Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Any debate we have in this House on the income tax system must be placed in the context of the challenges the country faces, particularly the deficits evident across a range of public services. As elected representatives, we are all well aware of the deficits. In the health service there are issues with disability services, families waiting for extra home help hours or home care packages and young children waiting for special needs assessments under the Disability Act. We are all well aware of the housing crisis which is multifaceted in nature. Whether we are discussing tax cuts or increases, the debate must take place in that context.

As a country, we have one of the most progressive tax systems in the developed world. In Fianna Fáil we believe the people who have the most should pay the most. We have a tax system which recognises that reality and has been developed over a long period of time. It is fair to say that in the early years of the crisis the introduction of USC in an amalgamation of the old health and income levies represented a significant increase in the burden of taxation on workers and pensioners. That needs to be recognised and is why it is important to reduce, in a gradual and sustainable way, the burden of taxation on the shoulders of workers and many pensioners. However, the notion that one can just increase dramatically the burden of taxation on people above a certain level of income without consequences for everyone else is not one to which I subscribe. In the context of attracting foreign direct investment or encouraging SMEs in Ireland to scale up, there would be consequences if we were to have an income tax environment that was punitive for those earning what would be regarded as high levels of income. There would be consequences for those working in less senior positions too.

The amendment proposed by Deputy Boyd Barrett does not specify rates for the different bands, but the Deputy elaborated on the matter in his contribution. The amendment is not placed within a context which must be the challenges we are facing as a country and the clear deficits across a range of public services. We believe there is a need to gradually reduce the burden of income tax, but in so doing we must respect and maintain the progressive nature of the tax system such that those who earn the most pay the most. That should be the cornerstone within which we frame future changes.

See this speech in context