Dáil Éireann Debate, Thursday - 22 June 2023
110. Deputy Richard Boyd Barrett asked the Minister for Finance if he is aware that on 14 June 2023, the CEO of a charity (details supplied) outlined to the Oireachtas Committee on Budgetary Oversight, wealth tax measures the Government could take that could raise up to €8 billion; and if he will make a statement on the matter. [30199/23]
View answerI am aware that the CEO of Oxfam Ireland recently addressed the Oireachtas Committee on Budgetary Oversight, as part a discussion on the taxation of assets and wealth. During that hearing, Oxfam International's report of earlier this year regarding global wealth inequality which proposes new wealth taxes in jurisdictions around the globe, and which is entitled “Survival of the Richest”, was referenced.
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 including Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax. Revenue estimates that these taxes raised over €2.8 billion last year.
The Oxfam report notes that many countries do not have any form of tax on inheritance. As the Deputy is aware, Ireland has a significant inheritance tax regime in place in the form of Capital Acquisitions Tax which is charged (with limited exemptions) at a rate of 33%.
Oxfam's report also notes that “Rates of tax on capital gains – in most countries the most important source of income for the top 1% – are only 18% on average across more than 100 countries.” In contrast to the 18% average cited in the report Ireland taxes capital gains at a rate of 33%.
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.
In addition to wealth taxes, the Government takes action against inequality through our tax and welfare system. For instance, the strong redistributive role of the Irish tax and welfare system is evident in the range of supports introduced to help mitigate the impact of the Covid-19 pandemic and the current cost of living pressures on vulnerable households and businesses. The overall distributional impact of Budget 2023 was strongly progressive, with the lowest three deciles experiencing the highest gains as a proportion of disposable income.
Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country, which contributes to the redistribution of income and to the reduction of income inequality.
It is estimated that the top 1 per cent of income earners, those earning in excess of €263,000 will pay 23 per cent of the total income tax and USC collected in 2023. While those earning less than €65,000 which represents the bottom 80 per cent of income earners, will contribute only 21 per cent of total income tax and USC receipts.
In conclusion, I can assure you that all taxes and potential taxation options are kept under constant consideration and it remains a priority of mine to ensure that Ireland maintains its progressive taxation system.
