'€150m could be raised' by imposing wealth tax on assets over €1m
AROUND €150m could be raised by slapping a tax on net wealth in excess of €1m, a seminar heard yesterday.
A study by think-tank TASC, commissioned by the Nevin Economic Research Institute (NERI), claimed that a yield of almost 0.1pc of the value of the economy was "highly feasible" if the threshold was set at €1m and the rate was levied at 0.6pc.
The body said it would be a tax on household wealth, so foreign and Irish companies would not be liable. Farms would also be included.
"We are proposing that there be no base exemptions and reliefs for farmland, however that the threshold of liability be quite high. So €1m of net assets," author Tom McDonnell said.
"We would envisage that very few farmers would be caught by this. You're talking about 1pc to 2pc of the population. In the region of 20-25,000 households and most would be in Dublin. The vast majority of farmers would not be affected.
The findings were presented yesterday at a seminar jointly hosted by the trade-union-supported NERI and TASC.
The study says a net wealth tax was attractive for a number of reasons, including raising money for the exchequer, helping to combat tax evasion and improve economic efficiency.
The proposal states that the tax would be levied annually on self assessment, would be based on residency and location of assets rather than citizenship, with zero or very few exemptions or reliefs.
Exemptions would include pension assets and personal property worth up to €20,000 of insured value.
"Exemptions and reliefs should be strictly limited, as they undermine the rationale for a wealth tax in the first place and distort investment decisions," the study said.
The main risks include administrative cost and capital flight, although the think-tank said the proposed structure is designed to minimise these.
TASC said France, Norway and Switzerland all have net wealth taxes while Spain and Iceland have temporarily introduced wealth taxes.