Paschal Donohoe (Dublin Central, Fine Gael)
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Before I deal with the latter part of Deputy Timmins's question, I acknowledge that he has made the case to me, both privately and publicly, for continued indexation of our personal tax code. He has made the case for that and I recognise it.

In relation to his question on integration between the USC and income tax, I think there would be difficulties with regard to that. If we were to do something like that, the goal would have to be how we would preserve the revenue that is still coming from the USC and income tax because it makes such a vital contribution to our public services. In essence, what that would then mean is that we would have to make income tax, in the Deputy's integrated proposal, more applicable at lower levels of income than it currently is. That could have some adverse reactions.

A number of years ago, I considered the integration of PRSI and the USC. One of the reasons I decided that was not something we could move forward on was that, once you look to integrate two different forms of taxation that are applicable on different levels of income, it can create quite significant winners and losers when you bring them forward together. Yes, of course, it is something that can be considered but my own view is that it would be an awful lot more difficult to do than it might look.