Brian Cowen (Laois-Offaly, Fianna Fail)

To accept the Deputy's proposal, a 10% income levy would have to be charged in respect of all those earning over €100,000, in addition to their existing tax commitment at the rate of 41%. The Deputy made a fair point and I am explaining that this rate would have to be charged on those incomes to obtain the same revenue that is to accrue through the Government's method. To be fair to Deputy Quinn, he was not arguing about this because we are here to decide the best way to collect the amount of money required. Having listened to Deputies, I believe my approach is better.

On the imposition of the 1% levy on those who have heretofore not been in the income tax net, it is fair to say, with a view to getting the full picture, that successive Governments have used other mechanisms to alleviate the burden on people in this category. For working families, including lone-parent families, the availability of the family income supplement has been outstanding in ensuring the provision of direct supports to families who require them. The income limit applying to one child is €500, while it is €570 for the second child and €655 for the third. As we all know, the eligibility for family income supplement is such that one receives 60% of the difference between what one is earning and the limit pertaining to the size of the relevant family unit. For example, a person earning €300 per week would receive 60% of the difference between this sum and the sum pertaining to the size of the relevant family unit. If a lone-parent had one child, he or she would receive 60% of the difference between €300 and €500 as a result of the change in this budget. This would be part of their income.

I accept we are imposing the 1% levy but, to obtain a full picture, as one must in respect of any budget, one must ascertain the income position for any given person. The families to whom I have referred would be better off even with the imposition of the levy. Furthermore, all families eligible for a family income supplement earning up to €30,000 per year would be better off even with the 1% levy. We are including the 1% levy in the manner described to ensure those at the higher end of the scale will pay on gross income without the benefit of a tax shelter or the benefit of allowances.

The full picture, unlike that being portrayed, is that we are imposing a 1% levy across all income brackets according to a simple concept. By making the family income supplement changes for all eligible working families, those families are better off, even with the imposition of the 1% levy. That is taking care of the situation.

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