Taxing issues for the Government

THE Government is going to shy away from imposing either a property tax or water charges in the December Budget.

We all know that a number of ministers, including Justice Minister Dermot Ahern during the week, have warned us repeatedly about the need for such taxes and charges. But they haven’t got the bottle to do it.
Of course, there should be a tax on property. And of course we should be charged for the amount of treated water we use.
No Government will risk making voters even more angry than they already are by imposing those necessary charges in the near future.
I think we are going to have to wait until the European Union forces us to pay water charges. Then whatever Government is in power will be able to wash their hands of the matter and blame the EU.
Anyway, in order to be able to charge us for the water we use, every house would need a water meter. And it will take a number of years to install them everywhere they are needed. Otherwise, they will have to have a blanket charge on each household, irrespective of the amount of water used.
I know that some people were tinkering around with this idea so that they could impose the water charges immediately without having to wait for the meters to be installed. But that would be the same as sending a similar ESB bill to every household, irrespective of the amount of electricity used.
Because water, like the air we breathe, was always free, people will resent having to pay for it. But we have polluted the water so badly over the years that it costs a lot of money to clean it up in order to be able to drink it.
We have polluted the air we breathe too but it is going to be difficult to meter the air we use. So I suppose that is going to remain free until they think up some way to charge us for it.
Perhaps when they do come around to charging us for the water we use, they will only charge us if we consume an amount above a certain limit for each household or each individual. Well, that would be the fairest thing to do. But fair play and administration do not always go together.
They may have one charge and one limit for drinking water and another charge and another limit for the water we wash ourselves in and flush the toilet with. Perhaps drinking water will only be available in supermarkets. One does not have to travel beyond Ennis to discover that that has already been the norm in some places.
However, I would always prefer to see the supply of water left to local public authorities and water charges should not be looked at merely as another revenue earner but more importantly as a means to respect and conserve this vital natural resource. The evidence shows that when you charge for water, people conserve and use it wisely.
According to the Minister for the Environment John Gormley, as much as €1bn per annum can be raised from water metering charges whenever they are introduced.
But that is not this year or next. We will have to wait until after the general election.
The same goes with property taxes. The Government would love to be able to raise revenue in this way in the Budget. But it is doubtful if it would ever have the support needed to get such a measure through the Dáil.
Actually, it is going to be very hard to get any extra tax increases or any new taxes through the Dáil. It would be stretching the imagination to see two of the Independent TDs that the Government relies on for support voting in favour of a property tax. Not to mention any of the rebel Fianna Fáil TDs, who have already lost the party whip.
It will be extremely difficult to get the Budget through in any case, as the Government seeks to cut or earn an extra €3bn from the economy. So while they might still talk about the need for a property tax or for water charges, they are not going to be imposed in the immediate or near future.
Of course, there are many ways of killing a cat, apart from choking it with butter. They can still take money from those who can least afford it, rather than from those who can. There has been a lot of talk from economists and from government circles about the “need” to bring more people into the tax net.
They tell us that half of us are not paying a cent in tax. They are not talking about wealthy tax exiles or about those high earners who, through one loop hole or another, can avoid paying tax. No, they are talking about the lowest paid among us.
They are talking about people who are earning so little that they do not come into the tax net.
I know that many of those people would love to be paying tax. It’s not that any of us likes to be paying tax. But it might mean that the lowest paid would have to be paid more in order to reach the threshold at which tax is paid.
That’s the way it is at present. But if some of these right-wing economists get their way, the tax net is going to be widened to include those very low income earners.
I am one of the few reporters with any sympathy or understanding for the Government in their present plight. But if they are so heartless as to extend the tax net to the lowest paid, then that sympathy and understanding will go out the door.
Such a Government would not deserve a day in power.