In 2010 it is estimated that almost 45% of income tax earners will be exempt from income tax and only 14% will pay income tax at the higher rate. For a single individual, the entry point to income tax is €18,300. A married, one income family does not start paying income tax until income levels are in excess of €31,950. It is evident that this situation has become unsustainable. We arrived at this situation by the very generous increases in credits and bands over several years. The combined value of the personal tax credit and the PAYE tax credit has increased by 92% since 2001, from €1,905 to €3,600 in 2010. The single standard rate band has increased from €17,780 in 1999 to €36,400 in 2010. This is an increase of 105%.

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