Richard Boyd Barrett: Property Tax Is Regressive, Harms Local Services
Richard Boyd Barrett argued the property tax is a regressive burden that has not produced extra funding for local government and is likely to rise after a general election. He said the government delayed revaluation and increases because of the political damage they would cause and insisted the tax bears no relation to income or ability to pay.
Property tax criticised
Barrett said the property tax is a "very live issue" and predicted that once the general election is out of the way the tax is only going to go in one direction - up. He accused the government of holding off on revaluation and forthcoming increases because they know how politically damaging an increase would be.
Replacement of progressive funding
He argued the tax replaced a progressive funding model - centrally funded through income-related tax - with a regressive charge on the family home. Barrett maintained that for every cent collected in property tax, central government funding was taken away to the same amount, meaning there has been no extra cent for local government.
Local government budgets and cuts
Drawing on local authority budgets he is aware of, Barrett said councils - including Dublin City Council and another authority mentioned earlier in the week as "Duniairat Down" - are cutting services. He listed specific reductions and increases he says have occurred - cuts to retrofit budgets, environmental awareness budgets and community grants, alongside increased rates for small businesses and higher parking charges.
Fairness and examples from local areas
Barrett argued house value often bears no relation to household income or ability to pay, noting examples of former council houses that are now worth a fortune while occupants remain on very low incomes. He said this mismatch makes the property tax unjust and regressive for many households.
Call for a more progressive approach
Concluding his remarks, Barrett called for a different, more progressive way to fund local government that is not based on the value of a property over which residents have no control and which does not reflect their income or ability to pay. He also noted that others, including Owen Keegan in relation to Dublin City Council, have made similar points about the impact on local budgets.
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I'll keep this brief but the property tax is still a very live issue and I don't think anybody should fool themselves politically if you like about that fact and the feeling is that once the general election gets out of the way property tax is only going to go more. in one direction and that is up and that the government has been holding off on the revaluation and the increases that will follow because they know how politically damaging it will be to increase the property tax as would have had to been the case if the original plan for the property tax had been followed through and the government has backed away from that because they know how regressive people feel it is. The government may dispute this but to me it is indisputable and I'll just put it as simply as this. You see, what did the property tax do is replace a progressive funding of local government with a regressive form of funding for local government. and when it was introduced it was suggested that actually the introduction of the property tax was going to lead to better local services and more funding for local government I always and those of us who opposed it always felt that was a nonsense but what we said has turned out to be the case because there hasn't been an extra cent for local government. the local authorities certainly that I am aware of the local authorities certainly that I am aware of in Dublin, notably Duniairat Down earlier this week, Dublin City Council, far from there being more money for local government, they are cutting. they are cutting, in my case, they have cut, as I think I mentioned to you earlier on, the Fianna Fáil, Green, Labour, Soc Dem, Alliance now controlling Duniairat Down has cut the retrofit budget, which we should be doing more of, and they cut the environmental awareness budget, and they cut the community grants budget, and they increased rates for small businesses, and they increased parking charges, and they increased parking charges. you would have thought they have more money with all this property tax money, but they don't, they have less. because for every cent they got in a property tax, central government funding was taken away to the same amount. so that is actually what happened. we replaced a progressive tax, which was centrally funded through income related tax, with a tax on the family home, which has nothing to do with your income and your ability to pay. and what do you get for that additional burden? nothing. nothing. nothing. and Owen Keegan, who I wouldn't always agree with by any stretch of the imagination, has made that point, has made that point as well in terms of Dublin City Council's budget. So, I think the rationale that was put forward was bogus, and the evidence is now in that that is the case. and that situation will get worse on the other side of a general election at whatever point some sort of revaluation or reconfiguration of the property tax comes in. and I think that would be unfair. and I, you know, I think it's totally just unjustifiable, because, you know, in my area, but this is not just about my area. I'm sure this is true of many, many parts of the country. the value of your house has absolutely nothing to do with your wealth or your income. nothing. Now, it may be the case, that the two correlate, and that you have a house that's worth a lot, and you have a lot of money too, but there is no automatic or necessary connection at all. and in fact, in my area, there's lots of council houses that people bought, but they are now worth a fortune, through no fault of their own. in fact, they're worth a fortune now, because no other council houses were built after that. and so anything, if you can get any kind of house, it's worth a fortune. but not because of, it doesn't bear any relationship to the income in the house, and your ability to pay. and often the people in those houses are on very, very low incomes. so it's just not fair. it's not fair, and it hasn't done anything to improve the funding for local government and the services that follow from it. and in some cases, the evidence of some of the budgets, as I mentioned, is that actually the situation is getting worse, in terms of local government funding. so that's my case, for saying, we need a different way, a more progressive way, to fund local government. that isn't based on a value of a property over which you have absolutely no control, and where it bears no relationship to your income, your ability to pay.
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