April 04, 2012

The System




Half of Irish Homeowners Join Boycott of New Property Tax 

by Douglas Dalby

As originally posted: The New York Times
April 2, 2012


DUBLIN — Anti-austerity protesters are claiming victory after the government acknowledged that around 50 percent of Ireland’s estimated 1.6 million homeowners failed to pay a new, flat-rate $133 property tax by the March 31 deadline.


“It is quite clear a mass boycott has really sent this government a significant message it didn’t want to hear,” Luke Flanagan, one of the parliamentary deputies leading the opposition to the new household charge, said in an interview on Monday. “When we started this campaign, even 25 percent support translating to several hundred thousand would have been phenomenal, but we estimate over a million people eligible to pay this tax have refused.”

Introduced on Jan. 1, the household charge was intended as a forerunner to a comprehensive property tax next year. It has become a lightning rod for widespread disenchantment on an assortment of issues like cuts to services, findings of political corruption, taxpayer liability for debts to private banks and even European legislation intended to enhance wastewater treatment from septic tanks.

Ireland has had five austerity budgets in four years and faces at least four more through 2016 as it tries to cut its deficit to an agreed 3 percent of gross domestic product from its current 10 percent. The European Union, European Central Bank and International Monetary Fund have lent Ireland $90 billion but in turn have demanded spending cuts and tax increases.

The Irish government argues that it has no choice but to introduce the interim tax at the behest of its lenders and has vowed to identify and prosecute those who have refused to pay.

“We will begin with sending out letters and then escalate it from there to the maximum fine of 2,500 euros” — $3,330 — “on top of the outstanding amounts due in late fees and interest,” a spokesman for the Department of Environment said in an interview on Monday. “We will be taking people to court if necessary, and if there is refusal to pay, then that could be seen by a judge as contempt of court.”

Opponents, like Joe Higgins, a Socialist Party deputy, argue that the likelihood of this happening is slim. He said that he believed the government would tread warily over the coming months as it tries to persuade the electorate to pass a referendum on May 31 binding Ireland to budgetary constraint.

“I think they will adopt a softly, softly approach so as not to alienate people further in the next two months,” he said. “But if a substantial cohort of the decent, law-abiding people of this country continue to make a stand, there is no government that can stand against them.”

The government is now concentrating on linking the new tax explicitly with the provision of local services in a bid to persuade people to “do their patriotic duty.” The minister for environment, Phil Hogan, who is responsible for introducing the charge, has even suggested that local authorities prepared “to pull out all the stops” in collecting the tax may be rewarded. This was widely interpreted to mean others would be penalized by disproportionate cuts from central funding to local services like libraries, playgrounds and swimming pools.

The government remains determined to collect and still believes most people will be prepared to pay the charge eventually, rather than risk prosecution or escalating fines. Both sides are aware of the importance of weight of numbers: the government is hoping there will be a tipping point that will end the rebellion as the protest dwindles. While acknowledging the potential psychological impact of maintaining its current base of nonpayers, Mr. Flanagan said many would carry on regardless. “I don’t care if 99.9 percent of people end up paying it,” Mr. Flanagan said. “I won’t be paying it and there are plenty like me.”


A version of this article appeared in print on April 3, 2012, on page A4 of the New York edition with the headline: Half of Irish Homeowners Join Boycott of New Tax That Has Symbolized Fiscal Woes.

No comments: