Paul Murphy (Dublin South West, Anti-Austerity Alliance) | Oireachtas source

I support Deputy Pearse Doherty's amendment as a limited step with which we would agree in terms of taking low paid workers out of the USC net. The Minister's response is disingenuous in two ways. First, he referred to a progressive taxation system and the elements of income tax, despite the reality that these low-paid workers pay a substantial proportion of their income through indirect taxation, which makes up a substantial portion of the country's tax take. These workers are probably paying close to 30% of their incomes in tax, similar to what the top 10% of income earners pay. Theirs happens to be largely through regressive indirect taxation measures. Second, despite all his talk of broadening it, the Minister will not substantially broaden the tax base just by making low-paid workers pay the USC and he will not substantially narrow the tax base by removing such workers from the USC net. The measures that would contribute to a broadening of the tax base are those which the Government is most dead set against, namely, going after wealth and corporation profits. The Government is committed to maintaining our corporation tax at a level lower than even that to which Donald Trump has promised to bring US corporation tax.

We do not accept the argument that the USC is a progressive tax which the left should support. We favour the abolition of the USC. It is rightly seen by workers as a punitive tax that was supposedly an emergency measure. We support the replacement of the USC with an equivalent tax that applies to incomes above €90,000, which would be called a high income social charge. It would hit those on significant incomes as opposed to low-paid workers or medium-paid workers as is currently the case.