Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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3. To ask the Minister for Finance if he has read the Credit Suisse global wealth report 2014; if so, his views on the staggering inequalities in the distribution and concentration of wealth here that it suggests; if, on foot of the report, it is now a matter of urgent priority to establish a database on wealth distribution here and a wealth tax to ensure greater equality in the distribution of wealth; and if he will make a statement on the matter. [46336/14]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Very often when some of us on this side of the House rail against unfair water charges, property taxes or what we believe is the Government's failure to adequately fund public services such as housing, health and education, the Minister regularly cites the phrase "there is no pot of gold" in terms of there being an alternative source of funds that could be taxed to avoid this unfairness and give us the resources we need to invest in public services. The Credit Suisse report suggests there is a large pot of gold in the hands of a tiny group of people. I would like to know if the Minister has seen the report and, if so, his views on it and whether he believes it indicates the need for a wealth tax?

Michael Noonan (Limerick City, Fine Gael)
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The Credit Suisse global wealth report 2014 provides a broad range of data in the area of global household wealth and its composition and distribution in the period 2000 to 2014 for over 200 individual countries.  The authors of the report acknowledge that the study of global household wealth is still at an early stage of development and that no country has completely reliable information on personal wealth. This obliged them to assemble and process information from a variety of sources.  The authors state much work remains to be done to refine estimates of wealth by country and improve the estimates of wealth distribution within countries.

I note that the report indicates that Ireland lies in the group of developed economies where the top decile or the wealthiest 10% of adults share greater than 50% of the wealth. This places Ireland towards the lower end of the wealth inequality index in the developed world. As I have stated on a number of occasions, wealth can be taxed in a variety of ways, some of which are in place in Ireland.  Capital gains tax, CGT, and capital acquisitions tax, CAT, are, in effect, taxes on wealth, in that they are levied on an individual or a company on the disposal of an asset or the acquisition of an asset through a gift or an inheritance. Deposit interest retention tax, DIRT, is charged at 41%, with limited exemptions, on interest earned on deposit accounts.  The local property tax, LPT, introduced in 2013 is a tax based on the market value of residential properties.

To estimate the potential revenue from a wealth tax, it would first be necessary to identify the wealth held by individuals.  I am informed by the Revenue Commissioners that they currently have no statistical basis for compiling estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared to Revenue in a number of specific circumstances, for example, after a death, this information is not a complete measure of financial assets in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth based tax.

I am advised that the Central Statistics Office, CSO, institutional sector accounts do not give an indication of the number of households or persons classified by the categories of wealth they hold.  These statistics are based on aggregate information collected from financial institutions and do not contain the demographic details which would enable such a breakdown of the statistics to be given.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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When the Government wants to impose a property tax or force people to pay unjust water charges or the Department of Social Protection wants to means-test them, it is possible to put in place an invasive process to find out the value of people's property and so on, yet when it comes to finding out about the personal wealth of the super rich, we are told the process of compiling accurate information in that regard would be very complicated and difficult. That is not acceptable. We should find that accurate information. If the Credit Suisse report is even 50% right, it is shocking that the top 5% of people in this country hold 40% of the wealth, which amounts to just under €250 billion. Even a 0.5% tax on that amount could provide an alternative to unfair water charges, property taxes and other austerity measures. There are 88,000 millionaires, including 5,000 who have between €5 million and €10 million and 3,000 who have between €10 million and €50 million. This is extraordinary wealth, yet we are being told the imposition of a wealth tax would be too complicated a process.

Michael Noonan (Limerick City, Fine Gael)
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I suggest to the Deputy that it is illogical to be violently opposed to a property tax, while at the same time advocating a wealth tax. I do not get that line of argument.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will explain later.

Michael Noonan (Limerick City, Fine Gael)
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Socialists all over the world are in favour of property taxes. There is, therefore, a contradiction in the Deputy's position.

Following a discussion between the Department of Public Expenditure and Reform, the Central Statistics Office and the Central Bank, the Central Statistics Office undertook a household finance and consumption survey, HFCS, to obtain information on household wealth. The results of the survey are expected to be available in early 2015. The main aim of the HFCS is to provide structural information on household assets and liabilities based on a representative sample of households. This will address gaps in knowledge about the economic well-being of households, the distribution and type of wealth and liabilities among households and individuals, as well as factors that affect financial planning for households and individuals. The data collected by the CSO as part of its household finance and consumption survey are not being collected for the purposes of calculating the potential yield from a wealth tax but to collect general information on the financial position and behaviour of households. The Government has no plans to introduce a wealth tax, although all taxes and potential taxes are, of course, constantly reviewed. There is work in progress that will provide the data about which the Deputy speaks.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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In terms of a tax on the family home and a tax on wealth - in other words, people who have multiple homes or commercial investment property and large cash reserves and other financial assets - it would not be that difficult to work out the difference between the two. The Central Bank's view is that wealth is half financial and half asset related. For 90% of the population, a significant amount of their wealth would be accounted for by their house, if they had one. On the 5% of the population who hold 40% of the wealth, it is fair to assume that the vast bulk of this wealth which amounts to €250 billion is not accounted for by their family homes. Most of it is multiple property assets that are revenue producing and financial assets, shares and so on. A distinction, in terms of a wealth tax, must be made between the family home in which people need to live and revenue producing commercial property and other assets which are generating, on average, profits of 3%, 4% or 5% per annum. Even a 1% tax on this wealth would not impact on those involved. They would still be super rich, but we would have a lot of revenue to offer alternatives to unfair water charges and property taxes.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy is correct that a lot of wealth in Ireland is represented by family homes. However, very often there is no strong connection between the asset value of a family home and the income of the people in the household. Once one passes Newlands Cross a lot of the wealth in the country is represented by farm land. While a person with 100 acres of land worth approximately €10,000 an acre would have an asset worth € 1 million, that is the asset value. The income stream for the person concerned, in particular if involved in dry stock or beef production, would be low. Also, as the asset passes from generation to generation, to deem people like that to be extraordinarily wealthy-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Separate them out.

Michael Noonan (Limerick City, Fine Gael)
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-----and to use them as a statistical base for a wealth tax is unreal.