Property Tax: Playing politics with the vulnerable

The property tax is being exploited ruthlessly by politicians — irrespective of the cost to any principles they may claim to possess, writes Michael Clifford

IRISH democracy has a great outing on Monday evening. In councils around the country, but most particularly in Dublin and Cork, elected politicians flew the flag for Ireland’s unique brand of democracy. Those whom we might categorise as right-wing turned out to be socialists, while some who beat their chests as self-styled socialists put shoulder to the wheel for society’s better-off. Underpinning the whole exercise was the imperative that perception must always triumph reality, irrespective of the cost, particularly to those who might be classified the most vulnerable.

Monday’s council meetings were concerned with the most routine political choice in developed democracies. Should priority be given to cutting taxes or ensuring that there is sufficient money to spend on services? The tax at issue is the highly controversial Local Property Tax. Ten councils were given the choice of cutting the rate of property tax for next year by up to 15%.

To cut would nearly definitely ensure that services would also have to be cut. But, as the LPT remains a controversial tax, there is political capital to be garnered by throwing shapes on it.

In other democracies, a property tax is accepted as being both a prudent and socially just form of taxation. The bigger your house, the more you pay. For some strange reason, the biggest opposition to the tax in this country has come from parties which classify themselves as left-wing.

A property tax also now means that local government has a tool with which to fund itself. This devolves considerable power back to councillors. Monday was the first occasion that this power was exercised, and the results were somewhat depressing.

In Dublin City Council, Sinn Féin, Fianna Fáil, and Fine Gael all united to vote through the full reduction. This means that there will be €12m less to spend on services. City Manager Owen Keegan pointed out that the decision could hit services for the homeless, in particular.

Nobody said it at the meeting, but, by and large, the homeless don’t vote, so as far as the three parties were concerned, those living on the streets could whistle Dixie.

According to the Simon Community, there are currently around 1,400 people on the streets of Dublin looking for emergency accommodation.

You might expect the Blueshirts to place greater emphasis on cutting tax rather than maintaining services, but Sinn Féin’s position is hardly tenable. The party projects itself as being primarily concerned with the plight of those at the lower rungs of the socio-economic ladder, yet its representatives voted through a measure that disproportionately benefits the wealthiest. Tiocfaidh Armani hasn’t gone away, you know.

Keegan had proposed that, in order to protect services, it would be an idea to cut by 5% each year for the next three. That wasn’t good enough for the neo-liberal Shinners or their right-wing kindred spirits. Green party councillor Ciaran Cuffe was the lone voice of support for Keegan’s proposal. He said cutting the rate of tax was “auction politics at its worst”.

The only big party to uniformly oppose a reduction was Labour. Its councillors voted against the 15% cut. The Labour Party has been rightly pilloried for some of the measures it has taken in government, which appear to be contrary to the party’s political ethos. On Monday, its representatives on Dublin City Council reclaimed some high ground, but in the general run of things it’s more likely to cost rather than garner votes.

Apart from anything else, Dubliners are already benefiting from a de facto reduction in the tax, as house prices have increased rapidly since valuations for the tax were submitted over a year ago.

In Cork County Council, Fine Gaelers turned out to be the surprise protectors of the most vulnerable. Discretionary grants are among the services likely to be hit as a result of the 10% reduction in the tax voted through. This will see €4m shaved off the council’s budget. The council’s chief executive Tim Lucey, pleaded with members not to reduce the tax, but he was ignored.

In fact, the good old days really returned, with Fianna Fáil and Sinn Féin attempting to outdo each other in rushing to protect the wealthiest. The Soldiers of Destiny put in for a 10% cut, while the Shinners wanted the full whack knocked off, but when they didn’t get that through, they weighed in behind the former party.

The result is that a house valued at under €100,000 will receive a €9 reduction in next year’s LPT, while one valued at €1m will benefit to the tune of €175. Only the Fine Gaelers, wearing their fiscal rectitude garments rather than waving the tax-cutting flag, suggested that well enough should be left alone, in the name of protecting services. Notably, the party was at odds with their brethren in the capital.

Elsewhere, Dún Laoghaire/Rathdown voted unanimously to cut the tax by 15%. Sinn Féin councillor Shane O’Brien summed up the approach when he said that all councils shared the goal of reducing the financial burden on hard-pressed families in the area. ‘Families’ is one of those political terms that means absolutely nothing, but sounds just the business. Families surviving on a minimum wage income, and those of a wealthy accountant or barrister live on different planets, yet for the sake of votes, their respective circumstances are portrayed as identical by practically all parties.

In South Dublin County Council, all but one member voted for the reduction. Thirty six councillors voted in favour, the only dissenter being independent member Paul Gogarty.

Gogarty is best known as the former Green TD who uttered the F-word in anger in the Dáil chamber, but his was the sanest contribution to this matter in chambers across the country.

“We have an ambitious plan to increase housing and services in this county. This is our opportunity to do it.

“Everyone is hard pressed, but all that money [the reduced tax] isn’t going back into the local economy. We’re making a serious mistake.” Say what you like about the man, but at least he demonstrated he has some principles.

Counties Galway and Kerry opted to maintain the tax at its current level, which may or may not say something about the strength of community glue in those places.

Nobody likes the local property tax. It was brought in at the worst time possible, during a recession, and only after the Troika insisted on it. Privately, most politicians agree that it is a necessary form of income that is relatively progressive in taxation terms. It is certainly an astute method of providing funding for local government, and, by extension, giving councillors some control over taxing and spending. But it has also served another purpose. On Monday, it was obvious that the LPT’s role as a political lightning rod is viewed by most politicians as something to exploit mercilessly, irrespective of the cost to any principles they may claim to possess.

Cynical is too tame a word to describe what went down on Monday. If the voting choices of the councillors of Cork and Dublin is anything to go by, don’t put too much money on responsible governance breaking out across local authorities.