Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The Deputy's proposal would see the current two-rate income tax system expand to become a five or six-rate system. This would be in addition to a USC system with five separate rates and a PRSI system with further distinct features. It is my view that our current three-part system of personal taxation is already complex and can be difficult for taxpayers and employers to understand. If further tax bands were introduced, it would lead to an even more complicated system of taxation. It would also significantly increase the marginal rate of tax.

It is not clear from the text of the amendment what rate the Deputy would propose to apply on earnings above €250,000, but the rate of 60% proposed for the preceding band would result in a marginal tax rate of 72% for employees and 75% for the self-employed. Marginal tax rates of this level would have consequences. My intention is to focus on encouraging work.

For the Deputy's information, I have been informed by Revenue that the estimated annual yield from the increased tax rates that he proposes, on a tax unit basis, would be €1.9 billion if a rate of 60% were to apply on income over €250,000 and €2.2 billion if an increased rate of 65% were contemplated.

For the policy reasons that I have outlined in the course of this debate, I am not inclined to commit further resources to the analysis of the proposal outlined by the Deputy. For this reason, I cannot accept the amendment.