Michael Noonan (Limerick East, Fine Gael)

I would like to say something that will give Deputy Gogarty the opportunity to vote against the whole Bill if he wants to put the principles he has just enunciated into effect. In his Budget Statement, the Minister for Finance said his objective was "That those who have most, will pay most". Most people in the House agreed with that, including the Minister, but he has dismally failed to achieve that, not because people at the bottom end of the ladder are paying proportionately more than people at the top but because there is a category of people at the top who gain thousands of euro as a result of the provisions of the budget. My complaint is not that these people have not been cut proportionately, but that they make very large gains.

On the day when payments for the blind, the disabled, widows, carers and the unemployed are being reduced, it is a disgrace that the very wealthy will gain thousands of euro from the budget. The universal social charge replaces the health levy and the income levy. The charge is 7% on income above €16,016. The two levies it replaces did not reach 7% until a person was on an income of €75,000. Therefore, the charge clearly hurts the lower paid and on the distribution basis the lower paid are hurt more than the higher paid. That, however, is not the main point of my submission. The problem is that the rate stays at 7%, regardless of how high one's income is. Therefore, self-employed professionals and company directors who have shareholdings in their companies, proprietary directors, who would have paid 11% - with the combined 5% health levy and 6% income levy - on income over €175,000, will now only be liable to pay 7%. They do, however, pay an additional 1% PRSI. Therefore, their net reduction is 3%.

If we take all the tax changes in the budget into account, this group is better off after the budget if their income exceeds €200,000. They are better off by 3% of the difference between €200,000 and what they get. The examples issued in the budget release only show the effect on incomes up to €175,000. The examples should continue up the income scale and look, for example, at the tribunal barrister or the company director with shares in the company on an income of €800,000, many of whom exist as we know from the tribunals. The Deputy need only talk to any of his contacts in the tax management business to know that they have plenty of clients with those levels of income. The person I have described on €800,000 will take home €18,000 more in 2011 than he took home in 2010, and it will operate pro rata.

See this speech in context