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Opinion: Dublin City Council's decision to cut Local Property Tax will only favour the wealthy

Dublin City Council councillors last night voted in favour of retaining a 15% cut. Here, Michael Pidgeon argues why he believes this to be a regressive step.

Michael Pidgeon
IF THERE’S ONE lesson to take from 2020, it should be the fundamental necessity of our shared public services.

When the virus hit, public services were our frontline defence. Not only the ambulance staff providing direct care, but the homeless services keeping people off the streets.

Yet a majority on Dublin City Council seem to have taken a different lesson from 2020 and prioritised tax cuts above public services.

By a margin of 34 to 21, councillors voted last night to once again cut the local property tax (LPT) by 15%, denying local services an extra €12 million over the next year. This is the maximum cut councils are legally allowed to make.

A tax cut for the rich

Don’t get me wrong. The local property tax is far from perfect and there are plenty of good reforms that should be made.

Low-income exemptions should be widened, money collected locally should stay local, and homes built after 2013 should be included (they currently don’t pay tax, due to an ongoing artificial delay in valuations). More broadly, some argue it should be replaced with a different form of property tax.

But critiques of how the tax is set up shouldn’t mask what the vote to lower the rate was: something of little-to-no value for the vast majority of Dubliners, and a tax cut worth thousands to those in the most expensive houses in the city.

Just look at who benefits from this 15% tax cut. People in council housing get nothing. Most renters won’t see the cut passed on to them by their landlord, so they too mostly get nothing.

Around a quarter of homeowners in Dublin will save only €14 a year as a result of the tax cut. In fact, a majority of homeowners will save less than €47 a year. This is less than a euro a week.

Meanwhile, those who are in houses worth millions can expect savings worth over a thousand euro each year, thanks to Dublin city councillors’ vote last night.

This is exactly the sort of outcome you get when you cut a tax like the LPT: a pittance or nothing for low- or medium-income households, and a windfall for the very richest.

This impact is backed up by evidence. Figures from the Revenue Commissioners show the top income group paying more in LPT than the bottom three income groups combined.

Tax cuts make for service cuts

Even setting that aside, it seems a bad year to prioritise tax cuts above all else.

In the council’s budget are the city’s ambulance service, the Dublin Fire Brigade, and many of the homelessness services the city relies on. It also includes the things we need to make the city more liveable during Covid-19 – cleaner streets, better public spaces, libraries and supports for business.

These services are now likely to be in the firing line in the city budget. Our capital is facing a widening deficit of nearly €40 million next year. By law, local authorities have to balance their budget each year. We don’t have the independent power to borrow, nor can we run a deficit.

In other years, council budgets might look to make up the gap with other sources of income: we could increase business rates, parking charges, tolls and so on. But Covid has made those options either impossible or untenable.

Yes, the council will seek greater efficiencies and try to protect the most important services.

Yes, central government should be providing extra supports and funding to hard-pressed local authorities.

But it is clear that services will likely face cuts in the coming year, at a time when they are most valuable.

On this tax, most of Dublin city’s councillors missed the opportunity to protect our city’s services. Those who depend on the services will pay the price.

Every single year so far, Dublin City Council has cut the LPT to the maximum extent possible.

If there was one year where that should change, 2020 should have been it. It’s a year for more public services and more solidarity – not just tax cuts.

Michael Pidgeon is a councillor for Dublin’s South West Inner City, which includes the Liberties, Rialto, Kilmainham and Inchicore. He is the Green group leader on Dublin City Council.

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