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Sinn Féin opposes family home tax

14 December, 2012 - by Pearse Doherty TD


Speaking during the second stage debate on the Property Tax Bill today Sinn Féin finance spokesperson, Pearse Doherty TD said: “Sinn Féin will campaign against its introduction and if it is introduced we will campaign for its abolition”.
Deputy Doherty said:
“Today Fine Gael and Labour rushed through the second stage debate on the Family Home Tax.
“Despite the fact that one in four mortgage holders are in mortgage distress and hundreds of thousands of families are struggling to get by, the government is pressing ahead with this odious tax.
“This is not a property tax. A property tax would include all assets. It would include stocks and shares; it would include homes, land, yachts and art collections. It would be, in plain English, a wealth tax.
“The Family Home Tax seeks to impose a charge on every single family home in the state. There are no exemptions for those in mortgage distress. There are no exemptions for those in negative equity. There are no exemptions for those who paid tens of thousands of euro in stamp duty during the boom.
“Fine Gael and Labour both made clear pre-election promises not to introduce a property tax. They have embraced Fianna Fail's proposals lock stock and barrel and in doing so they have broken these promises.
“Hundreds of thousands of people will simply be unable to pay this tax if and when it comes into force.
“Sinn Féin will campaign against the introduction of this Family Home Tax and if it is introduced we will campaign for its abolition. “ENDS


