Dáil Éireann Debate, Thursday - 1 February 2024
145. Deputy Richard Boyd Barrett asked the Minister for Finance if he will consider and introduction of a wealth tax, given recent reports by an organisation (details supplied) and the Central Bank on the wealth distribution showing ever growing concentration of wealth in the hands of the very wealthiest households. [4570/24]
View answerI am aware that Oxfam International recently (on January 15th 2024) produced a new report regarding global wealth inequality entitled “Inequality Inc.” which advocates for a tax on wealth. While I understand the background to calls for a specific wealth tax in Ireland, it is not the case that wealth in Ireland is untaxed, as taxes on wealth are already in place here.
While calls for a specific wealth tax are often made, there are already a number of wealth taxes in place including Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax. Certain forms of Stamp Duty also act as taxes on wealth charged in a number of ways, including on the acquisition of shares, stocks and marketable securities of Irish registered companies, and on the acquisition of property both residential and non-residential.
In total, the provisional net receipts from these forms of tax came to €3.9 billion in 2023. Finalised net receipts for these forms of tax will be available in the Revenue Annual Report later this year.
A 2022 report from Commission on Taxation & Welfare identified challenges that would impede the implementation of a specific wealth tax. They found that a new tax on net wealth should not be introduced without in the first instance attempting to substantially amend Ireland’s existing taxes on capital and wealth. Rather than introducing a specific tax on wealth, the Commission maintains that it would be more effective to re-examine the primary existing forms of wealth tax, CGT and CAT. These are taxes on wealth that have well-established, but distinct, bases and are well-understood in their operation.
The Government has also taken action against inequality through our tax and welfare system. The strong redistributive role of the Irish tax and welfare system is evident in the range of supports that were introduced to help mitigate the impact of the Covid-19 pandemic and in the series of measures designed to limit the impact of the current cost of living pressures. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI.
Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country. The current structure of the income tax system operates as an effective means of income redistribution, helping to reduce the comparatively high levels of market income inequality to around the EU average.
It is projected that the top one per cent of taxpayer units, who are those with annual income in excess of €290,000, will pay just over 24 per cent of total Income Tax and USC in 2024. This is a very large proportion of the total Income Tax and USC take from such a small cohort of taxpayers. In comparison, 80 per cent of taxpayer units, which is the cohort of income earners with annual income of less than €69,500 and account for about 2.74 million taxpayer units, will pay 21 per cent of total Income Tax and USC.
Therefore, I do not have immediate plans to introduce another wealth tax in addition to those set out above. As with all areas of tax policy, the taxation of wealth, will be kept under review throughout the annual budgetary process.
