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

I thank the Senators for raising this issue through recommendation No. 1. I am not in a position to accept the recommendation because there are many other ways in which the potential for a wealth tax to raise additional revenue for the State can be evaluated over the course of the year. I do not believe it is appropriate, in the context of a Finance Bill, to incorporate a commitment to prepare a report because a Finance Bill is all about how we bring stability and certainty to the tax code in the time ahead. Indicating within legislation that gives effect to a budget that we are considering further changes or looking to obtain information in respect of a potential change is not appropriate. There are better ways in which that can be signalled rather than through legislative change and a commitment to a report in the Finance Bill.

My objection to the principle of a wealth tax is practical more than ideological. I do not believe a wealth tax as proposed here would have the effect that the Senators are contending because we have many other wealth taxes within our economy that provide alternative and effective ways of generating tax from transactions that are associated with the holding of wealth and the different manifestations of wealth within our economy. Indeed, some of these have already been touched on by Senator Higgins in her contribution, whether that be capital gains tax, local property tax or the new taxes the Government is committed to introducing in the time ahead such as a zoned land tax or the measure the Government committed to today regarding a tax that would gain for the State a share of the higher value of a piece of land where the value is conferred on it by rezoning that land. We have many other ways in which we tax wealth within our economy and society and they are effective. In some cases, they are set at a level that is very high relative to other economies that we would compare ourselves against. For example, the level of capital gains tax within our economy is 33%. That is a high level of tax on the gains that can be made in relation to particular transactions.

We have many other effective, tried and tested ways to tax wealth within our economy. I contend that they are a more effective way of taxing those who have a high level of wealth within our economy, as opposed to the measure that is being suggested here this afternoon. In addition to all of this, we have an income tax structure that is exceptionally progressive. The more income a person has, the more tax he or she pays. We already have many different and effective ways in which wealth is taxed and that is why I believe that there is no need for another new tax on wealth beyond those the Government has already committed to introducing.

I have the same objection to all of the other recommendations that we will consider this afternoon. I know there are better ways in which information can be ascertained or a debate can be had on important policy matters apart from a report on foot of the Finance Bill.