The perils of non-compliance

Ireland and America are suffering the same problem with their contentious taxes.

A flat tax, levied on milllions of people matching a basic selection criteria, is being fought vehemently. Although non-payment is ostensibly illegal, in practice it is unlikely to result in any real punishment. This in turn could result in a major headache for the government. Am I talking about Dublin or Washington? Both, obviously.

The Irish property tax is the subject of a massive campaign of non-payment. At the first deadline for registration, last Saturday, only half of Ireland's 1.6 million households had registered to pay. There will be many more waves of deadlines, threats and posturing before it comes but the theoretical end-point is jail.

Clearly, that isn't going to happen to 800,000 homeowners. But what other possibilities do the government have? They can't afford – politically or finanically – to back down. The expected year-one revenue of €160m is too much to turn down and in a country seems to have taken all the austerity it can bear, a moment of weakness could well mark the end of the project.

The government may simply hope that attrition (and increasingly scary letters) will reduce the number of holdouts. It is possible to jail a few thousand people in a way that it isn't with a few hundred thousand.

But they then have a further problem, in that they are "only" fighting over around €80m. If they still want to come out on top financially, they can't go for expensive measures of coercion. For instance, it costs over €75,000 to keep a prisoner in jail for a year; if each holdout manages to take up just five hours of a civil servants time, then at the average wage, they would cost the government more than they owed.

As a result, any enforcement the government does will have to be enacted on the cheap, which won't be easy given the scale of the problem.

On the other side of the Atlantic is a tax that nobody wants to admit is a tax. The Affordable Care Act – Obamacare to its detractors – imposes a $695 charge on anyone who fails to purchase insurance. This individual mandate is the subject of a supreme court hearing which is baffling many economists – because it really is all in the name.

The constitution, after nearly 250 years of interpretation, allows for the imposition of taxes by Congress for pretty much any reason it sees fit. There are still limits to the legislature's power, but it is universally agreed that if the individual mandate were a tax, it would be legal. In fact, the Republican alternative to the act is essentially just that, except instead of imposing a tax on those who don't buy insurace, it gives a tax credit to those who do. In fact, the credit, which is over $2,000, imposes a far bigger penalty on non-purchasers than Obama's plan.

The administration knows how unpopular new taxes are, however, so it is refusing to call it one. And the opposition is playing along, because they know that their best chance to get the bill overturned involves pretending that the new tax is a fine along with the government. And so the court case continues.

That's not the only strange political compromise in the bill, though. In the one measure that supports the claim that the mandate is not a tax, there are no legal penalties for non-compliance. The IRS, which administers the charge, is able to send threatening letters, but ultimately non-payment means nothing.

Even more worrying for the admistration is the fact that the charge is actually far too low to do what it is meant to do. Its implementation is due to the fact that Obamacare requires insurers to take anyone who asks, and cover all pre-existing conditions; but this led insurers to fear that people would remain insurance-free until they got ill, then buy healthcare until they got better. If this were the case, health costs would shoot up, and everyone would be worse off.

Hence, people are penalised for not buying insurance even if they are healthy. All well and good, no?

Not quite. Health insurance is really expensive. That's what got the US into this mess in the first place, after all. $695 a year is actually less than almost every insurance package currently on the market, so the fear for many is that healthy young people will take a decade of paying the charge (or not paying it, if they have the courage), then join up when they get ill. If that happens too much, then insurance premiums will rise further – making that course of action even more appealing.

As President Obama and his Irish counterpart Enda Kenny are learning, making people do what you want them to is hard.

Barack O'Bama: The president with the Irish Taoiseach, Enda Kenny. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Brexit would jeopardise the rights of working women

Europe isn’t perfect, but without it millions of women and millions of trade unionists would be at risk of Tory deregulation. 

One of the most important arguments in favour of staying in the EU is the protections that membership affords working people.

Whether it’s equal rights for part-time workers, the agency workers directive or limits on the length of the working week, we all owe the European Union and its Social Charter – campaigned for by a generation of trade unionists from across the continent – a great deal.

Outside of Europe British workers would find themselves worse off both in terms of their pay packets and the rights that they rely on. Add to that the reality that outside the EU risks being a place with lower public spending thanks to a troubled economy and rising privatisation of our public services, you can understand why the vast majority of British trade unions are recommending that their members vote to remain.

And for working women, the choice is starker still, because women have that much more to lose when rights and protections are stripped from the workplace.

Just think what EU law guarantees for all working people through the social charter, and how losing these rights (and putting the Brexit bunch in charge) would impact on things we’ve all come to rely on like maternity pay and guaranteed holiday pay.

Think about how much harder the struggle for equal pay will be if it’s not underpinned by EU law.

Think about how a Boris Johnson led Tory government – outside of Europe, on the fringes of global influence and under increasing pressure from UKIP to withdraw even further from the modern world – would attack your working conditions.

The Tory right – fresh from dragging our country out of Europe and away from regulations that help keep us safe at work aren’t going to stop there. Their next port of call will be other sources of what they deem “red tape” – like equal rights legislation that helps ensure women have all the same opportunities afforded to their male colleagues.

That’s something that matters to me as a trade unionist and as a woman.

It’s something that matters to me as Assistant General Secretary of a union with more than a million female members – UNISON, the biggest membership organisation for women in the country.

It matters to me as President of the TUC – when most trade unionists are women and when we have the first female TUC General Secretary in Frances O’Grady.

But most of all it matters to me because of the stories of all of the women I’ve met and am proud to represent who benefit every single day from Europe-wide protection of their rights.

What we face is the risk of losing those rights to a cynical and desperate campaign based around false promises and rhetoric from the Brexiteers. What we need in this campaign is some straightforward honesty. So here’s my position in a single sentence: Europe isn’t perfect, but without it millions of women and millions of trade unionists would be at risk.

I won’t stand for that. Neither should you. And neither should they either.

Liz Snape is Assistant General Secretary of UNISON and President of the TUC