Mr. Cormac Staunton:

Firstly, on the progressivity and severity of the tax system, as Deputy Áine Collins said we have also to look at the effects of VAT, excise and so on. The tax system is not only income tax, it is just one small part of it. The overall progressivity needs to be measured by examining the tax system as a whole. On the issue of whether it is the tax or welfare that reduces income equality, the OCED give a figure before taxes and transfers of 56.8%, the higher the number the more unequal we are, before transfers after taxes 53.5% and after taxes and after transfers 29.9%. Therefore, it is clear that the social transfers, not the tax on its own, that makes us more equal.

On the question of middle incomes I am not sure if the Senators have a copy of our submission but we use the Revenue data that was quoted here. It is the TASC submission, which includes chart 1 and chart 2. Chart 1 is the raw data which is done by tax case. It can be a single person, a couple with one earner or a couple with two earners. We have translated it into the number of adults in chart 2. We have put the actual earnings, namely, gross earnings before taxes and transfers into groups. We have also added in those not captured in Revenue data. These are the people who are not working or getting an income. We have not given them an income as such but have just put them aside. The chart shows that the vast majority of people, probably 60% or more are under €30,000, and in fact the €40,000 to €100,000 grouping is not 50% of people, it is a much smaller group of people so that the middle is probably somewhere in the €25,000 to €30,000 range. As it is income and because it is skewed one needs a lot of people on €20,000 to bring the average down to compare to one person on €100,000. The average income from work is €35,000 but the average income of all adults is probably much lower than that.