Updated 7.52pm
MINISTER FOR FINANCE Michael Noonan has given the strongest indication yet that he will not be considering a wealth tax when Budget 2014 is announced in October.
The Minister said that while he will not comment specifically on any proposals before the Budget happens, there is currently not enough information available on how much money people earn to make it possible to implement a wealth tax.
He also said that people’s assets can fluctuate massively, which would make it difficult to implement a wealth tax or to predict how consistent it would be as a source of revenue, and cited Capital Gains Tax and Capital Acquisitions Tax as examples of taxes on wealth which could be affected if a wealth tax was brought in.
Various types of ‘wealth tax’ have been suggested by different groups as a way of bringing in much-needed revenue from people who may be most able to afford to contribute. The Claiming our Future group proposed a levy on assets and property worth over €1 million and a higher tax rate on incomes over €1 million.
The group estimated that the wealth tax on assets worth over €1 million could bring in between €500 and €600 million per annum alone.
However opponents have argued that the tax could lead to Ireland’s high-earners leaving the country, removing the revenue the State already receives from the taxes that they pay here.
Responding to a parliamentary question from Fine Gael TD Terence Flanagan, Michael Noonan said “all taxes and potential taxation options are constantly reviewed.”
However he said that “to estimate the potential revenue from a wealth tax, one would need to identify the wealth held by individuals, which is not possible from the data available at present.”
“Secondly, asset values increase and decrease over time and in the context of recent economic circumstances, they may have declined considerably in many cases,” he said.
Thus 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 from that point.This would make it difficult to predict the potential yield from a wealth tax and would have to be borne in mind in terms of its consistency as a source of revenue.
Minister Noonan pointed to the Domicile Levy introduced in Budget 2010 which targets individuals who earn more than €1 million per year, who have property worth more than €5 million in Ireland, and whose liability to Irish income tax is less than €200,000 in a given year.
The amount of the levy is €200,000. A total of 11 people paid the levy in 2011, bringing in €1.67 million, while 10 people paid it in 2012, bringing in €1.64 million.
Minister Noonan said the levy was expanded in last year’s Budget which should see an increase in the amount of money it brings in this year when the figures are announced in October.
Originally published at 7.15am
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