Scenarios and Distributional Implications of a Household Wealth Tax in Ireland. ifo DICE Report 2/2018 June Volume 16

This paper looks at a range of different wealth tax structures and their potential impact in terms of population coverage and tax yield using household level data on wealth in Ireland. We calculate a number of scenarios based on stylised examples of wealth tax structures similar to those in existence in other European countries. Our results give a wide range of possible scenarios; applying other country models shows how variations in the exemptions and thresholds can result in less than 1% to almost 50% of households being liable to a wealth tax. The scenarios we investigate show that varying the level of the threshold is the key determinant of the number of households that will be affected, which is in keeping with the concentration of wealth at the upper end of the wealth distribution. Given the numbers of households affected, the treatment of the household’s main residence (which is the largest asset for almost all households, apart from the very wealthiest) is an important factor in the level of average tax payment and hence total revenues raised