Should Ireland tax wealth?

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1:03I think the first thing to say is the purpose of this paper is certainly not to advocate for against the wealth tax. It's really to try and understand what the distribution of household wealth looks like. And therefore, potentially what a 1% wealth tax could do. And really, I think, typically you would focus a wealth tax on the wealthiest households. And the key thing in terms of how much could you bring in would really depend on the types of assets that you include. And essentially, the key is that if you to exclude the major forms of wealth, things like business, wealth farms, household residents, then actually the amount of revenue would be fairly small. Why would you exclude them? Well, I think, look, there tend to be politically sensitive. And absolutely, if you are looking to have a wealth tax on the wealthiest households, really what's essential is that you do tax at a broad range of assets. So you would need to include them if you were trying to obtain a sort of a material sort of overall tax low-bouty. But obviously, they are sensitive. And you can think about particularly things like business, wealth and farms, for instance, a lot of that wealth might be illiquid. And therefore, it's not necessarily straightforward for people to pay that on an annual basis,

2:07to pay a wealth tax. It would still be, they may still be kind of payment and liquidity constraints in that sense. But its illiquidity doesn't mean that it is unreal. And if I know that I'm going to have to pay that tax, then I have to budget for it accordingly. Yeah, absolutely. And I think this is one of the key things when we think about taxing wealth. So currently, the way we tax wealth is generally when a sort of, there's an event happen, so it again is realised or a transfer is made. And in that sense, you're taxing at a flow of wealth. What we're talking about here would be a stock of wealth. And it would certainly be the case that it would just be a lot more tricky. And in practice, it probably would be quite difficult to sort of obtain that on an annual basis. But that's not to say that we shouldn't be looking to the tax wealth, just to think about the practical challenges of an annual wealth tax. So give us a ballpark then. If we said, okay, everybody who has a net worth of north of about two million, which I think is what puts you in the 1%-ish bracket, whether that be farm, business, house, car, portfolio, whatever else, we're hitting you with a 1% tax. How much would we make?

3:08Yeah, so if you were able to collect everything, you'd be looking probably around the billion euro mark there. As I say, if you were to end up with a lot of exemptions and exclusions, that may well fall down to around about just over 100 million. So it obviously does make quite a difference, what assets you would actually tax. And by the way, am I right in that assumption? Is it about two million that puts you in the top 1%? Yes, so the highest thresholds we looked at were two million for an individual or double to four million for a married couple. And that gets you sort of around the 1, 1, and a half percent of the highest households, yes. And that 1% do you have any, if you may not have it at hand, but do you know what percentage of total wealth in the country that 1% controls? I wouldn't have that necessarily to hand. I think the, yeah, the sort of that top 1%, again, it would be sort of anyone that would be in and above that. This is a two million individual or four million for couples, yeah. Rachel, thank you very much. That is Dr. Rachel Sleimaker of the ESRI 5306.

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