Diarmaid Ferriter: Wealth tax policies of the 1970s show TDs a way forward

I had a lot on my mind walking down Grafton Street on Wednesday. I was on my way to the Irish Times office to take part in a political podcast discussion about the implications of the general election, which had the rude but strictly unofficial title, "The people have spoken, but what the f**k did they say?"

Then, out of the corner of my eye I spotted a re-elected rural Fianna Fáil TD. He marched straight into Brown Thomas, of all places. I decided this might be an indication of seismic change in Irish politics. I had always assumed only Fine Gael politicians bought their suits in Brown Thomas.

My thoughts harked back to a letter I read in the archives a few years ago. Sorry, but that happens to my mind a lot; a hazard of the historian's life. Later, I checked the letter in question. It was written to then taoiseach Liam Cosgrave in 1974 by brothers John and Ned McGuire. They had sold Brown Thomas and were incensed about Fine Gael minister for finance Richie Ryan's White Paper on taxation because it proposed a wealth tax.

Creeping socialism

The McGuires informed Cosgrave that since they had sold Brown Thomas, they had been “living on capital . . . Not only the McGuire family but many people like us and people who trusted in Fine Gael as a solid and reliable party for people who had created property by hard work and service to the community are shocked . . .

“There is alarm and consternation among decent people who expected better from a Fine Gael government . . .

“I am well aware that nowadays one must accept the fact that people of property, even moderate property, are living with ever creeping socialism which aims at the destruction of and confiscation by taxation and other means, of their effects and privacy, but the present White Paper proposals, at least as far as I am concerned are instant social infringement and confiscation of property.”

Coincidentally, Richie Ryan was also on my mind this week because of the death of the great Frank Kelly, who, with Eamon Morrissey, did much to lampoon Ryan and his colleagues in Hall's Pictorial Weekly in the mid 1970s, and did the FG-Labour coalition's electoral fortunes no favours.

Still, when I returned to the McGuire letter, I was also reminded that Ryan had no time for well-heeled whingers who formerly owned posh department stores. The minister derided the “highly emotional reaction” to what was a proposal for a wealth tax on property valued in excess of £50,000 at rates of 1.5 to 2.5 per cent.

As Ryan observed: “All other progressive democracies have patterns of taxation of wealth on lines similar to those proposed by us.”

In the event, the tax was much watered down; introduced in 1975, it was levied at only 1 per cent of the value of assets in excess of £100,000, with family homes, bloodstock, livestock and pension rights exempt.

Further digging around in the archives reveals that this wealth tax idea was the resuscitation of a proposal that had been agreed by Fianna Fáil when it accepted in 1970 that “a case exists in principle for the taxation of wealth”, but was then withdrawn from the cabinet agenda. When back in power after the 1977 election, Fianna Fáil announced the abolition of the wealth tax.

Tax principle

So there you have it: a Fine Gael minister for finance, supported by his coalition colleagues in the Labour Party, accepted the necessity and principle of a wealth tax more than 40 years ago, as did a Fianna Fáil government before it. Then Fianna Fáil, the party of the “men of no property”, subsequently abolished it.

Things have happened in Irish politics over the years that have not always fitted preconceived notions. Perhaps there is a message in all that as we contemplate what happens next – and I am not just referring to the possibility of a Fianna Fáil/ Fine Gael deal.

Perhaps our TDs could look at what they might have in common, as opposed to digging new trenches. Could they view the new fragmentation as a positive rather than a negative and make some meaningful attempt to reach consensus on matters of urgency – matters such as water, housing, health and wealth?

Politics as normal

There is usually a period directly after an election where we are exposed to, and appreciate, the human side of politics: the exhausted but delighted victors and the dishevelled vanquished and their supporters, some humiliated, some angry, some philosophical.

And then it passes and we are back to politics as normal in our tired bear pit of a Dáil, with its practices belonging to the 19th century and its two biggest parties born of a Civil War more than 90 years ago.

Given that we are in uncharted territory, surely this is the time to try something new. Maybe the Fianna Fáil TD who marched in to Brown Thomas this week thinks so too.