Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Ní bheidh mé ag tabhairt tacaíochta don leasú seo ach oiread. Tá na rátaí atá á maíomh agus á moladh anseo i bhfad ró-ard. Ní aontaím leis an Teachta McGrath nach cuirfidh ardú cáin isteach ar dhaoine. Ní chuirfidh sé isteach ar dhaoine má tá an t-ardú réasúnta, ach creidim go pearsanta go bhfuil an t-ardú cáin atá á moladh ag na Teachtaí anseo ró-ard. It is altogether disproportionate. I made the point previously about marginal tax rates. We continue to discuss myths in the House. I recognise what Deputy McGrath has said. He referred to what IDA Ireland representatives have told him and all of us about tax rates. They have made that claim and that much is without doubt. That is fair enough and certainly IDA Ireland deals with large multinational companies and so on.

There is no evidence, however, to suggest that high marginal tax rates of the type that we have are a distraction or a problem in terms of employment. Indeed, ESRI representatives told us those of us in the finance committee that child care is probably a greater barrier to employment than our current tax rates. The point I made on Committee Stage was that there is a tipping point and we are on a curve. It is incorrect to suggest there is no relationship between marginal tax rates and employment; of course there is. Let us suppose we put marginal tax rates up to a high level. Different people will have different definitions of what constitutes a high level. Anyway, if we put the rates up to too high a level, as I believe is the case in this amendment, then of course it will have a consequence.

I look forward to engaging with Revenue representatives to try to get them to drill down into more granular detail in terms of incomes. One of the ways to increase taxes - the effective tax rate is the big issue - on those earning above €100,000 is to start to get rid of their tax credits or to have a tapering off of tax credits. We have articulated this policy for many years. We cannot put it forward because it cannot be costed. Anyway, I hope that in the coming 12 months will be will be able to get the costings when the budgetary committee carries out some work with the Revenue.

This policy exists in Britain, for example once a person's income hits a certain level. Above £120,000, a person's tax credits start to go and the person begins to lose the benefit of the tax credit.

This raises the effective tax rate but does not increase the marginal tax rate. We can each fight our corner in this argument. I speak about effective tax rates whereas the Minister of State speaks about marginal rates. We need to get real on this issue. It is possible to increase taxes at the high end without increasing tax rates. Under the current system, people have many ways to reduce their effective tax rate. These include pension reliefs and other reliefs which are not captured in the budget because they are individualised. It is interesting to note in the data for all taxpayers that the effective tax rate is relatively low in all cases. I will not support the amendment because it is disproportionate.

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