Pearse Doherty (Donegal, Sinn Fein)
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The OECD comparison relates to the tax wage which is the big issue in terms of employment and how much it costs an individual to employ somebody, to provide them with a decent wage, PRSI and so forth.

What evidence does the Minister have, bar somebody telling him that it would be better for their company if the marginal tax rate was reduced? It would boost their profits if they were able to pay less to their employees but what empirical evidence is there to suggest there is a drag on employment as a result of marginal tax rates as the Minister has suggested? Let me read out a comment from a representative of the Economic and Social Research Institute, ESRI:

[As] with all policies, where possible evidence should be used to assess proposals and alternative approaches to achieving the same goal should be considered. I will use the USC [case] as an example [again]. It is sometimes argued that high tax rates are a disincentive to work. At some point this is probably true but we can ask if is there evidence to suggest that the current tax rates are leading to widespread withdrawals from the labour market. The most recent figures show that employment increased by 56,000 in the year ending quarter 2, 2016, or almost 3%. Evidence on this issue should be gathered in a more sophisticated manner but even this simple approach raises the question of whether tax is acting as a significant disincentive to work. It could be the case that child care is a [bigger] disincentive. If this is true, then a greater effect on labour supply could be achieved through child care subsidies as opposed to income tax cuts, including USC cuts.

We can have our ideological debate for as long as we want but this committee has to consider the evidence and the statistics. The ESRI tells us there that we do not have evidence to suggest that, as a result of the job growth in the economy, marginal tax rates are a drag on employment. The Minister should show me the report that says otherwise. The ESRI is saying, and this is what I want to push the Minister on, that we need to assess proposals and consider them and that assessment needs to be evidence-based. Despite all the problems in our society the Minister is saying middle-income earners earn twice the average wage and we need to reduce marginal tax rates because they are a drag on employment yet there is no evidence to suggest or support either of those proposals. This is Fine Gael on a tax-cutting agenda despite the fact that in recent weeks, people died on the streets of our capital city because of the homelessness crisis.