Brian Cowen (Laois-Offaly, Fianna Fail)

That does not bring into question the validity of democratic accountability within the law. One can bureaucratise this democracy out of existence if one wants, and get someone else to do our job. We must take the decisions and make the judgments. We do not have to wait for unanimity or total agreement. One must make a decision and one does so. Democratic debate is about putting forward different views. Matters are voted on and they proceed. People can decide afterwards if a good or bad decision was made. Too much of our modern politics is about finding out if someone else can make decisions for us. We can make the decisions here, stand over them and that is the end of the matter.

Regarding Deputy Burton's point, of course we want equity in the tax system. That is in the interests of high earners, low earners, all earners, including those outside the tax net. Everyone should pay his or her share. That protects everybody. Regarding the payment of at least 20% tax on income, there are many people with the income mentioned by Deputy Burton who earn more than 20%, as the Deputy knows from the answers to questions she tabled in recent months.

If one goes for the minimum income tax rate for the type of income earners the Deputy mentioned, one has to watch out for that rate becoming the target rate. Tax planning then begins to develop on a much wider basis so that more people go down to that rate rather than rise to effective rates of 32% or 40% or whatever, as the Deputy will know from answers to parliamentary questions. An entire range of issues is involved there, such as tax credits and trading losses. Taking it that everyone accepts that all those are legitimate credits against tax liabilities, the broad point is that we want to arrive at an acceptable situation. It is not acceptable for a person at the income level noted by Deputy Burton to end up after assessment without a tax liability. It is not acceptable now, nor was it acceptable in 1993 or before that. No reputable tax planner indicates to anyone that he or she should aspire to that situation, apart from bringing attention to themselves.

It is not as simple as it seems but one simple, fair and understandable concept, which is comprehensible to all and to which I subscribe is that everyone should pay his or her fair share of tax. For these tax relief schemes to be successful one needs people with discretionary earnings above normal living expenses and so on to invest in the schemes and make them work. We must be clear on that. We cannot on the one hand talk of high earnings and on the other hand say that all should be on low earnings, because then one will not get people into the schemes. The wider issue involves the employment content, the economic activity generated and the wider community benefit which, for example has seen an extra 100,000 people working in the construction industry. That is not entirely due to these schemes but they have made their contribution. We must take that into account when deciding and making judgments about the balance between the benefits to the investor and the wider community benefit.

Those are the sorts of things that we must analyse objectively, taking our time to deal with all aspects comprehensively in a calm and collected way. That will add to a greater understanding of what, if any, role such schemes will play in future, given the level of economic development that we have achieved hitherto. That is why the way that I propose is better. It is not simply a question of focusing on dealing with the equity issue for high taxpayers, which is valid and something that I intend doing, but it is also about achieving greater comprehension in the community of what such schemes can do, why they exist and what benefits derive from them beyond their being a concessionary benefit for high-income earners. We must come to understand that their wider acceptability as part of the tax code will ensure that they are valid and play the role that we envisage.

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