Edward Timmins (Wicklow, Fine Gael)
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I also encourage the Minister to index the income tax bands and the tax credits. I appreciate that he cannot give me an answer on this today. It is simply to protect pay increases and would result in no loss to the Exchequer because inflation eats away at pay increases. If someone gets a 5% pay increase with 5% inflation, without an increase in the tax bands, they will actually be worse off because inflation will wipe out the increase, assuming they are receiving the 5% at the top rate of tax and end up with a 2.5% net increase in their pay.