Richard Bruton (Dublin North Central, Fine Gael)

I accept the Minister has improved the appalling proposal he announced in the budget by providing for some exemption limits and a more tiered structure. That is a step forward. I would accept the current proposal as not a bad outcome if there was a sunset clause on it, in other words, if we knew it was a temporary measure and would be withdrawn. Unfortunately, the history with regard to drawing income tax proposals of this nature to a close is not good. As mentioned, the income tax code was introduced as a temporary measure during some war in the 19th century and has survived two centuries.

It is for this reason that I cannot understand the reason the Minister does not adopt some of the structures of existing tax codes. We already have three income tax codes and now he is introducing a fourth. It has been called the "Lenihan levy", so, hopefully, he will be immortalised through that title. PRSI has both a threshold and an exemption limit, which provides fairness, particularly to those on low incomes. The health levy has an exemption limit set at €25,000, which is higher and closer to the suggestions being made for this levy. Income tax has a threshold of approximately €18,000 or €19,000 before a person must pay tax.

This levy is the least fair to people on low incomes and introduces poverty trap features that would cost very little to remove. The Minister said it would cost €60 million in total to remove them. The Minister should put that in place, even at the cost of recovering the €60 million somewhere further up the scale. People on this side of the House would accept that. It is not good practice to have a tax like this. An elderly couple, for example, on €40,000 would pay nothing, but on €40,001 would pay €400. Where is the fairness in that? Why, when the unfairness has been pointed out, would the Minister consciously and knowingly say that is the sort of code he will introduce? The Minister put a cost of €60 million on it. If he recovered the €60 million further up the scale, people would not quibble about it.

See this speech in context