DUBLIN: Imposing a French-style wealth tax on Ireland’s super-rich would only yield an extra €22 million a year in revenue, according to a study by the Economic and Social Research Institute (ESRI).
The research, presented at the Department of Finance’s annual tax policy conference on Wednesday, assessed the potential impact of adopting various European wealth tax structures here.
It found that wealth taxes in France and Spain involved relatively high thresholds, applying only to individuals with assets exceeding €1.45 million and €900,000 respectively.
While this meant most of the burden fell on high-net-worth individuals, the revenue generated was modest. If applied in Ireland, the study estimated the taxes would only generate €22 million and €77 million.
Conversely, the alternative Swiss model, which has a much lower wealth threshold and covers a greater range of personal assets, could net the Irish exchequer up to €1.3 billion in additional funds.
However, this was caveated by the fact that a significant proportion of the burden of Swiss wealth taxes, which differ depending on the canton, fall on low and middle-income earners.
In Swiss region of Schywz, for example, a wealth tax is applied to all individuals with assets, including income and property, exceeding €49,824. In the other two cantons assessed by the study, individuals with assets of €66,830 and €83,040 were liable for the tax.
The ESRI’s study found that while most of the wealth tax burden applying in various European states fell on the shoulders of top earners, there were some anomalies.
For instance, the research revealed that a significant proportion of the wealth tax burden fell on older households and single-adult households.
This was because the latter tended to have more expensive property assets and were often sitting on assets that may have once belonged to two individuals.
