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.
However, in 2013 the Central Statistics Office conducted the first comprehensive survey of household wealth in Ireland (the Household Finance and Consumption Survey (HFCS)). The survey provides information on the ownership and values of different types of assets and liabilities along with more general information on income, employment and household composition.
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 using the HFCS. 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, 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.
The wealth tax scenario in the research paper that is closest to the wealth tax outlined by the Deputy in his question is the high threshold-large exemptions scenario as outlined in Table 5 of the Department of Finance/ESRI study. This scenario has a personal threshold of €1.0 million (doubled if married and a €500,000 increase per child), applies a 1% tax rate and excludes farms, the household main residence, business and pension assets. Given it is not identical to the scenario outlined in the Deputy's question, care should be taken in interpreting the revenue estimates. This scenario, given the distribution of household wealth in Ireland in 2013, is estimated to raise €53 million as outlined in Table 8 of the Department of Finance/ESRI study. The research notes that its tax revenue estimates are static; in other words, no behavioural response to the tax is modelled. The estimate of €53 million, therefore, is likely to be an upper estimate of the revenue that could be raised.
In order to estimate the yield from a tax with the precise parameters as outlined in the Deputy's question, it would be necessary to seek the agreement of the CSO to revisit its original survey data for this specified purpose. This would be a significant undertaking that would take considerable time and resources to complete. It is also noted that the HFCS does not include specific data on the global assets for those domiciled or ordinarily resident and the domestic assets for those resident for tax purposes. As such, any estimate on the yield obtained from HFCS data would not fully capture the parameters outlined in the Deputy's question.
