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Irish homeowners are not "revolting" - they're treating their incompetent government with contempt

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Ireland's Minister for the Environment, Phil Hogan
Ireland's Minister for the Environment Phil Hogan, who  
bungled the Household Charge.
It seems just about anywhere the new Irish household charge appears in the foreign press the words "boycott" or "revolt" are used to describe the fact that so many people did not pay the fee by Saturday night's deadline. Yesterday's New York Times quoted an Irish parliamentarian who refers to the "mass boycott." The Financial Times says the Irish government is facing a "revolt" over the new tax. {You might even see such words around here.}

Words like "boycott" and "revolt" suit those political campaigners who have been leading the charge calling on the people not to pay, but what's going on is nothing like a boycott or a revolt. It's more a case that hundreds of thousands of Irish people have weighed up the pluses and minuses of paying and come to the conclusion that not-paying is not such a bad idea. Why? Because the government blew this one in a big way. The charge was designed and implemented badly. Very badly. 100% ineptly.

The charge itself – €100 ($133) for the year payable by the owner of each house and apartment in the state – is more annoying than crushing. There was even an option to pay the tax on a quarterly installment basis.

Considering the hefty sums people pay in income tax and VAT (sales tax of 23%) €100 is no where near the most onerous levy Irish people pay. Heck it's even less than €160 ($213) annual license fee for having a television in the home, a fee that most Irish people pay without grumbling.

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Read More:

Half of Irish homeowners join boycott on $131 tax

Anti-household charge protest attracts 5,000 demonstrators in Dublin

Ireland's leader Enda Kenny pays no price for bad-mouthing the Irish people
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Before this new charge was introduced for the 2012 tax year there was no tax on homeowners at all. {No property tax, although there is a fairly steep stamp duty payable on the purchase of a home.}

So it is a new tax, but did the Irish people really revolt against the government's austerity program when they decided not to pay this new tax? Is it really the case that after four years of accepting the punishing cut backs and tax hikes that this €100 charge was the straw that broke the camels' back? No. No, what really happened is that many Irish homeowners thought they might get away without paying this one.

From the start it was clear that government was flying by the seat of its pants on the household charge. They had no database of who owned what property. Sure they knew who lived where, but they didn't know who were the renters and who were the owners.

When this point was put to members of the government they went into full tyranny mode. The Minister for the Environment Phil Hogan oversaw the planning and implementation of the Household Charge and he, in particular, became the face of this hectoring, bullying government.

The government declared that they were going to get the information they needed by strong-arming the electricity and natural gas companies into revealing what they knew. The state-owned banks too would be forced to comply.

That tactic didn't work, but it was revealing: the government was going to struggle making people pay. The government's lack of information as to who owed and who didn't meant no bill or invoice could be sent to those who had to pay. The more this question was raised the more aggressive the government became. The public didn't so much fear as smell fear.

It wasn't just the lack of invoice, however. The tax came with a list of exemption criteria, but the criteria were unclear. If the vox pops on the radio are an indication many people who aren't exempt seemed to believe they are. It was all as clear as mud.

The government carried on brow-beating long past the point when it was obvious that it wasn't working. As the clock ticked down towards the March 31 deadline the government then took to threatening homeowners with cuts to local services. That too failed, possibly because it was too late, possibly because the waste in the mostly unaccountable local government spending is obvious to all or possibly because many people just didn't want to pay the €100.

The government made such a mess that 800,000* Irish homeowners thought they'd take their chances on the possible fine for late payment. This only served to highlight another serious design flaw in the Household Charge: the penalty for not paying on time is too small.

Those who fail to pay within the first 6 months will owe €116 ($154). The penalties rise a bit after that, but if you leave it for a year you owe only €142 ($189). A €42 ($55) penalty is just too small to cause anyone worry, especially if you believe that this government is incapable of figuring out who really owes and who doesn't. (Compare that penalty to the €60-90 that's owed by those who fail to put €2 into a parking meter.)

To me this is the essence of what's going on here – hundreds of thousands of people have treated the new Household Charge as not much more than a parking meter. They figure there's a good chance they'll get away without being caught and if they are caught the price they'll pay is too small to worry about.

This isn't so much a revolt against imposed austerity as a statement by the people on the capabilities of the government to actually enforce the law. For generations Irish people have skirted the law when the opportunity has arisen and this is more of the same. They've looked the government in the eye and said, "I'll pay - when you make me." It's up to the government to prove them wrong.

* Even the figure of 800,000 who didn't pay is open to question as the government doesn't really have an accurate figure for how many households there are in the country. Simply incredible.

** Just for the record: I paid. My wife says I'm too American.

{Photo thanks to Independent.ie.}

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