Two-thirds of taxpayers favour introducing a wealth tax

Almost two thirds of taxpayers would favour the introduction of a “wealth tax”, according to a new survey.

Taxback. com asked 1,700 taxpayers throughout the State for their views on taxing wealth. The survey uncovered that a "landslide" 65 per cent agreed a new tax on accumulated wealth should be imposed.

Alternatively, 61 per cent of respondents agreed that a new higher third rate of income tax should be introduced to gather additional taxes from those on larger incomes.

Barry Flanagan, tax director at Taxback.com, said seven out of ten people said they would not be in favour of paying more tax themselves.

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“I’m sure many people will be surprised that support for a wealth tax amongst taxpayers is so high,” he said. “After all, 65 per cent pretty much constitutes a landslide. However, the results come with a caveat.

“When asked if they themselves would be prepared to pay more tax if it resulted in better public services, 72 per cent said they wouldn’t – either because they think they pay enough already or they think that it won’t result in better public services.”

When asked which assets should be taxed – and how often the tax should be due – a strong majority favoured taxing land (69 per cent), property (57 per cent) and shares (56 per cent), with 61 per cent in favour of imposing a wealth tax on an annual basis.

There was little support for further taxes on pensions (14 per cent) or more personal items like cars (26 per cent) and jewellery (16 per cent).

“The recent increase in property prices has meant that those who are on the ladder are seeing their net worth grow by 11 per cent a year,” said Mr Flanagan.

“In 2015, statistics from economist David McWilliams revealed that wealth is highly concentrated in this country – with 73 per cent of the country’s wealth is owned by the most affluent 20 per cent.

“It doesn’t matter if it’s those with high income or those with accumulated wealth that have already been taxed – our survey has indicated that two thirds of people want to tax it again.”

However, Mr Flanagan also pointed out that the top 1 per cent of earners paid almost 25 per cent of the income tax collected.

“The top 6 per cent of income earners – those households with income over €100,000 per year - paid a staggering €11 billion in income tax in 2017,” he said. “This figure is over half of the record high total of €22 billion that was collected.

“These statistics were included in the preamble to the survey, which may have influenced people to slightly favour a wealth tax over a third income tax rate.”

Taxback.com estimated that a top rate of 45 per cent would mean an extra €800 million for the Government coffers.

Mr Flanagan said 42 per cent of respondents believe it should only apply to income of over €100,000, while 71 per cent said it should be introduced at a rate of between 41-50 per cent.

On the wealth tax, he said taxpayers favoured a rate of between 1-5 per cent. “This rate would be considered very high by international standards, with those countries that have Wealth Taxes tending towards an annual charge of less than 1 per cent,” he said.

“Anything in excess of 1 per cent may lead to a flight of capital.”