I believe we should have a property tax in Ireland and I genuinely want to pay my fair share of a progressive property tax when it is legitimately and properly introduced in this country. However, I have many concerns about the ‘confusion’ surrounding the recently introduced household charge.
For example, is the new household charge a true property tax or is it another form of personal taxation masquerading as a property tax? If it is a property tax, then why not simply describe it as such? The relevant enabling legislation is entitled The Local Government (Household Charge) Act 2011. But a household is not a house or a property – it’s a person or group of people living together in a single domestic unit according to Collins English Dictionary.
This raises another important question: does the personalization of this new ‘tax’ place it outside the domain of property and commercial law? Presumably those who have signed up to pay this charge have entered into a binding contract to continue paying it. But can those who haven’t registered be taken to court if invoices and associated receipts are not being issued in respect of payment for this ‘charge’ and if there is no evidence of a breach of any established commercial contract?
Of course, the whole thing may be an exercise in obfuscation and manipulation. We may be witnessing another example of weasel wording /actions being employed for ulterior motives – in this case disguising the fact that a direct form of personal taxation is being deployed as the legal bulwark for a campaign to bluff people into voluntarily enrolling into a binding contract that can ultimately be enforced in the commercial courts.
The personalization of this tax undoubtedly permits the authorities to use the threat of deploying the Revenue Commissioners as enforcers against those who refuse to volunteer for the new ‘property’ charge – in effect, allowing the authorities to raid personal income via the PAYE route. However, to actually pursue this option would surely be a contradiction insofar as it would confirm de facto that the charge is not a property tax. It would also be ironic to go down the income tax route in view of the stated decision by the Irish government to rule out the option of raising the targeted revenue via income tax because this “would constitute a tax on jobs.”
As stated, I believe in property taxes. However, I do not wish to be duped, or bullied, into signing-up for a dubious tax. Moreover, I am not confident that the recent emergency introduction of the household charge will transform into a fully thought out or properly administered property tax system next year or in the foreseeable future. The record to date of our state authorities suggests that purported interim solutions to funding problems become entrenched as incrementalist and crisis-management approaches to ‘leadership’ compels our state representatives to move on to identify ever new sources of emergency revenues. In short, it is likely that the inappropriate and emergency ad-hoc arrangements introduced to collect the household charges will simply be left in place, with the prospect of higher charges being applied year on year to an illegitimate scheme.
Why not just take a little more time and introduce a genuine property tax – and do it properly, genuinely and transparently? Indeed, surely the vaunted Fiscal Troika could be easily convinced about the merits of a slightly delayed but acceptable and sustainable property tax in preference to the current shambles.
On a weekend radio programme recently, I heard Minister Joan Burton deride those who refused to pay the household charge as an assemblage of two recalcitrant factions: those on the extreme left of the political spectrum and those who always seek to avoid paying any local charges. Setting aside the offensive tone of the remark, this classification is also surely incomplete as my observation suggests that many people fall into a third category – those who are willing to pay a genuine property tax but who are wary of the subterfuge and over-assertive behavior of the authorities. I know of many instances in recent times where individuals made queries to public servants about the legitimacy, appropriateness or fairness of crudely applied new measures designed to either make savings or raise new state funding. Too often these inquiries have been rebuffed with the stock response of “challenge it in courts”, something most of us simply can’t afford to do in these straitened times.
It would be interesting to see how the state authorities would react if the harassed taxpayers could combine to play this game and call their bluffs by taking legal action against suspect decisions. If those who haven’t paid the household charge to date contributed the equivalent amount to a solidarity fund to support legal challenges against doubtful state diktats, a substantial war chest (of up to €80 million or more) could be created for the purpose of safeguarding honest governance. If such a fund is created, its first challenge should, of course, be to test the democratic credentials of the household charge that claims to be a property tax.
