Madam, – There are clearly many disparate opinions on the property tax proposals. There is, in my opinion, a clear need to distinguish between residential and investment property. The principles of a sound tax system are based on the government deriving revenue from transfers of economic value.
Income tax should provide the foundations of such a system, a reasonably predictable and transparent stream of revenue for the government coffers. It is reasonable to expect those at the top of that system to shoulder marginally higher rates, although “flat rate” tax systems have anecdotally proved equally successful, particularly in countries in the early stages of economic growth, such as the Western Baltic states.
Transaction taxes provide a second layer of income which once again is related to ability to pay and transfer of economic value, and although these will be sensitive to economic conditions – witness the fall in VAT and stamp duty receipts – the principles are sound.
Property tax on residential property is flawed in principle. Homeowners do not generate income from a primary residence.
Why should someone who has worked hard to pay off her mortgage over many years and seen her property grow in value be faced with a bill for the privilege of living there?
Why should someone who inherits a valuable property and has met the estate tax obligations be punished for the prudent financial planning of his parents?
Tax on investment property which is generating income is worth some discussion, although there are some good arguments against it, particularly in the current climate. I have seen numerous references to investments in property “as a pension” over the last few weeks. It’s time to break off the Irish love affair with the fast-track property millionaire culture. Price is not a synonym for value and Irish property remains overvalued relative to income.
A further correction of this imbalance would benefit us all, making homes more affordable and freeing up more discretionary income, which would create more transaction-based revenue for the government.
It would be welcome to see the Government and the think-tanks spend as much time assessing the costs of running the country as the size of the coffers. – Is mise,
GAVIN DREDGE,
Sunny Hill Park,
Cabinteely,
Co Dublin.
Madam, – It is difficult to ignore the absence of any international dimension to the findings of the Commission on Taxation.
It makes no mention of the issue of international tax dodging which has direct relevance for Irish tax payers. This, despite being tasked with “. . . reviewing all tax expenditures with a view to assessing the economic and social benefits they deliver”, (Commission on Taxation, terms of reference).
Every year $160 billion is lost to developing countries through the tax dodging of multinational corporations, Christian Aid estimates.
More money is lost through multinationals failing to pay tax in Irish Aid’s priority countries than is provided in aid by Irish Aid through taxpayers’ money.
In effect, the excellent work Irish Aid is doing is plugging the hole left by tax-dodging multinational corporations. Is this the most effective way of spending Irish taxpayers’ money? It is a contradiction, in the words of former South African finance minister Trevor Manuel, “. . . to support increased development assistance, yet turn a blind eye to actions by multinationals and others that undermine the tax base of a developing country”.
The Commission on Taxation would have done us all a service by highlighting this. – Yours, etc,