Dr. Tom McDonnell:

So the answer is to give them more powers and perhaps retain the ability to effect an increase. There was a practicality issue. The local property tax is also fair from a vertical-equity point of view because a land tax can lead to circumstances in which a six-storey high-rise on a plot right beside a little cottage would be paying the same as the latter. Therefore, there can be issues. Issues also arise over affected shops being pushed out of gentrified areas, for example. These concerns arise. There are issues with a site value tax. It is not perfect in the sense I have described although it may be perfect from an economic-efficiency point of view. We felt the local property tax and site value tax were both extremely good concepts – from both equity and efficiency perspectives – and that they could stand together.

To answer the question of Deputy Boyd Barrett, a vacant site surcharge could absolutely live beside a site value tax. Indeed, that is pointed to in the commission's report. To go further in responding to the question, if a land tax and property tax were set significantly high enough, the issue of nationalisation and so on would not matter in that one would effectively be soaking them as much as possible, allowing for expenditure on universal basic services, nationalised education and health or income transfers, or reducing taxes in other areas. Therefore, we felt it was important that both taxes should come into being over the medium to long term and that both should be a very significant part of the overall tax arrangement.