Richard Boyd Barrett: Calls for wealth tax amid 'shocking' €740bn figures

You have five and a half minutes left, if you wish to take them. Thank you, Cian Córle. If you don't, it's okay. Yeah, Cian Córle, sometimes we're so focused on individual measures, we don't take the time to step back and look at the big picture in terms of the Irish economy, the amount of wealth that exists in that economy, who gets the benefit of that wealth, how it is distributed and whether it is distributed fairly. And the only opportunity really to do that is at the time of the Finance Bill. And that's why I have a series of amendments looking for the government to produce reports to get the information we need and to look at these issues. But even with what sources that are available to me, as the finance spokesperson for a small party with limited resources, I frankly find the situation shocking. And as I started to say yesterday when we were discussing this, I think most people would be shocked to know that the net worth of Irish households currently stands at 740 billion euro. And that's net of liabilities. If that was shared out equally, everybody would have 150,000 euro each. But of course, the truth is that the vast, vast majority of people have no savings at all, and in many cases owe more than they own. And that enormous wealth which has been generated and which has increased really dramatically over the last seven or eight years is concentrated into the hands of a tiny group of people. This is not me saying this. This is not me saying this. This is the central bank quarterly statistics reports, which show that 53% of all of that wealth that I've just described, that 740 billion is concentrated in the hands of 10% of the population. If you take the top 5%, which is 85,000 households, that means that those richest 5% of our population, 85,000 households, have roughly 3.26 million euro on average each. It's incredible, incredible, incredible, so vast amounts of wealth concentrated into the hands of an absolutely tiny group of people, while the vast majority, as I said, either owe more than they own, have no savings, and struggle just to pay the bills, to pay for the childcare, to pay their mortgage, pay their rent, and survive on meagre earnings. Other figures which I don't have to hand, but I don't think the Minister would dispute them, indeed I was talking to him earlier on about it, and what he certainly looks at these figures, is the share of national income that goes to profits versus that which goes to wages. And that has dramatically shifted in favour of profits over the last 20 or 30 years, and more so in Ireland than in any other country in the Western world. So far from there being a trickle down of wealth, as Ireland records some of the highest levels of economic growth anywhere in the Western world, far from it trickling down, it's gushing upwards into the hands of a tiny, tiny group of people. So what I am arguing in these amendments is that we need to address that, we should see that as a problem. And of course it's a social problem, in the sense, you know, you go back to the early 1970s, and people who were in, you know, average jobs, if you had a job, you could hope to be able to afford a mortgage. Now people in very well qualified jobs can't do that. And that's the real tangible expression of this growing inequality in the distribution of wealth. That people work really hard in jobs, they qualify for those jobs, they're skilled in those jobs, but their earnings are not enough to be able to put an affordable roof over their head. Why? Because actually, the real wealth in the economy, much of the property and much of that wealth I've described are property assets, which are then rented back to the people who can't afford them at extortionate rents and extortionate property prices, are just making money. They're literally sitting on money and it's making more and more and more money for them. They're getting richer and richer and richer, while in real terms, ordinary workers are in any realistic sort of assessment of it getting poorer and poorer and poorer. So it's in that context we are arguing that there should be wealth taxes imposed on that wealth so that the huge economic growth we're seeing, the huge growth in household wealth is redistributed in a fair way to the benefit of the majority and not just to the benefit of a super wealthy minority. Is there any other member offering on Deputy Boyd Barrett's amendment? No. Minister, do you want to reply? I would like to begin by noting that Ireland already has taxes in the wealth sector in a variety of ways, such as capital gains and capital acquisitions tax, which are levied on an individual or company on the disposal of an asset in the case of capital gains tax or the acquisition of an asset through gift or inheritance in the case of capital acquisitions tax. The local property tax, which was introduced in 2013, is a tax based on the market value of residential properties and can also be categorised as a tax on wealth. It's important to understand where Ireland is in relation to the distribution of wealth. Officials examine all items related to taxation, including wealth taxation, on