Dáil Éireann Debate, Wednesday - 13 July 2022
154. Deputy Ged Nash asked the Minister for Finance the estimated yield from a 1% levy applied to wealth in excess of €1 million for a single adult double that for a couple; his views on a recent report (details supplied) that such a levy on wealth would raise approximately €248 million for the exchequer; and if he will make a statement on the matter. [38659/22]
View answerI welcome the research that the ESRI has undertaken on options for tax revenue raising in Ireland. The report provides significant insights into the exchequer, distributional and income effects of an array of potential tax changes, all of which are important considerations for budgetary policy. Among these, a number of wealth taxes were considered.
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.
These wealth taxes include Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax, which between them, according to Revenue’s Annual Report for 2021, raised some €2.77 billion net. last year.
Any revenue raised from a new wealth tax may not therefore be additional to the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of such a new tax.
As to the projected yield that might be derived from the wealth tax outlined by the Deputy in his question, I would note that in order to estimate the potential revenue from a wealth tax, it is necessary to identify the wealth held by individuals. As there is currently no such wealth tax in operation in Ireland, the Department understands that the Revenue Commissioners have no basis or requirement to compile the data needed to produce estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared to the Revenue in a number of specific circumstances (for example, after a death), this information is not a complete measure of assets and liabilities in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth based tax.
During 2016, my Department, jointly with the Economic and Social Research Institute (ESRI), conducted a research project into the distribution of wealth in Ireland and the potential implications of a wealth tax. The research formed part of an on-going joint-research programme with the ESRI on the Macro-Economy and Taxation. The research paper, available on the ESRI website (https://www.esri.ie/news/scenarios-and-distributional-implications-of-a-household-wealth-tax-in-ireland), presented results on the composition of wealth across both the wealth and income distributions in Ireland. A number of wealth tax scenarios were then applied to the Irish data (wealth tax regimes from other jurisdictions and hypothetical scenarios). In each case, the associated tax bases and revenue yields, the number of liable households across the income distribution, and the characteristics of the households affected are outlined. While the scenarios may not fully capture the parameters outlined in his question the Deputy I hope he will find them informative.
