Michael McGrath (Cork South Central, Fianna Fail)
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I am aware that Oxfam International recently (on January 16^th 2023) produced a new report regarding global wealth inequality entitled “Survival of the Richest” which proposes new wealth taxes in Ireland and other jurisdictions.

While I understand the background to calls for a specific wealth tax in Ireland, and I can assure you that the Government is committed to creating a fairer, more equal Ireland, it is not the case that wealth in Ireland is untaxed, as taxes on wealth are already in place here. These include Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax. Revenue estimates that these taxes alone raised over €2.8 billion last year.

The Oxfam report notes:

- “Two-thirds of countries do not have any form of inheritance tax on wealth and assets passed to direct descendants.”Ireland has a significant inheritance tax regime in place in the form of Capital Acquisitions Tax which is charged (with limited exemptions) at a rate of 33%.

- “Rates of tax on capital gains – in most countries the most important source of income for the top 1% – are only 18% on average across more than 100 countries.” Capital Gains Tax is in place in Ireland and it is charged (again with limited exemptions) at a rate of 33% which is well above the 18% average reported by Oxfam.

Any revenue raised from a new 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 such a new tax.

In addition to wealth taxes, the Government takes action against inequality through our tax and welfare system. For instance, the strong redistributive role of the Irish tax and welfare system is evident in the range of supports introduced to help mitigate the impact of the Covid-19 pandemic and the current cost of living pressures on vulnerable households and businesses. The overall distributional impact of Budget 2023 was strongly progressive, with the lowest three deciles experiencing the highest gains as a proportion of disposable income.

Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country, which contributes to the redistribution of income and to the reduction of income inequality.

It is estimated that the top 1 per cent of income earners, those earning in excess of €263,000 will pay 23 per cent of the total income tax and USC collected in 2023. While those earning less than €65,000 which represents the bottom 80 per cent of income earners, will contribute only 21 per cent of total income tax and USC receipts.

In conclusion, I can assure you that all taxes and potential taxation options are kept under constant consideration and it remains a priority of mine to ensure that Ireland maintains its progressive taxation system. I do not however have any plans to introduce further taxes on wealth at this time.