THE Government's decision to introduce a flat-rate property tax, in the guise of a household charge, "is almost as regressive as can be" Richard Tol, the shaggy-bearded research professor at the Economic and Social Research Institute, told Around The Block.
In real terms, the regressive nature of the tax means somebody who struggled to buy a one-bed apartment in a working-class area is paying the same charge as somebody who lives in a McMansion in the Irish countryside or a former banker in one of Dublin’s leafier suburbs.
Tol pointed out that property taxes are always regressive because poorer people always pay more as a percentage of their income, but that flat-rate charges are even worse because “there’s no variation whatsoever”. In other words, the rich will get comparatively richer.
Tol thinks the impact on the man on the street will depend on the rate that is finally chosen by Minister for the Environment Phil Hogan.
“€100 doesn’t seem threatening but €1,000 would cause a lot of frustration,” Tol said.
The estimates have indeed been wild. For months it seemed that a tax of €1,000 was likely, raising up to €1.8 billion and helping to fund local-authority services and pay local-authority wages that swelled in the boom.
Fianna Fáil and the Greens then said it would be closer to €100, but that could have been a pre-election gimmick.
There’s no doubt local authorities need a proper source of funding, for the likes of fire-fighting, libraries and parks, but the level of oversight for their spending needs a serious upgrade, otherwise we’ll just be reading more stories about junkets, overspending and waste.
