Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I am not sure I can shed much light on the discussion but I might add a little heat. I was asked if there was economic evidence to support the theory that high marginal tax rates have an adverse effect on growth and employment. The large body of economic literature documents the evidence on the responses of different groups to the tax schedule and, in particular, the marginal tax rate. The main point that emerges from the literature and which is summarised very comprehensively in the Mirrlees review of 2011 is that taxes reduce labour supply. With regard to particular groups, the response to the tax rate is largest for women with school-age children and older workers. High marginal tax rates may also discourage low earners from taking up employment. There is documentary evidence in the literature assessing the impact of different levels of tax on the labour market.

Deputy Doherty asked if it is semantically correct to call the USC an emergency tax. It was certainly a tax introduced in response to an emergency, so it is legitimate to call it an emergency tax in that respect. Additionally, it replaced the income levy, which was certainly introduced as an emergency tax. It was introduced in response to an emergency and replaced an emergency tax, so I am within my rights to describe it as an emergency tax when I discuss it on occasions such as this.

Everybody is entitled to change his or her mind and there has been a major change of mind from Deputy Doherty. As Deputy D'Arcy referenced, there was a Private Members' motion on 29 March and 30 March 2011, approximately three weeks after a new Government had taken office in the second week of March 2011, and in the usual way it proposed:

That Dáil Éireann:recognises that:

the universal social charge is an unjust and regressive tax, bearing down most heavily on those least able to afford it;

The motion recites all the evils perceived by Sinn Féin of the universal social charge and, in the usual format, it calls on the Government to "abolish the universal social charge" and, as the Deputy rightly states, to reinstate the health and income levies in place of the charge. In 2011, the Deputy and his colleagues regarded the universal social charge as unjust and regressive, calling on the Government to abolish it. The party wanted to do it in one fell swoop and overnight, which was fairly ambitious at the time. Not only did the Deputy sign the motion himself but it is signed by Deputies Gerry Adams, Michael Colreavy, Seán Crowe, Dessie Ellis, Martin Ferris, Sandra McLellan, Mary Lou McDonald, Pádraig Mac Lochlainn, Jonathan O'Brien, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Brian Stanley and Peadar Tóibín. The Deputy is entitled to change his mind and they say consistency is the hobgoblin of the small-minded. All I want is for the Deputy to admit he has changed his mind and that when the Government has now progressively decided to reduce the universal social charge with a view to eventually abolishing it, we are not 100 miles away from the position he adopted in 2011 and which his party has now moved away from.

While we are on the discussion about inconsistency, I remember in those days the Deputy was a very strong advocate of wealth taxes but it was dropped from the second last draft budget introduced by his party. Now he is back to talking about it again but it was not in the draft budget. Will the Deputy clarify if he is for or against a wealth tax? Is he for it on some days of the week and against it on other days of the week? There is an inconsistency about the party's tax position.