Local property tax


Sir, – Seán Leake argues (Letters, September 24th) that local property tax (LPT) is a regressive tax and that progressive taxes on income and wealth are the way to pay for the public services we need.

Ireland has one of the most progressive income tax regimes in the developed world. A few years ago there were regular calls from the left for Ireland to have a system of taxation and social provision akin to the Swedish, the Danish or more generally the Scandinavian model. That model was presented as one where high tax-takes allowed for generous levels of social protection and provision. But that model seems to have fallen out of favour with our social justice advocates in recent times.

This may have been prompted by the realisation that the major difference between the Scandinavian model and ours is not that Irish high-earners pay less in income taxes than their Nordic counterparts. They do not. Rather it is that those on lower incomes have a relatively significant income tax liability there but have no liability in Ireland.

The universal social charge (USC) had as one of its objectives that all income earners would make some contribution to the costs of providing public services. But changes in recent years have meant that the USC is now far from universal.

Mr Leake’s central thrust seems to be to present the LPT as yet another income tax rather than as the tax on assets which it is. Framed thus, it is but a short leap to the conclusion that it is an unfair tax if two neighbours have the same LPT liability but very different incomes. The solution to this unfairness is to exempt from LPT those who may be rich in assets but not in income. The result would indeed be that the LPT becomes yet another tax on income rather than a tax on assets.

I think the real issue which the left has with the LPT is that it applies to all residential properties and that all owners are asked to make some contribution to the cost of providing local services. The left will always prefer that these and other costs be paid from “general taxation”.

General taxation, as we all know, is tax paid by the other fellow. – Yours, etc,



Co Kilkenny.