Brendan Bartley
Ireland after NAMA 
May 1, 2012 at 10:43 am
Brendan: thanks for this post. I wanted to address the first of your issues which is what exactly this particular household charge was charging for and, secondly, on what part of a household was it meant to levy a tax on.
In December when I first heard about this I thought about my first year economics training: that tax is a way of levying a charge on things that are abundant and scarce. As Rob and colleagues have shown, on this basis, this is not a tax. Secondly, I wonder what exactly was being taxed? Was it the front door? Was it the portion of the public footpath leading to that door? Perhaps it was a window tax?
On the last big demo against the charge in Dublin, there were indeed many different types of people taking part and it is building on such vague sentiments of solidarity that a wider movement is born.
May 1, 2012 at 10:59 am
Good article.
This “charge” was an ill thought out attempt to collect sufficient information, without much trouble, so as to progress (we presume) to something more equitable.
The problem is nobody trusts this government to provide any kind of fair and equitable taxation, given their entrenched support for the Croke Park Agreement.
How long will it take to collate all the necessary information to begin a process of discrimination between poor and rich property owners?
How would it be done?
By the Revenue commissioners?
Why not then just increase income tax on the better paid.?
Of course they will squeal that they are paying enough,but reality is they are not-given,for example, the pension allocation loopholes still open to many,despite the emergency need for more revenue.
Nobody believes that Civil Servants retiring in future years will get the pensions promised and contracted for with the State.
Even the Germans face this reality with their own people.
If this new tax gets going it will be levied most harshly, on people living in the densely populated cities-not on our rural cousins.
Why?
Well, as Jesse James said when asked why he kept on robbing banks:
“because that’s where the money is!”
May 1, 2012 at 6:45 pm
[New post] Some other thoughts on household charge/property tax demonstrates clearly that confusion is a state of mind. What were ‘Domestic Rates for before they were stupidly removed by FF. What is the difference between Domestic Rates and Household Charges.
I have paid my property charge as my contribution to the provision of the local services and to the funding of the local government that provides them. In return I expect value for money in a quality service for the community in which I was born and bred. I am a working pensioner and will play my little bit as long as I can. So, instead of not paying according to my ability, my efforts over the next few years will be to fight to ensure that I get both in terms of what I need.
I note with amusement that you are prepared to encourage payment into the Law Society in legal fees but not into Civil Society in community fees or charges or whatever you want to call them. The introduction of this charge is the first stage of a long overdue reform. Sure it will increase as it is consolidated with reliable property size and property value data and becomes a full blooded property tax. This tax will, along with water charges, play a key part in re-building a modern Irish economy within a revived and accountable European social democracy. Remember Brendan, it was ordinary working families and their unions who built this social democracy and the time has come to defend it. The payment of charges for local services is payment into a fighting fund for the very retention of hard won achievements like local democracy and clean fresh water for every family. These achievements had to be won against opposition from Spanish dictators and Greek generals, from British Tories and from German Tories, from our own neo-nationalists and from the new totalitarians of both the right and left in Ireland and throughout Europe.
So come on Brendan I suspect that you are not to mean to pay but I have to ask – are you with us or against us?, please ‘scrum down’ and push with the rest of us. Surely you are not simply -just too politically posh to push.
Regards
Brian Brennan
May 2, 2012 at 3:20 pm
Domestic rates was one of the most hated taxes of all.
It was detested by rich and poor alike.
It was large,in proportion to many peoples income, because it never took income into account,only the valuation of the property and it was structured so that those on an average wage living in the usual three bedroom semi D paid proportionally much more of their income than their wealthier neighbours in more luxurious properties
Fianna Fail scored massively by pandering to both rich and poor at the same time,and abolishing this tax.
To reintroduce the same type of rates taxation at this time is going to cause terrible hardship.
Indeed, many will default, and allocate their limited resources to paying for food or heat or rent instead.
This government is determined to bring the nation to a state of civil unrest and open rebellion (we are already there!) rather than address those with good incomes/pensions, as a primary target for increased taxation.
