Thursday, 5 July 2012

Questions (18)

Gerry Adams

Question:

15 Deputy Gerry Adams asked the Minister for Finance if his Department has ever produced an estimate of the potential revenue yield to the State from the introduction of a wealth tax; if so, if he will quantify the estimate and the methodology used to calculate it. [32748/12]

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Written answers (Question to Minister for Finance)

To estimate the potential revenue from a wealth tax, in the sense of an annual recurring tax on wealth, one would need to identify the wealth held by individuals. I am informed by the Central Statistics Office that the CSO institutional sector accounts do not give an indication of the number of households or persons classified by the categories of wealth they hold. These statistics are based on aggregate information collected from financial institutions and do not contain the demographic details which would enable such a breakdown of the statistics. So while the CSO's Institutional Sector Accounts show that households held c. €126 billion on deposit in 2010, this is not broken down by income or wealth categories. However, I understand that, following discussions between the Department of Public Enterprise and Reform, the CSO and the Central Bank, the CSO has commenced a "Household Finance and Consumption Survey", which will collect information on household wealth. The first results of this survey will be available in 2014.

I am informed by the Revenue Commissioners that they have no statistical basis for compiling estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared in a limited number of specific circumstances — for example, after a death — Revenue states it is not in a position to link an individual's income to her/his financial assets.

Asset values increase and decrease over time and in the context of recent economic circumstances, they may have declined considerably in many cases. Thus, if the value of an asset or of an individual's wealth is measured at a particular time there is no guarantee that the asset value or the individual's wealth will remain at that level or increase from that point. This would make it difficult to predict the potential yield from a wealth tax and would have to be borne in mind in terms of its consistency as a source of revenue.