Dr. Tom McDonnell:

There were four questions there and I refer to the last question on the broader point about changing industrial strategies and enterprise strategies and moving away from the current model if it is under threat, even if it is a desirable model. One of the consistent points we have made in recent years is how low the level of per capita public spending on research and development is in Ireland compared to peer countries. For example, in 2017, Sweden spent €461 per person and we spent €190. Denmark spent €544 and we are spending one third of that. We need to develop a proper innovation system, including the universities and Government, along with enterprises. High potential start-ups should be spinning out. We are not investing in research and development and in the innovation economy. We need to do that and that is fundamental to the type of strategy the Deputy is talking about, as well as areas such as education and building up human capital. I completely agree on that.

I mention the equality budgeting as we sometimes call it, to reduce the gaps between the top and the bottom. There is always a focus on income but the greater inequality is in wealth and matters such as property taxes and wealth taxes. The most effective taxations we have for that are inheritance tax, gift tax and capital acquisitions tax, which are riddled with tax reliefs in Ireland. There are 90% reliefs for all sorts of assets in business, agriculture and so on. The ultimate yield ends up being between €400 million and €500 million. A vast amount of wealth essentially goes to the next generation without any taxation. If one is a nurse or a construction worker, one could be paying a marginal rate of almost 50% but if one is sitting home and inheriting money, one gets its for free. That is clearly inequitable and the studies show internationally that most assets are inherited. What is happening is that wealth is going through the generations and it is unearned. That is the real definition of passive earnings.