Professor Alan Barrett:

I do not know the details of it, but in terms of the principle, if there is a collective sense that more taxes are required, the argument is always that one should widen the tax base rather than increase existing taxes. A property tax falls into that zone. As it is suggested more and more people should be exempt from the property tax, by definition, it means the rates will be higher. One can certainly make a case for the exemption of persons who are genuinely on low incomes because typically we make allowances for this. When the argument starts to be made, however, that one should be exempt from it if one paid a lot in stamp duty in recent times, it introduces a different consideration. It is not about one’s current capacity to pay, rather it relates to a notion of tax previously paid. Philosophically, that seems different to me. To the extent that we can keep rates as low as possible, that means broadening the base. Current income is a reasonable criterion on which to exclude people, but if one goes beyond this, one is getting into a dangerous situation of limiting the base and thereby raising the amount that must be raised from every other person.