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Taxes on capital are an important part of government revenue in the Republic of Ireland. More broadly, capital taxes have implications for relative competitiveness, revenue sufficiency and equity.
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In this inbrief, I investigate the role capital taxes play in revenues relative to other similarly developed European comparators. I then move to an exploration of the components of capital tax revenues. I find that, in aggregate terms, levied capital taxes per capita are very close to the peer-weighted average and constitute a comparatively large portion of aggregate revenues due to the comparatively low total tax take in the Republic of Ireland. Decomposing capital taxes, I show that disproportionate taxes on corporate income mask relative deficits in all other subcategories, particular under the subcategories of tax on Income of self-employed and Stock of Capital. The latter subcategory encompasses many taxes that the OECD classifies as both pro-growth and pro-equity. Thus, increased revenues in these areas could reduce inequality and address expenditure shortfalls in a growth friendly manner