Wealth inequality
Despite overall financial health improving, in 2023 much of the country’s wealth remained concentrated at the very top.
NEARLY HALF OF the total net wealth in Ireland belongs to the richest 10% of households, figures show.
The Economic and Social Research Institute (ESRI) has released a report on hypothetical tax scenarios and their outcomes for different groups of people based on current wealth distribution.
It found that Irish household wealth has increased substantially over the past decade and household balance sheets have strengthened.
Total net household wealth had more than doubled between 2013 and 2023. In the same period, household debt fell from 25% to 11% of gross assets.
Despite overall financial health improving, much of the country’s wealth remains highly concentrated at the top. The wealthiest 10% of households held almost half of total net wealth in 2023.
When theorising about tax measures that could be taken, the ESRI said the assets included in any wealth tax would matter more than the threshold at which the tax begins.
“Applying a lower threshold to a narrow set of assets does not offset the exclusion of these major forms of wealth,” it said in a statement.
Major forms of wealth include property, land, farms and businesses.
If a very high tax threshold was imposed, tax liability would be left to a few wealthier households.
The ESRI found, however, that this approach would not eliminate payment difficulties linked to current income.
Some very well-off people may have a lot of assets, but no significant regular income, which could make it difficult for them to afford high taxes.
Rachel Slaymaker, a researcher at the ESRI, said: “Any consideration of an annual wealth tax would need to weigh up these factors, alongside its interaction with the wider tax system and whether reforming existing taxes could achieve the same objectives more effectively.”
The ESRI’s scenarios are given for illustrative purposes and do not represent revenue forecasts or policy recommendations.