The government is still keen on introducing water meters and water charges, as reported in the Irish Times. I agree in principle, but not in detail. I’m glad that the government seems to have abandoned a poll tax. The current announcement, however, foresees a bilinear tax: The first N cubic metres of water are free, the rest is paid for.
Bilinear taxes are rarely optimal. In this case, a substantial share of water is untaxed so that there is no incentive to preserve water below the free allowance.
Much better, therefore, to charge for all water use — and rather than give people a benefit in kind (free water), give those on benefits a “water allowance” and those on wages a “water tax credit”.