Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Income is not wealth. Income tax and USC are imposed on income. Wealth is a different thing. Wealth is stored income which one has not had to spend. The wealth of most people in Ireland, including those on very good incomes, is in the value of their family homes. That is where the wealth is. Most people do not have huge property assets beyond the family home. If I decide not to tax the family home, I am exempting the greatest amount of wealth that is available in society. The Deputy referred to a multi-millionaire who is living in a mansion. Under the Deputy's model, if that mansion is the family home, the multimillionaire will not pay tax on it. He would pay tax under the Deputy's system if he had a second mansion, but I would tax him on the first mansion and I am doing so. That is the way the property tax I am running operates.

I think the Deputy's approach is illogical and ineffective because the tranche of society from which his model would collect money is too small. If he wants to have a look at how it would work, I remind him that it was tried in the 1980s by a Government of which I was a member. When a property tax is applied on a narrow base as suggested by the Deputy, and various exemptions are also applied, the returns are nugatory. I was in the Government that brought in this form of tax. The main reason for its subsequent abolition by Fianna Fáil was that Mr. Haughey did not want a wealth tax. He was wrong on that, but he was right on the issue of the nugatory returns. The administrative costs were nearly as much as what was collected. The Deputy has accused me of being dishonest. I would not accuse him of being dishonest.