Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

We all have different views on the Finance Bill but if we are to have a serious discussion we should not be talking about magic beans and pots of gold at the end of the rainbow. Otherwise it will be dismissed and nobody will take anything on board. Deputies Richard Boyd Barrett and Michael McGrath have tabled amendments I do not support and I am sure they do not support some of mine but it is fair to say the amendments have been tabled in good faith. They are based on evidence, some of them on parliamentary questions. For example, the idea of a third rate of tax is something that could actually happen, similar to the amendment Deputy McGrath tabled in regard to a universal social charge of 10%. This is not "Darby O'Gill and the Little People"; it can happen. The decision rests on the impacts caused, and it is on that we should base our discussion. It is not that there is a pot of gold at the end of the rainbow but of course the Government could introduce a third rate of tax, at 48%. If such a rate was introduced it would make the tax system even more progressive. There have been reports that the Irish tax system is progressive but it would be more so if there was an additional band, which would bring in €365 million, based on the Minister's figures. These are not guesstimates or crystal ball gazings but the word of Department of Finance officials. They include parliamentary questions the Minister has signed off on and put before the Houses of the Oireachtas in regard to the figures that would accrue from a third rate of tax. The real question is not whether there is a pot of gold; a third rate of tax at 48% would bring in €365 million. If we were to follow that type of proposal, as argued by Sinn Féin and others and giving different variants such as including the universal social charge, the real question is what would be the impact on society, on jobs, on the economy and on fairness, and whose burden we would be able to relieve by targeting those whose incomes are above €100,000, instead of targeting the €365 million from those who are on lower incomes.

I say that at the start of this discussion because we should have a genuine intellectual debate on the policy options available to us. All of us come from different parts of the spectrum of political opinion. Some people believe it is fair to ask those who have more disposable income to pay more tax, in spite of the fact there is a high rate of marginal tax in this State. We accept that, do not dispute the Minister's statement about the high rate of marginal tax but we have to deal with the effective rate of tax. We know that the richest in Irish society pay a huge portion of tax; it is because they are richest and have the income. The poorest do not pay because they do not have the income. We are faced with choices. Everybody at this committee believes we need to reduce our deficit - that can be put to one side. We all want to reduce the deficit and get to the 3% figure, perhaps not within the same timeframe, but we all want to get there. The question then is options. We should have a genuine discussion, asking what would be the real impact of a 48% tax rate for those earning over €100,000. There would be an impact; we are not naive enough to think otherwise. Of course people earning more than €100,000, who were asked to pay seven cent on every €1 they earn over that figure, would be pissed off. Other people might decide not to come here, or whatever. We must also weigh that impact against the beneficial impact there would be in taking €365 million away from another taxation measure that would hurt people.

I refer, for example, to the property tax of this year-----