Flat rate/stealth taxes, such as VAT increases which impinge on electricity,gas,fuel food clothing etc are draining the lifeblood of the poor.
May 2, 2012 at 3:48 pm
Apropos the comment by Brian Brennan, yes, confusion is rampant!
Although I stated it twice, maybe I didn’t make it clear enough that I believe in genuine property taxes (just as I also believe that other progressive charges and taxes can contribute constructively to paying for vital infrastructural services). I certainly have not and do not advocate giving funds to the law society instead of investing them in essential services – you miss my point completely if you misread and extrapolate my argument in this way. Also, we need to avoid confusing civil society with the state authorities (government and their public sector officials). My direct concerns are about (a) the potential problems that ensue from impulsive and ill-considered actions that are introduced with duplicity and arrogance by the state authorities, and (b) the associated danger that democratic governance is being undermined. The authorities appear to be happy to target and raid soft (and often vulnerable) funding sources on an ad-hoc and unfair basis. They also seem to be prepared to deceive and intimidate their targets in the process – particularly by invoking the legal redress option that is unaffordable to all but the very rich in an increasingly fragmented and enfeebled civil society.
In the circumstances, I raise a number of queries. I wonder aloud if the unions and other elements of civil society should be more active in attempting to harness resources to “fight fire with fire” as the authorities subject citizens to more and more coercive pressure through duplicitous decisions and counterfeit actions. I speculate that consideration might be given to creating a solidarity fund along the lines suggested in my Opinion piece – with the unions or some other organized part of civil society taking the lead for collecting and managing this legal “war chest”? I ask if there is scope to challenge the authorities via the legal route in the specific areas where the ‘”soft monies” are raised and, if so, could this be viewed as a positive protest avenue for civil society? In this regard, I have since come to reflect on the extent to which this option has the potential to be developed as a constructive response to the passiveness that pervades Ireland as described in a recent Irish Times article by Fintan O’ Toole (Opinion: 17th April 2012)?
The rugby and snobbery metaphors in the reply go “over my head.” Maybe I’ve an overactive imagination but for me the hype and growth in popularity of rugby as a sport are somehow, in my mind, associated with the mythic competitiveness and the posturing excesses and bravado of the Celtic Tiger phenomenon. I may be completely wrong-headed about this – it is just a personal impression and I am a true ignoramus about rugby, which was an exotic sport that we did not play when I grew up in Ballyfermot in the 1950s and 60s. I recall vividly, however, how my younger brother was run over by a passing lorry in Ballyfermot that mounted the pavement and smashed his skull as he played there. I thus prefer a different metaphor to speculate here about options available to oblige the state juggernaut to stay on the appropriate roadway – and thereby avoid the mayhem of encroaching upon established pedestrian pathways and rights-of-way. Incorporating a pedestrian route into a vehicular motorway and claiming it is more convenient, legal and safe than the previous arrangement doesn’t make it true – at least in the honest sense of that term! Of course, it can become ‘true by default’ – if the pedestrians surrender their entitlements and effectively allow the whole lot to become a motorway for the exclusive convenience of the juggernauts. I see this as a more apt analogy for what’s taking place in Ireland today. I would also be worried about the prospect “down the road” of the juggernauts exporting our resources including, inter alia, energy, transport, communications, land, buildings, water (and in the future, fresh air). There is already a discernible pattern to this – it starts with government control of the stock as a ‘public good’, then charging for it as a ‘commodity’, followed its commercial privatization as a market ‘product’ and finally the sale of its ownership on the world trading market to non-Irish companies. I wouldn’t have to worry about this if I could believe the pronouncements and trust the actions of our state authorities – but recent experience makes that so difficult!
Naturally, it would be easier to pay-up and shut-up (or “just pay the two dollars” as they say in the USA) but sometimes it is advisable to choose the less convenient option and take a stand (or do something more pro-active) in the longer-term and wider public interest.
