Mick Clifford: Certain sections expected to carry a greater burden

The proposed base rate for the local property tax at Dublin City Council was expected to bring in an extra €14.5m, of which €12m would be used for improving public streets. Pictures: Gareth Chaney/Collins

Every now and again, something pops up to indicate how unserious many in politics are about governing. This week it was back to basics with the most rudimentary aspect of governance: Taxation.

Last Monday, Dublin City Council rejected a motion to charge a higher rate on the local property tax (LPT). 

The LPT has a base rate, from which councillors are permitted to depart by as much as 15%, depending on how they perceive the needs of the people living in their local authority area. 

Dublin City Council, the largest authority in the State, habitually reduces the tax by the full 15%.

This year a novel idea was explored at the council. The Labour Party, Green Party, and Social Democrats proposed that the base rate would be applied rather than the usual reduction. This would bring in an extra €14.5m, of which it was proposed that €12m be ringfenced for improvement to public streets and the remainder for a discretionary fund.

The proposal was rooted in common sense. Anybody who is familiar with Dublin in recent years will know that the city has emerged from the pandemic in a shabby state. 

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Visiting it does not hold the attractions that it once did. The traditional buzz has been displaced by a mixture of decay and vague threat in the air.

Cleaning up the place could make a huge difference. 

There is evidence-based research that doing so would have all sorts of benefits for residents, visitors, business, and tourism. Adding a few euro to the property tax would be the most obvious — and arguably fairest — way to do this. 

A small contribution of private wealth towards the common good in this respect is a basic instrument in democracies the world over.

As things stand, the level of property tax in this country is very small relative to practically all other developed economies. For the average home in the capital, the proposed adjustment would mean about an extra €6 a month in tax.

Such a hike should be put in context. There is a growing divide in Irish society, one that is rooted for the greater part in the ownership of property. 

For instance, a report by the Competition and Consumer Protection Commission (CCPC) in July found that a third of the population are “just getting by” financially. The study highlighted “deep concern” about the growing wealth gap.

A member of the CCPC, Kevin O’Brien said at the time there was “deep concern” about the growing wealth gap.

“There are significant differences between age groups,” he said. 

“Those over 60 (are) showing greater financial resilience than those under 30, while lone parents and people with a lower level of formal education have the lowest levels of financial wellbeing in Ireland.” 

By coincidence, the level of homeownership in Ireland is around two-thirds of households. It would be reasonable to conclude that for the greater part, the one-third of the population who are struggling are in rented accommodation or social housing. In that context, asking homeowners to cough up a few euro extra to improve public services in Dublin appears entirely fair and reasonable.

Pushback

No dice, said the other parties in the city council’s firmament. The motion was defeated by councillors from Fine Gael, Fianna Fáil, Sinn Féin, and People Before Profit. 

Right across the alleged political spectrum, there was agreement that this assault on private wealth for the public good was just too much to bear.

Fine Gael’s position is easy to understand. The party’s base is unashamedly rooted among those who are occupying the upper reaches of the socio-economic ladder. Raising taxes for anything would go against their political instincts. In any dispute between private wealth and public good, the Fine Gaelers know where they stand. But the others?

The stance of People Before Profit suggests that, on this issue, it is determined to put profit before people. 

On Wednesday in the Dáil, Richard Boyd Barrett was calling for the introduction of a wealth tax, yet his party’s councillors rejected a few euro hike on a wealth tax by any other name two days earlier.

Richard Boyd Barrett of People Before Profit was calling for a wealth tax earlier this week.

And the prospective partners in the next government, Sinn Féin and Fianna Fáil? Where stand they on the concept of taxation of what is effectively a major asset?

This week, in its alternative budget, Sinn Féin included the measure of a €400 tax on second homes. Nothing wrong with that except the party expects to bring in €308m from it, which infers there are 770,000 second homes in the State. 

That level of fantasy about home ownership can be thrown around for soundbites, yet their councillors in Dublin run from enacting real and fair taxation.

Then there is Fianna Fáil. Councillor Tom Brabazon was on RTÉ’s Drivetime on Tuesday explaining why he and his colleagues couldn’t countenance putting a few euro on the property tax in Dublin.

Fianna Fáil councillor Tom Brabazon was on RTÉ's Drivetime show on Tuesday. Three times in a short interview he cited food banks as a reason why homeowners couldn’t be asked to stump up an extra €5 or €6 a month. 

“People are finding it difficult to make ends meet,” he said. 

To heat their homes, to pay electricity bills, they don’t want another bill that has gone up as well. 

The reality is that people are now looking to food banks for assistance, people who are out working hard, reaching out to food banks to work from one week to the next.” Three times in a short interview he cited food banks as a reason why homeowners couldn’t be asked to stump up an extra €5 or €6 a month.

Who are these people, sitting on major assets, who own their own homes, yet are resorting to food banks?

Certainly, there is a cohort out there who require assistance with food in the current environment. 

There are people in emergency accommodation, transient accommodation, renting, in social housing, but now we are being told that homeowners, and by implication not just the odd exceptions, are also among those living on the edge of want?

The image purveyed by Mr Brabazon and quite obviously endorsed by those who voted with him on the council is that this is a country in a state of collapse where everybody, bar some cossetted elite, is scrambling to survive.

The reality is that with an upsurge in the kind of populism which deigns there is no division in society other than that which separates the virtuous masses from the elite there is simply no room for sensible or fair taxation. 

In such an environment, the plight of those who are really struggling — and they are a considerable cohort — is smothered in the rush by politicians to assure every voter that they feel everybody’s pain, real or imagined.

All of that would be bad enough in normal circumstances, but it particularly bodes ill with crises looming in demographics and the climate. 

Just this week, the Irish Fiscal Advisory Council calculated that there will be a shortfall in tax revenue of around €2.5bn per annum in the near future due to climate change measures. Where is that going to come from?

In grown-up countries politicians explain the sums and societal obligations and why certain sections will be expected to carry a greater burden. 

This week’s circus in Dublin City Council shows how we do things differently here.