Taxation and fairness
Sir, – The biggest store of wealth in Ireland is as property. Notably even our populist parties rarely articulate any desire to tax that asset class. Meanwhile massive amounts of wealth are transferred by inheritance, which is also very lightly taxed. Of course, no one needs an incentive to be wealthy. And our ultimate rate of death will remain at its traditional level of 100 per cent, irrespective of how much we tax estates.
However, taxing income discourages people from working, and in choosing to work less, people can legally avoid tax and enjoy far more free time. And, of course, the assumption that higher earners are rich is often nonsensical. An individual earning even €150,000 a year will retain about 60 per cent of that. If they buy a Dublin home with a mortgage of €500,000, they will have negative wealth for many years, while quite likely not living in great luxury. Should they have children requiring day-care, that will likely cost them over a quarter of their after-tax earnings.
Anyone who, like Jim O’Sullivan (Letters, March 3rd), wants to tax wealth should do it in a way that doesn’t disincentivise work or ambition. Taxing wholly owned property and estates would be logical options. That we have about the most steeply rising income tax regime in the world, with little evidence of a wealth tax, is an extraordinary anomaly. I’m not sure our politicians will be addressing this imminently, but it is clearly the correct and fair thing to do. – Yours, etc,