Social Democrats call for new tax on 'super wealth'

Party unveils its alternative budget, which includes a third tax band and a €25 increase in social welfare rates

Social Democrats leader Holly Cairns: The party's alternative budget includes a €25 increase in social welfare and a rise in the minimum wage. Picture: Gareth Chaney/ Collins

A new tax on "super wealth", a third tax band and a €25 increase in social welfare rates are among measures sought by the Social Democrats in their alternative budget.

The party brought forward its alternative budget, entitled “Unlocking the Future”, which proposes an €8.2bn increase in government spending. 

Their proposed package is over €1.8bn more than the €6.4bn spending increases set to be delivered by the Government next Tuesday.

The overall package is valued at €16.5bn, with 1.7bn proposed to go towards one-off cost-of-living measures, including a double child benefit payment.

On energy, the party proposes to create an energy crisis subsidy scheme to replace the existing one-off electricity credits. The scheme would be targeted, with payments being based on total household income.

On taxation, the party is calling for the creation of a tax on “super wealth” that would be levied on assets. This would be at a rate of 0.5% on assets valued at more than €1m and at 1% on assets valued at more than €2m.

However, it would only focus on net wealth and would also exempt assets like a family home with a value of up to €2m, as well as contents of the home. Other business-related and agriculture-related assets, including farmland, would also be exempted.

Hike in social welfare

The package also includes a €25 hike in core social welfare rates, estimated to cost about €1bn. The party is also calling for these rates to be benchmarked against Minimum Essential Standard of Living research by St Vincent de Paul.

The party is also seeking to introduce a third rate of income tax for people who make more than €100,000 a year. This new rate would be charged at 43%. It is also calling for an additional indexation of the standard rate cut-off point by €1,600.

Additionally, it is calling for a €2 increase in the current minimum wage, increasing it to €13.30 an hour. Finance spokesperson Róisín Shortall said the current minimum wage was “extremely low” compared to the current cost-of-living.

“We believe that we need to benchmark that to the real costs involved in general living, in rearing a family and so on. For that reason, we believe it is warranted,” Ms Shortall said, adding it would begin progression towards a living wage.

Deputy party leader Cian O’Callaghan said housing was a key priority for the Social Democrats, saying €1.2bn in funding needed to be specifically allocated towards both social and affordable housing construction.

In particular, he said funds needed to go towards “early stage financing” for bodies seeking to build affordable homes.