Note to editor: Full text of Pearse Doherty’s speech during second stage debate on property tax
“Minister, yesterday two truly shocking documents landed on my desk, and the desks of all TDs and Senators.
The first was the Central Bank’s Residential Mortgage Arrears and Repossessions Statistics for the third quarter of 2012.
The second was the Society of Saint Vincent de Paul’s response to Budget 2013.
Anybody who is considering supporting the Family Home Tax should read these two short reports. And after reading them they should ask themselves;
‘How does the Government expect families, who are already struggling to get by, to pay the so called Property Tax next year and the years after?
The latest Central Bank figures reveal that a shocking 1 in 4 mortgage holders is in mortgage distress.
When you add those in arrears and those in restructured payments there were 179,370 homeowners unable to pay their mortgage at the end of September.
And the numbers continue to rise.
Between July and September 115 new families fell into mortgage distress every single day.
23.5% of all residential mortgages are in distress.
These are the people whom the Government expects to pay the Family Home Tax if this house allows it to be introduced this week and next.
The Society of Saint Vincent de Paul report said, and I quote, “Budget 2013 once again placed the heaviest burden onto the shoulders of people who are struggling” and that “those who have already borne the brunt of cutbacks are unable to take any more.”
The report detailed four cases studies of how the Budget would impact on the household income of four typical families.
Cut to child benefit, cuts to the back to school clothing and footwear allowance, increased prescription charges, increases in carbon tax, increases in motor tax, and the introduction of the so called property tax were leaving many of the state’s poorest families up to €1000 worse off.
These are the people whom the Government expects to pay the Family Home Tax if this house allows it to be introduced this week and next.
When you read the Central Bank report and the Saint Vincent de Paul report one after another you can only come to one conclusion.
Thanks to the measures introduced by Fine Gael and Labour in Budget 2013, next year will be the worst year of the mortgage crisis to date.
And this is the year the Government wants to introduce a Family Home Tax. Are they mad! Have they lost their senses! Do they really not understand the extent to which ordinary people will simply be unable to pay this new charge?
When Fine Gael and Labour were in opposition they had a very different view of this tax.
In 1994 Enda Kenny opposed the introduction of a property tax. He said, and I quote, “It is morally wrong, unjust and unfair to tax a person’s home"
During the 2011 general campaign Eamon Gilmore promised not to introduce a property tax on residential homes.
He said, and I quote, "We have to remember that many people have already paid a property tax on their residential home.”
But then what did Pat Rabbitte say to Sean O’Rourke on last Sundays Week in Politics about election promises?“Isn’t that what political parties do during elections”.
There is a word for this kind of thing where I come from. Hypocrisy!
So here we are debating a proposed tax on the family home being introduced by Eamon Gilmore and Enda Kenny.
And let’s be very clear about what is being proposed.
This is not a property tax. A real property tax would include all assets. It would include stocks and shares; it would include homes, land, yachts and art collections. It would be, in plain English, a wealth tax.
But no, this government is not in the business of taxing wealth or the wealthy.
It is in the business of taxing those who are least able to pay.
The Family Home Tax seeks to impose a charge on every single family home in the state.
There are no exemptions for the 1 in 4 mortgage holders in mortgage distress.
There are no exemptions for the hundreds of thousands of mortgage holders in negative equity.
There are no exemptions for the tens of thousands of mortgage holders who paid tens of thousands of euro in stamp duty during the boom.
There are no exemptions for people whose homes are being literally ripped apart by pyrite.
Fine Gael and Labour have decided that all of these people must pay.
The Government has also ignored the advice of its own expert group and included social housing in the legislation. Local authority housing and voluntary association housing is to be taxed too.
There is little doubt that councils and housing associations will feel compelled to pass on this extra charge to their tenants. So people who don’t even own their own home will end up paying the family home tax.
There are some TDs and Ministers, particularly in the Labour Party, who argue that the family home tax is progressive, that it is the kind of tax left wing politicans should support.
Nothing could be further from the truth.
The Bill before us is very clear – everyone must pay – irrespective of their ability or their income.
There are no exemptions for those on social welfare.
There are no exemptions for those living in or at risk of poverty.
There are no exemptions for those living with unsustainable debts.
They only facility provided for in the Bill for those who will be unable to pay is to seek a deferral of the tax.
This measure is available only to those on the very lowest of incomes - €15,000 per year for a single person and€25,000 per year for a couple.
And even here the Government has decided to punish people.
If you can-not afford to pay and you successfully secure a deferral you will have to pay an interest penalty of 4%.
Worse than this, if you can-not afford to pay and are unable to secure a deferral the Government will charge you an interest penalty of 8%.
One of the most shocking elements of the legislation are the proposals to deduct the family home tax at source for those unable to pay.
Extensive powers are given to the Revenue and to various government Departments to have the family home tax deducted from a person’s wages, social welfare payment, pension payments, farm payments and other state payments.
No consideration is given to the impact such deductions could have on the financial stability of the household.
What if a deduction at source were to push a family into poverty and with it the children who are part of that family?
What if a deduction at source were to leave a family without food or a pensioner without heat?
The legislation is silent on this. The Revenue is not required to take such matters into account.
All Fine Gael and Labour care about is making people pay – even if paying means going without food or heat or other essentials.
This is a bad tax. It is deeply unfair. It is also unworkable. It will cause real hardship for hundreds of thousands of families.
While Enda Kenny and Eamon Gilmore are clearly happy to break their pre-election promises, it is not too late for those of you sitting on the government backbenches to take a principled stand.
Of course Fine Gael and Labour are not the only parties who are guilty of hypocrisy on the issue of the family home tax.
Fianna Fail leader has some cheek standing up today and arguing against the government’s proposal.
If Michael McGrath or Michael Martin were in government this tax would have been introduced this year.
It was a Fianna Fail Government that negotiated the first Memorandum of Understanding with the Troika. That agreement contained a clear commitment to introduce a property tax for budget 2012 as part of a revenue raising package of €1.6bn.
Fianna Fail’s 2012 pre-budget submission included a proposal for a property tax to raise €120 million.
But ever the opportunists they are now opposing the very tax they proposed and advocated.
They say that this is the wrong time.
Was there no mortgage crisis in 2010 or 2011 when the supported the introduction of a property tax? Were hundreds of thousands of families not struggling under the weight of the economic crisis created by Fianna Fail and the four austerity budgets introduced by Fianna Fail?
Nobody should be under any doubt, if Michael Martin were Taoiseach he would be faithfully implementing the Troika agreement negotiated by the cabinet of which he was a part, and that would include a property tax.
Sinn Féin has consistently argued and campaigned against the introduction of a tax on the family home.
We have also proposed credible alternatives which would allow the Government to raise the revenue it needs in a way that does not punish struggling families or hurt the domestic economy.
Last month I published a Wealth Tax Bill. My proposal is for a real property tax, a tax on all personal wealth.
When designing any new tax measures there are two key tests. Is the tax fair and will people be able to pay it.
Sinn Féin’s proposal meets both of these criteria. The Governments proposal meets neither.
Indeed across Europe countries struggling to reduce deficits and raise revenue for investment in public services and job creation are turning to wealth taxes.
France, Sweden, Norway, Finland and Iceland successfully operate wealth taxes.
In France the socialist Government has recently strengthened its existing wealth tax legislation and expects to double its yield next year.
In Spain the Conservative government has reintroduced its wealth tax.
In Germany the leading opposition party and sister party of the Irish Labour Party, the SDP, have drafted wealth tax legislation and promised to introduce it if successful in this September’s general election.
In Britain the Liberal Democrats are currently advocating the introduction of such a tax.
Why? Because wealth taxes they are fair, there are implementable and they are good for the economy.
Sinn Féin’s wealth tax proposal is based on aspects of the taxes currently in operation in France and Sweden
The Family Home Tax takes no account of people’s ability to pay.
Sinn Féin’s proposal would levy a 1% tax on those with net assets in excess of €1,000,000
The Family Home Tax will place an enormous burden on the Revenue.
Sinn Féin’s wealth tax would be self-assessed and therefore easier and cheaper to administer.
The Family Home Tax in on the gross value of the property.
In Sinn Féin’s proposal all debts and liabilities are taken into account.
There are almost no exemptions in the Governments proposals.
Sinn Féin’s proposal includes a range of exemptions.
The Family Home Tax ignores the fact that there will be some people who are asset rich but income poor.
Sinn Féin’s proposal includes safeguards for such cases.
The Family Home tax is designed to hit 1.9 million homes irrespective of the financial circumstances of the families.
Sinn Féin’s proposal targets only those who can and who should pay.
The Governments proposal is unfair. It will push families deeper into financial hardship, debt and poverty. It will make the mortgage crisis worse.
The Governments proposal will also hurt the economy. It will take money from those people who are keeping the local economy alive. By taking money out of the pockets of those who spend their disposal income on local goods and services the government will further damage domestic demand.
Jobs will be lost; tax revenue will be lost; the economy will suffer.
The Family Home Tax is bad for citizens, bad for society and bad for the economy.
Sinn Féin will oppose it at every stage as it makes its way through this house.
We will campaign against its introduction and if it is introduced we will campaign for its abolition.”

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