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Finance (Local Property Tax) Bill 2012: Committee Stage (Continued)

Tuesday, 18 December 2012

Dáil Éireann Debate
Vol. 787 No. 3

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(Speaker Continuing)

[Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy] The local authorities have had their funds dipped into in the past two or three years and there is now a gaping hole. This is a way of substituting for that by making people pay a tax that in many cases is essentially a form of income tax because it is coming out of their wages or social welfare payments in the same way as a normal PAYE deduction. It is dishonest to call it a property tax.

Deputy Joe Higgins: Information on Joe Higgins Zoom on Joe Higgins It is mendacious in the extreme to refer to this new imposition as a local property tax. It is not levied locally; it is levied by central government, and central government is putting one of the most centralised authorities in the State, the Revenue Commissioners, in charge of administering and attempting to collect it. It is not in any sense a local tax; it is a bankers and bondholders bailout tax designed to gouge €250 million from low and middle income earners and social welfare recipients this year, and double that in a full year. It represents Fine Gael and the Labour Party slavishly continuing the disastrous capitulation to the troika, the establishment of the European Union, the European Central Bank and the IMF, and continuing the bailout of bondholders and bankers, making up for their disastrous gambling losses on Irish property by placing a massive burden on ordinary working class people. A local property tax would be raised locally and spent locally. In fact, as we know, this is a crude replacement for the €170 million the Government cut from the local government fund in the budget for 2012.

I am not among those Deputies from the Government parties who cynically came in here to raise the issue of distinction and alleged unfairness between rural and urban residents because urban households are more expensive and will therefore face a greater tax burden, with tax rates in Dublin subsidising places outside Dublin. I am in favour of national subsidisation of people and services, not of localism or setting country against town. The name of the tax, however, and the attempt by the Government to portray it as a local property tax must be challenged.

The reality is that the Minister had many alternatives that could raise the amount of money about which he talks with this tax, and far more. In a reply to a parliamentary question the Minister gave to me on a simple gradation of extra taxation of income over €100,000 and €200,000, he said €1.1 billion could be raised next year. Another model the ULA used based on substantive figures suggested €2.5 billion could be raised while leaving people with millions in income on a yearly basis still quite wealthy. That is before we even consider wealth or corporation taxes.

We should also object to the description of this tax as a local property tax because of the Government spin that this represents a broadening of the tax base, as if it would come from some mysterious force and not from the incomes of working people and social welfare recipients and pensioners, as if every householder has a crock of gold hidden somewhere into which he or she can dip to pay this "local" property tax. The provision for deduction at source, where the Government will grant the Revenue Commissioners the power to instruct employers to take the money in the same way and from the same income as income tax on the same day it is paid, gives the lie to the suggestion that this is a new, progressive broadening of the tax base.

It is appropriate to warn the Government at the start of Committee Stage that there is a burning fuse of anger in society generally resulting from the unjust bailout and the burden being placed on ordinary people, the massive cuts, the disastrous austerity and all that follows, the mass unemployment, the cuts to services and the suffering of our people, the negative equity and those who paid stamp duty now being hit again. There is a burning anger out there and there will be a massive revolt on this issue, far greater even than on the household tax, as the true implications of this tax are born out. There will be a huge conscious and organised movement among masses of people to boycott this process and to refuse to register or to pay. The Revenue Commissioners will regret the day they were given the power to administer and to try to collect this tax. It is one thing trying to collect from self-employed people and small businesses, those who want to make arrangements because they have problems paying, but it is another thing to face a mass movement of opposition by an enraged population, the majority of whom believe it is utterly unjust and unaffordable in many cases and that it is simply a bondholders and bankers bailout tax. There will be a massive revolt and resistance. Even at this stage, the Government should be forced to redraw this regressive and unjust measure.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett In so far as this section deals with the title of the Bill, in many ways it gets to the heart of the dishonesty and cynicism that lies behind it. It is simply an abuse of language and meaning to call this a property tax, particularly in the context of the unprecedented popular campaign of resistance and boycott against the unjust household charge.

The Government claimed repeatedly it would bring in this tax as a replacement to the household charge, which it was forced to abandon, and that it would introduce a fair and progressive system, effectively implying it would be a wealth tax. We on the left had consistently called for such a tax in recent years and thought it was about to be introduced.

That, however, is not what this is at all. It is absolutely clear at a range of levels that it is not a property tax in the sense of property being real wealth held by what most people understand to be the wealthy, those with lots of property, the men and women of property, as they were called when people like Wolfe Tone tried to organise the men and women without property.

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