Michael Noonan (Limerick City, Fine Gael)

The Deputy appears to be suggesting the imposition of a type of wealth tax. Asset values increase and decrease over time. In the context of current economic circumstances, they have declined considerably in many cases, notwithstanding the recovery in the value of net financial assets referred to by the Deputy. If the value of an asset or of an individual's wealth is measured at a particular time there is no guarantee that the asset value or the individual's wealth will remain at that level or increase thereafter. When taken with variations in income levels it would make a tax of this nature very unpredictable.

Capital Gains Tax, CGT and Capital Acquisitions Tax, CAT are, in effect, taxes on wealth. They are levied on an individual or company when they dispose of an asset, CGT, or acquire an asset through gift or inheritance, CAT. The rate of these taxes has been increased by a quarter in recent years, from 20% to 25%. Also, the tax-free thresholds for CAT have been reduced to take account of the fall in asset values over the last number of years. The current CAT tax-free thresholds are 39% below their peak levels in early 2009. Although an individual's assets and liabilities are declared in a limited number of specific circumstances, for example, following a death, the Revenue Commissioners have informed me that they are not in a position to link an individual's income to his-her financial assets. It would, therefore, be difficult to gauge the likely return from a tax along the lines suggested. This is an important consideration, if the Deputy's proposed tax was to be regarded as an alternative to other more predictable revenue sources. For example, the tax measures outlined in the Memorandum of Understanding with the EU-ECB-IMF have a combined projected yield of €1.2 billion for 2012. It is highly unlikely that a tax along the lines suggested by the Deputy would yield anything like this amount.

While I do not propose at this time to introduce such a tax, all taxes and potential taxation measures are constantly reviewed in the context of the budget and finance Bill. I am informed by the CSO that the figures for the financial assets of households for the year 2010 will not be available until October next and it is not their practice to produce forecasts for the net financial assets of households.

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