Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

That confirms the estimate of the cost we included in our pre-budget submission of removing the universal social charge from those earning under €65,000. We said it would cost €2.5 billion which is slightly higher than what the Minister is suggesting, although I thank him for the confirmation. However, we also pointed out that by putting extra taxes in whatever form - the universal social charge in this instance which gives me the opportunity to make this point - onto those earning in excess of €65,000 it would bring in the same amount of €2.5 billion. Ideally, as we proposed in our pre-budget submission, this would happen through the income tax system by increasing the effective tax rates on a sliding scale. The effective rates currently run from approximately 31% for those on €100,000 a year up to approximately 42% or 43% for persons earning €5 million to €6 million a year. Therefore, if we were to increase the 31% rate to 33% or 34% and the 60% rate for those earning millions every year, we could capture the €2.5 billion. This would be to the advantage of low and middle income earners who have been hammered by the universal social charge and it would also put billions of euro back into the economy, stimulating growth in the domestic economy, creating high street demand and boosting the small and medium enterprise sector which is on the floor. That would boost economic growth, whereas imposing the same tax burden on those on higher earnings, while I am sure they would not like it, would not have the same damaging effect on the domestic economy as the policies pursued by the last Government which are being persisted with by the Minister.

The Minister says the cost would be great. I put it to him that taxing low and middle income earners in the way he is doing and leaving them in a position where they have virtually no disposable income is the key factor in crippling the domestic economy. This measure is directed at trying to relieve the pressure and transferring the burden onto those who could afford it. As we know from the figures for savings, such individuals are saving their money, not spending it; therefore, they could afford to carry a significant additional tax burden. I do not know why the Minister does not acknowledge this fact. Whenever we talk about increased taxes on higher earners, he talks about taxes on jobs. I put it to him that the universal social charge in the way it is being levied is a tax on jobs. It is the key tax that is preventing the domestic economy from recovering.