A chara, - The idea of using car tax to pay for local authority services is outrageous. Already in Ireland there is a poor attitude to tax compliance. This is partly due to poor enforcement, but also arises because people have a poor perception of the benefits which they derive from their taxes. This, in turn, is linked to the fact that Ireland is almost unique among developed countries in terms of the proportion of tax revenue which passes through central government. Taxes therefore are seen as being sucked into an amorphous central repository, with poorly defined outputs at the other end.
While the use of car tax to pay for local services may appear to go against this pattern, it is nevertheless a deficient form of taxation. It will only pay for a vague proportion of local services, hence its benefits will be poorly defined; while many who will make use of local services will not have paid any car tax and therefore will free-load on the system.
The poor perception of the purposes of the taxation system leaves the field open to those (mainly right-wing) advocates who see in tax reductions the redemption of the Irish economy. Is there any reason why the surplus which the Minister for Finance apparently has available should be given away in tax cuts? Would it not be better to use it to build community centres, reduce class sizes in our schools, or resurface rural roads? While there is clearly a case for reducing the tax burden on less-well-paid workers, this is not what the right-wing tax reduction advocates have in mind. Yet nobody among our so-called left-wing parliamentary parties seems to have the nerve to stand up and state clearly that taxation is a necessary element of civilised society which provides public goods.
In my view, ultimately the only effective way to pay for local authority services, and to imbue the taxation system with greater public credibility, is to decentralise most public services to the local level, and to use local income tax to pay for these services. In Sweden, local municipalities are responsible for education, health, housing, social welfare, unemployment assistance, child care, care for the elderly, recreational and cultural services, public infrastructure (roads, sewers and water supply) and local economic development. Most of the income tax which people pay goes directly to support these various functions of local government.
While minimum standards are set by central government, communes have a degree of discretion in local tax rates. Variations in these rates, however, are clearly reflected in the level of local services. If the citizens don't like an additional tax imposition, they can vote against it, or vote the commune majority out. However, in Sweden, citizens respond to the much higher level of responsibility devolved to them by displaying a correspondingly high level of responsibility in their attitude to taxation. Non-compliance is regarded as a heinous deed; it generates the opposite of the "good man yourself" reaction which is typical here in Ireland.
What we need here is to create a clearly visible link between paying taxes and getting a return in terms of public services. Using car tax to pay for rubbish disposal violates this principle. Decentralisation of both tax payment and the delivery of services to the local level sustains it to the maximum degree. - Is mise, le meas,
Pairc an Raille, Ma Nuad, Co Chill Dara.