Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The other speakers may be on the left but not on this occasion. While I do not wish to go over old ground, I will place a couple of facts on record. The amendment would expand the current two-rate income tax system to a five or six-rate system. This would be in addition to the universal social charge system, under which five separate rates are applied, and a PRSI system which has further distinct features. To place the proposed increases in context, they would result in a marginal tax rate of between 62% and 65% for employees and self-employed persons on incomes of more than €100,000. Rates would continue to increase with income, reaching a marginal tax rate of 77% for employees and 80% for self-employed persons. This proposal is not a runner as the damage it would cause and its unintended consequences would be catastrophic.

To respond to Deputy Doherty's point on IDA Ireland, my role includes international financial services and I meet many foreign direct investment, FDI, companies backed by IDA Ireland. Not everyone employed by these companies is earning a fortune. The first issue consistently raised with me is not the higher rate of tax but the low entry point for the higher rate, which stood at €33,800 until it was increased in the budget to allow people to earn a little more.

Our objective is to increase that in order that people can earn more and pay at a further point along the earning thresholds.

It is always raised with me by companies which want to come here. It is always the first issue raised. A point I like to make to people is that just because it is an FDI company does not mean that everybody is on a fortune. On the figures Deputy Boyd Barrett is talking about, €100,000 is two people earning €50,000. I do not believe two people earning €50,000 are particularly wealthy. One could have two civil servants earning €60,000 getting caught with these thresholds, similar to the points raised by Deputy Burton. This is not the 1970s or the 1980s. It is coming towards the second decade of this century. It would be a hugely regressive step in the wrong direction.

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