Dan Boyle: Tax Attacks

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From top: Revenue’s Local Property Tax values for Cork City; Dan Boyle

Today Cork City Council holds its annual meeting to determine its local property tax rate.

In the five years since the Council has had this power, the Council has reduced the rate by 10% for two years, freezing for another three years.

The effect of this has been to further lessen the funds available for better public services. All the worst for being self inflicted.

There are many myths about taxation, that in Ireland have led most politicians and political parties to avoid any mature debate on its efficacy.

Many people are paid wages that are far too low to have them qualify to pay income tax, social insurance or the universal social charge. In many other countries payment of tax begins at even lower rates of pay.

The pay off in Ireland is expecting middle income earners to pay income tax at the higher rate of tax, at far lower rates of pay than exist in other countries.

Surreptitiously the government increases tax take by not index linking tax credits and bands. This is far more dishonest than any proposal to raise taxes.

We badly need to look to many of our incentive based tax credits, especially those that relate to housing. It is clear that the wrong actors are benefiting.

Where are the benefits for renters to match those given to first time buyers? Why is assistance to first time buyers for new builds only? Why not direct incentives to those who renovate empty or derelict buildings, first time buyers or not?

Spending taxes like VAT, excise duties and yes carbon tax, are a growing part of our tax mix. In raising these taxes it can be said that most of our citizens are taxpayers.

We should hypothecate/ringfence particular taxes with a dedicated purpose. When a carbon tax was first introduced in Ireland, with The Greens in government, it was introduced at a rate of €10 per tonne (coal wasn’t included).

We insisted that the social welfare fuel allowance be increased accordingly. We were also able to significantly increase the number of houses that could be retrofitted.

No such measures have been taken with subsequent changes to carbon tax. It is vital that they are done now.

On Corporation Tax we need to finally admit that the jig is up. The creative accountancy has got to stop. In holding our hands up we also have to admit that our room to manoeuvre will become severely restricted.

By stopping our mailing address approach to corporate taxation we will be compromised in being able to change rates.

What we can do, however, is abolish any remaining allowances that have been used to ensure that many MNCs have never come close to paying 12.5% on their Irish operating profits.

One of the most damaging narratives, in recent decades in Irish politics, was promulgated by the Progressive Democrats. That party sought the mantle of being the anti tax party. Its particularly obsession created an impression that a tax increase, in any circumstances, was always a bad thing.

This created a situation in 2009 where our tax base was hugely distorted, unable to respond to economic shock.

The PD’s tax obsession was a perverse representation on the tax marches of 1979 (six years before its foundation) when the highest income tax rate was 60%! The PDs chose to represent the most prosperous in Irish society, hardly those most discriminated in the Irish taxation system.

Tonight, along with my Green Party colleagues, we will seeking an increase equivalent of €7.50 per household per month in the local property tax, to raise an additional €3.2 million for better public services.

This in a budget of over €160 million, most of which cannot be touched. I suspect some of our fellow councillors will be aghast. I’m hoping that others can work with us to create a better narrative.

Taxing bad is good. Better public services cannot exist without better taxes.

Dan Boyle is a former Green Party TD and Senator and serves as a Green Party councillor on Cork City Council. His column appears here every Thursday. Follow Dan on Twitter: @sendboyle

Top pic: Revenue.ie

10 thoughts on “Dan Boyle: Tax Attacks

  1. Qwerty123

    In London, we paid £1200 per year in council tax, we got our bin and bags collected weekly, bin bags left at door, road swept in convoy with bin truck, pavements swept daily, (i remembered first where all the leaves were in Autumn), they took away large items, all you do is ring and tell them where you are leaving it and all the other services councils do, library’s, housing, parking, anti social behavior etc.

    best of all, we got an annual statements showing us exactly where our money in % terms was spent on.

    Great value in hindsight.

    in comparison in Dublin, I really struggle to see where the money is spent, pavements never seen to be swept and the bins, well only collected every 2 weeks if i am lucky.

    I resent paying more council tax here as I know it will be squandered with the most likely worst local governance in Europe.

  2. Joe Small

    The Local Property tax is finally giving some responsibilities to local government that they have demanded for decades. We have yet to see any corresponding increases in services or governance.

    Obviously we have an incredibly centralized State but isn’t this in part due to the abysmal failure of local government and local politicians to provide adequate services? We’ve taken refuse collection and water off them already. What services do they still provide that affect people on a daily basis?

    I’m glad you make the point that the lower paid in Ireland are pretty much exempt from all direct taxation – something that simply doesn’t happen elsewhere and that, to pay for this exemption, middle-earners get hit harder.

    I don’t think ring-fencing is the way to go. it leads to popular causes getting guaranteed funds while less popular spending priorities (repayment of debt, building prisons, etc.) has to live on remaining scraps.

  3. bisted

    …the single, most significant environmental initiative ever taken by government was the ban on bitumous fuel pushed through by Mary Harney of the PDs…

  4. garrett

    Councillors receive an annual salary known as a Representational Payment and also a monthly allowance for attendance at meetings as part of their representational role. The representational payment is €17,060 gross per annum (taxable), and the monthly allowance is €5,158.85 per annum. Both are paid monthly.
    No breakdown of how the monthly allowance is spent by councillors is available.

    That’s a salary of almost €80,000.
    The proposed property tax increase of almost 900 houses goes to pay Dan’s salary.
    That’s on top of his 70,000 pension.
    €150,000 a year of taxpayers money for Dan, nice.
    How about property tax being linked to salary?
    How about giving up your double state payments?

    Additional property does not lead to additional money available. FG reduces central funding accordingly so it’s just more tax for you and me.

    Come clean with the facts Dan.

    1. SB

      So if the property tax remains at the same level then Dan and the other councillors don’t get any taxpayers money?

  5. eoin

    Dan wants to raise another €3m in taxes but wants us to overhaul our corporate tax system which attracts FDI here, which is, to a large extent responsible for the €10bn in annual corporate tax receipts? Big pic, Dan, big pic.

  6. garrett

    “We were also able to significantly increase the number of houses that could be retrofitted.”

    The numbers that could or the numbers that were?

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