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Friday 9 December 2016

Public reject any bid to increaseincome tax

Majority believe stealth charges are fairest way to balance the public finances

Fionnan Sheahan and Treacy Hogan

Published 24/06/2011 | 05:00

THE majority of people would prefer to pay a stealth tax like a property or water charge than be hit by further income tax hikes, a new Irish Independent/Millward Brown Lansdowne poll reveals.

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The poll shows just one in five favours income tax increases to balance the public finances, while 31pc would prefer a water tax and 31pc opt for a property tax.

Meanwhile, when asked what they would consider the least fair way to reduce the budget deficit, nearly half of people polled, or 45pc, cited an increase in income tax.

This was followed by 28pc opposing an introduction of water charges and 24pc against a property charge.

And almost one-in-two people said they felt more optimistic about the prospect of economic recovery under the new Government.

It comes after a day of mixed reports on the state of the economy, when official figures revealed that the domestic Irish economy suffered a dramatic slump at the start of the year.

But the overall value of the country's economy, boosted by multinational exports, grew slightly in the first three months of 2011.

The findings of the opinion poll, which was conducted before yesterday's economic reports, show 47pc are more optimistic about recovery, 28pc feel the same and 23pc are less optimistic.

The Government has yet to announce the cost of the new annual household charge, which is effectively the long-anticipated property tax by another name.

Rubberstamps

Believed to be as much as €200 for 1.8m householders, the charge will be rolled out next January after the Cabinet rubberstamps it before the summer Dail recess.

Separately, waster charges will be introduced from 2014 if the plan to install meters in every home is met, although this is likely to run into problems similar to those encountered during metering of the commercial sector.

When given the choice among which options to introduce in a budget, the poll showed that nearly one-third, or 31pc, would opt for the introduction of a property tax.

This was matched by 31pc in favour of a water charge, while only 20pc opted for an income tax hike.

The household charge means that a family living in a mansion in an affluent area will pay the same amount as those in a small three-bed semi-detached house.

This inequitable system will continue until each property is valued by the State Valuation Office and a property tax based on the value of the home is introduced.

But this is not expected to happen for several years, due to the massive backlog of work in the Valuation Office.

It also means that those with a second home, such as a holiday home, will have to continue paying the €200 annual tax on second homes, plus the household charge on this property, in addition to the household charge on their main residence.

The EU/IMF deal required the Government to introduce a property tax next year.

The money generated is to be used to fund services provided by local authorities such as libraries, fire services and street lighting.

Under the new water charging system, the average household water bills could be as much as €400 per year.

Allowance

Householders will be given a water allowance, above which they will pay per litre. The greater the amount used, the more they pay.

This system is seen as far preferable to a flat rate, where an elderly person living alone who uses very little water would pay the same as a large family.

It is still unclear how the €500m water-meter programme will be funded.

Irish Independent

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