May 3, 2012 at 1:31 am
Up until now (thanks to the EU) Ireland had it right on property taxes – they had none. And for good reason. Don’t forget your history and the reason the country has be adamant about not providing the government and/or bankers another basis for seizing private property. Can you really be serious about favoring property taxes? Are you not taxed enough? Are you also into whips and chains? You must be ecstatic about the new toll roads as well. Let’s see, what have we forgotten to tax…income, property, sales, oh yes–you guys even have a tax for the privilege of watching your TV at home, road taxes, use taxes, surcharges, levies–good God. Is there no end to the pain and suffering you are willing to endure? Did you say “fair share” !! Whatever it is you’re smoking, it’s a bad batch.
May 5, 2012 at 6:37 pm
You’ve got it in one Marc-all Europeans are masochists at heart..and the Irish more than most.!
May 22, 2012 at 5:43 pm
have you ever tried passing through the Eye of a Needle
May 22, 2012 at 11:20 pm
Gilmore and Kenny,and Howlin and Hogan; are working on it, at the moment..
May 3, 2012 at 5:56 pm
There is a role for some taxes! Life was definitely nastier, shorter and more brutal for most people in Ireland and the UK until the public health and sanitation improvements (referred to by Brian Brennan above) were introduced. It wasn’t medical breakthroughs that reduced the prevalence of infectious diseases and extended the longevity of our populations but public health reforms and improved infrastructure – clean water, sanitary drainage and decent housing. They were necessarily funded by taxes (fiercely resisted by the well-off and middle class rate-payers). Fortunately, sense and self-interest prevailed. It became generally accepted that it is far better to suffer a bit of financial pain than be snuffed out by a rampant disease that refuses to acknowledge distinctions between class, social status or tax-paying capacity! It took American cities a bit longer to get this message – but they did, despite resistance from those who favoured liberty (exclusively), and wanted accordingly to jettison equality and fraternity, in the pursuit of life and happiness.
Accepting the obvious role for tax contributions, the challenge is to have genuinely appropriate taxes, get the balance right and ensure that they are fair (progressive rather than regressive). It’s also important to do it properly and honestly; i.e. not screw it all up by hastiness, incompetence and disingenuousness.
May 4, 2012 at 3:44 pm
” It’s also important to do it properly and honestly; i.e. not screw it all up by hastiness, incompetence and disingenuousness.”
Now quote me one example of any Irish government ever introducing genuinely appropriate taxes that are fair and progressive.
(even the present income tax scale cannot be categorized thus.!)
May 4, 2012 at 6:42 pm
I think that is beside the point, which is, if I may be so presumptuous, that M. P. Sullivan’s in principle objection to taxation is in fact high-handed reactionary nonsense. The expression is more measured, but that’s about the long and the short of it.
June 9, 2012 at 9:58 pm
I realise this is a bit after the event but I believe that NONE of this would be needed if the Irish Government had not given away the birthright of the Irish people when it gave away the gas.
Now we have oil as well and a potential €420 BILLION sitting of our coast. I have little doubt that the Government will do the same again and give it all away, whereas 51% ownership and a levy on the gas/oil extracted would enable us to dispense with taxes like these.
I am unemployed and whilst I have registered I cannot afford the tax. I would pay €10 a week, but this option is denied to me.
Someone said that the towns will pay more. I very much doubt that. They want to drive everyone into the towns so this will be used as an excuse to aid that agenda.
March 28, 2013 at 1:38 pm
Whatever your views about a property tax, remember that Margaret Thatcher was brought down by the protests and riots over the introduction of the Poll Tax. The Tories then quickly changed it to the Council Tax which still exists and whilst not perfect by any means (and it is expensive) but it creates a true link between elected Local Authorities and citizens who pay for services and who then demand a high level of service, unlike anything I have seen in Ireland! I worked in Local Government in the UK for many years and observed how most politicians there are very sensitive to the demands/expectations of citizens, again totally unlike what I hear from my family and friends who live in Ireland and my own more limited experience.