Household charge fails to follow Smith’s rules

THE famous economist, Adam Smith’s Canons of Taxation included the following: (i) Tax must be easy to collect.

(ii) It must be fairly allocated, ie with respect to ability to pay. (iii) Taxpayers must know what the tax revenue is paying for.

It seems to me that in relation to the household charge recently imposed here, only characteristic (iii) applies, ie we have been told that the tax revenue is part of our repayments package to the IMF.

Judging from complaints made by people who have attempted to pay the charge, it is not easy to collect. Also, as it is a flat rate payment of €100 it would not appear to be based on ability to pay, it is a regressive tax.

In my opinion, if this tax followed all the characteristics of Smith’s Canons of Taxation, people would have no problem paying it. If tax revenue is spent on relevant public expenditure in this country, the government would have little problem in selling new taxes.

Martin Owens

Green Valley

Donnybrook

Douglas

Cork