Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As I informed the Deputy on Committee Stage of the Bill, wealth can be taxed in a variety of ways, some of which are already levied in Ireland. Capital gains tax and capital acquisitions tax are, in effect, taxes on wealth in that they are paid by an individual or company on the disposal or acquisition of an asset through gift or inheritance. Deposit interest retention tax, DIRT, is charged at 33%, with limited exemptions, on interest earned on deposit accounts. Local property tax is a tax based on the market value of residential properties. Any revenue raised from a wealth tax may not, therefore, be additional to the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of a wealth tax.

On the issue of household wealth, late last year the Central Bank published a report, Household wealth: what is it, who has it and why it matters. It reports that the survey data indicate an improved financial position and resilience for households prior to the Covid-19 crisis when compared with the situation leading into 2008. I am informed the survey indicates that the net wealth of the median household grew by over €76,000 or 74% to €179,200 from 2013 to 2018, driven primarily by house price growth and decline in mortgage debt. The report is clear that a significant portion of wealth for most households is tied up in the family home. This net wealth grew across the entire wealth distribution while inequality, as measured by the Gini coefficient, fell over the same period. The decline in negative equity from 33% in 2013 to 4%% in 2018 was a key driver of this.

As was confirmed in the recent budget tax policy changes document, a range of metrics demonstrate that, compared with other countries, the Irish tax and welfare systems already contribute substantially to the redistribution of income and the reduction in income inequality. Our income tax system has become even more progressive over time and ranks as one of the most progressive in the OECD. My officials continue to examine all issues relating to taxation, including the taxation of wealth, on an ongoing basis, and they and I will monitor and consider any additional information and data that come to light. I do not, however, have any plans to introduce the wealth tax or to produce a new report on that topic. I therefore cannot accept the Deputy's amendment.

The Deputy referred to the debt situation the country is in and described it as "scary". While the level of debt we hold is much higher than it was in the pre-pandemic period, our debt is now on average funded for a long period and at a low interest rate, which means that if the country continues to reduce our level of borrowing, we will over time reduce the impact of the debt on our country. While I would describe it as a serious issue we have to be aware of in future budgets, I would not at this point describe it as "scary" in terms of the impact it could have on decisions we have to make. It is profiled for in terms of duration and interest rate in such a way that, if we manage our public finances carefully, the country should be able to manage the consequences of that debt.

The Deputy referred to other countries introducing the wealth tax. Perhaps he will inform me if any countries in the European Union have done that and tell me how their experiences inform his.

It is worth saying again, as I always do in this debate, that the survey from the Central Bank indicates a key component of household wealth and the growth thereof in our country is what has happened to the value of residential property. We have a local property tax that taxes the value of the wealth located in family homes. It resembles in many ways the kind of wealth tax the Deputy wants to bring in but he is opposed to the local property tax and wants to see it abolished.

Capital gains tax, capital acquisitions tax and DIRT are, at their current levels, among the highest of any country to which Ireland would compare itself. We have taxes in place already, some of which are a proxy for a wealth tax or equivalent to the impact one could have. In particular, we have a local property tax the Deputy has long campaigned for the abolition of.

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