An Improvised Explosive Device (IED) is described by Wikipedia as ‘a home made bomb fabricated in an improvised manner incorporating destructive, lethal, noxious, pyrotechnic or incendiary materials’. The encyclopedia goes on to explain that ‘IEDs made by inexperienced designers may actually detonate on either the maker or the emplacer of the device’ and that these unintended detonations are known as ‘own goals’.
This could be a highly accurate description of another improvised entity currently in hand by the government in this State – the property tax. So much so that we should label it an Improvised Taxation Device (IMT) and advise its Fine Gael and Labour emplacers that no matter how carefully they handle it there are extreme risks of premature detonations.
Two weeks ago on RTE’s Morning Ireland there was an effective attempt to detonate by remote control with the unlikely fingers of economist Peter Bacon on the trigger. Mr Bacon has been described as the most influential adviser to Irish governments in decades. He was a key designer of the NAMA project by which banks and property speculators were bailed out from their fatal activities in the property bubble. Very much an establishment figure then, and certainly no socialist! But he was coruscating when it came to some of the claims made by advocates of a property tax.
The government mantra is that a property tax, which is nothing more than a tax on the family home or an individual’s home, represents a ‘broadening of the tax base’ and is therefore better than a ‘tax on work’. Peter Bacon says on this, ‘The argument is that it’s a broadening of the tax base, but it isn’t really in the sense that it’s going to be paid for . . . basically out of the incomes of homeowners or home occupiers, so it is going to land on the PAYE and self employed income sector. . .’
The interviewer then comments,‘I suppose the fear is amongst people that the income tax system, adjusting the income tax system, means higher taxes on labour.’ To which Mr Bacon replies baldly, ‘But that’s what this is going to be. What is the property tax going to be paid from? Other than the income of those people who own or occupy those properties? . . . that means it’s a higher tax, the effect of that is equally replicated by raising the tax rate. There is no difference. The point of focus has to be what is the income stream or expenditure stream from which this tax is going to be drawn.’
Unfortunately this interview was not widely reported in the mass media. Unfortunate because if it had been, perhaps Taoiseach Enda Kenny and his deputy and Leader of the Labour Party Eamon Gilmore, might not have had the audacity to trot out the same old ‘broadening the tax base’ argument during their so called party think in the last few days. They really have to be challenged as to where homeowners will find the hidden treasure to pay their home tax if it is not ‘a tax on work that is workers’ wages.’
The ITD was further destabilised when the IMF declared a few days ago that the home tax should be 0.5% of the value of the home. This concretised the issue for many homeowners. Now they could put a figure on what may be demanded next year under this heading whereas up to this there has been a deliberate attempt by government to keep the discussion quite abstract. People with a very average home valued at €160,000 would be faced with an annual bill of €800 at a rate of 0.5%. The demand would still be quite substantial at €400 if the rate was half that. The question for the government is how it expects to be able to implement a savage extra demand like this on a population already reeling from four years of austerity taxes, wage cuts and mass unemployment when there is a massive revolt already underway against the Household Tax involving a boycott by 50% of homeowners in the State.
In the same report where the IMF is demanding a draconian home tax, it is also demanding cuts in pensions and social welfare allowances, having earlier illustrated the dire contraction of the domestic economy in 2011. The contradiction of seeking more austerity while hoping for economic growth seems lost on its authors. As indeed it does on the Fiscal Council which yesterday demanded an even more savage Budget than planned by the government.
All these agencies seem oblivious to the rage that is smouldering out there among a people who can take no more. If they persist, their improvised cuts and taxation devices to rescue the speculators will blow up in their faces in a serious blow to the politics of bailout and austerity.
CHECK OUT OTHER RELATED ARTICLES:
- Comment: Property tax implementation will further increase opposition to austerity
- Press Statement: Campaign Against Household Water Taxes (CAHWT)
- Comment: Do not register for Household Tax!
- Proposed property tax would be an unbearable burden on working people
- Comment: Government Local Government Agency Continue to Mislead over Numbers Liable for Home Tax Registration Payment
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