Is a wealth tax on net households assets worth over €1 million feasible? Is it desirable? I discuss these issues in the latest NERI inBrief which can be found here. Many of the core principles for net wealth tax design are outlined in an earlier NERI/TASC Working Paper which can be found here.
The main 'takeaway' is that introducing such a tax in the Republic of Ireland is more than feasible and a wealth tax with a household threshold of €1 million would yield at least €250 million for the exchequer annually and probably significantly more. A well-designed wealth tax would affect just 1% to 2% of households.
The distribution of wealth is much more concentrated than that of income and wealth inequality grows in the absence of progressive capital taxation and the taxation of acquired and often unearned wealth. Taxing wealth is therefore an important tool in ameliorating economic inequality.
We have successfully introduced property taxes, carbon taxes and sugar taxes in recent years. There is no reason we could not introduce a tax on net household wealth.