an ongoing basis. For instance, during both 2016 and 2018, Department officials jointly with ESRI conducted two research projects into the distribution of wealth in Ireland and the potential implications of a wealth tax. The resulting research papers, scenarios and distributional implications of household wealth tax in Ireland are available on the ESRI website. Both papers presented results on the composition of a net wealth that has assets less liabilities across both the wealth and income distribution in Ireland. A number of wealth tax scenarios, including regimes from other jurisdictions and hypothetical scenarios, were then applied to the Irish data. In each case, the associated tax basis and revenue yields, the number of liable households across income distribution and the characteristics of the household affected were outlined. Looking at the composition of households under the different tax scenarios, the studies found that even with a narrow base and high threshold, some households in low-income deciles were affected. This is because of the imperfect correlation between income and wealth. Furthermore, if wealth tax were to be applied, in addition to the related forms of wealth taxation, this could have the disincentive effect of causing large changes in the level and type of assets held by Irish households. Households could be expected to respond to high effective rates of tax on capital income by, for example, reducing the holdings of assets in Ireland or relocating their wealth holdings to asset types facing a lower wealth tax charge. In addition, the distribution implications of a wealth tax across different types of households should be taken into account. A larger proportion of their wealth tax burden would fall on older households than their share of net wealth might indicate. Regarding increasing taxes on high-income earners, in 2020 it is projected that the top 1.5% of taxpayer units, who are those with annual income in excess of £200,000, will pay 26.5% of the total income tax and USC. This is a very large proportion of the total income tax stake and the USC tax stake for such a small cohort of taxpayers. In comparison, 72% of taxpayers, which is the cohort of those whose annual income of less than £50,000, will pay 15% of income tax and USC. To further demonstrate the high amount of tax being paid by high earners under the current income tax and USC system, in 2020 it is expected that there will be approximately 2.78 million taxpayer units, including married couples, under joint assessment and that total yield from income tax in USC would be just over €24 billion. 2.3 million taxpayer units with incomes of under £70,000 per annum. The remaining yield over £17 billion will be paid by less than 440,000 taxpayer units, earning over £70,000. It is my view that a broad-based progressive income tax system, where the majority of income earners make some contribution, but according to the means is the most fair and sustainable income tax system in the long term. The Department of Finance will continue to monitor and consider any additional information and data that comes to its attention, and will continue to examine existing and alternative potential taxation sources. I do not have any plans to introduce tax measures along the lines indicated in the report sought by the Deputy. I therefore do not propose to accept the amendment. The vast majority of the increase in wealth, household wealth, as you acknowledge there, is in the value of property assets. I mean, financial assets are significant, 374 billion worth of financial assets, but there are 534 billion housing assets. Now, you said if we imposed a wealth tax, these people might move out of the country and take their assets with them. Well, they could not take housing out with them, quite obviously. You could not carry land and property assets out of the country with you. In fact, it might not be a bad thing if they moved their money out of property, because it might actually lead to the extortionate price of property assets at the moment falling, which to my mind, would not be a bad thing at all. So, I do not really see the downside. But if we were to put just a 2% annual tax on the top 5% that I mentioned, the top 85,000 people who have 3.26 million on average each in assets, and if we were to allow them a million euro each excluded from that for their own family home, do you know how much we would raise? 3.85 billion. 3.58 billion. They would not even feel it. 2% on that kind of income. They would not even feel it. In fact, they would probably be richer the next year than they were the year before, at the current level of inflation of property assets. But it would be a hell of a lot of money for health, for education, for dealing with poverty, and all the infrastructural crises, you know, you name it. The desperate needs of our society, expressed in here day after day, that would be a lot of money. And they wouldn't feel it. Don't you think that would be fair and reasonable, Minister? Are you pressing the amendment or are you withdrawing it? I'll press. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. The vote, Chair, in case you please. The question is defeated.