric and concentrate on a range of measures to reduce, or even eliminate, poverty (a goal which is more achievable using a mid-point rather than the average measure).

In this context, the rhetoric over last year's cut in capital gains tax lacks a serious policy, as opposed to ideological, foundation.

That cut has become the symbol of everything that was supposedly wrong with the last budget. Yet no one has pointed out any identifiable, harmful social effects attributable to the cut. A small number of people may have got richer, but does that matter?

We don't know yet if the cut has produced more income available for social purposes or not. It may well do so. Far from being utterly bad for social policy, the worst that can be said about the cut is that the jury is still out. Even the Combat Poverty Agency agrees. It didn't approve of the cut. But the agency did note, in very small print, that: "If the benefits of this change go to shareholders the main beneficiaries are pension funds and future pensioners. However, these changes could also attract foreign direct investment, thereby creating new jobs. This policy should be monitored to assess the extent to which it helps to tackle poverty." Three cheers for some intellectual integrity.

To stop the rich getting richer and the poor getting poorer is the wrong policy goal. To reduce poverty as near as possible to eradication is the right one.

Oliver O'Connor is an investment funds specialist