Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 77:

In page 93, between lines 18 and 19, to insert the following:

“Report on the introduction of a higher rate of capital gains tax on high-income individuals

39.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the introduction of a 40 per cent rate of capital gains tax on the disposal of assets made by high-income individuals, including income generated by gains.”.

This amendment seeks to introduce a 40% rate of capital gains tax, CGT, on the disposal of an asset made by high-income individuals, including income generated by gains. It looks for a report to be brought forward on that concept. I was brought forward with a view to build a better, more responsive State in order to improve our public services and strengthen our social safety net. While some work is ongoing on that with the Commission on Taxation and Welfare, this is a proposal that the Department of Finance should examine. It seeks to introduce a CGT rate equivalent to the higher rate of income tax, including income derived from gains.

The basis for the proposal was stolen from President Biden's American families plan and tax agenda. A White House press release stated:

The President’s tax reform will end one of the most unfair aspects of our tax system: that the tax rate the wealthy pay on capital gains and dividends is less than the tax rate that many middle-class families pay on their wages. Households making over $1 million—the top 0.3 percent of all households—will pay the same 39.6 percent rate on all their income, equalizing the rate paid on investment returns and wages.

He brought forward reforms whereby gains in excess of $1 million would not benefit from the lower rate of capital gains tax, but would be paid at the same rate of income tax at that band. That is similar to my proposal, which I believe is worthy of merit. It would ensure the rate of tax paid on gains for the wealth in this society is the same as the top marginal tax rate levied on income for so many middle-income workers. This would introduce a CGT rate of 40% on the disposal of an assets made by persons in cases where the gains accrued are in excess of individual incomes, including incomes generated by gains. If the Minister were to introduce that, for example, on amounts in excess of €500,000, it would yield €28 million and individuals could still avail of the reliefs legislated for in our tax code.