Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

A total of 1% of taxpayers in Ireland pay 23% of the total income tax paid in the country. This reflects the reality that those who have the most are paying the most. The top 20% of earners in the country will pay 77% of the total income tax and USC that is collected in Ireland in 2020. When Deputy Boyd Barrett calls for those who have more to pay more, the reality is that we have a tax code that is already delivering that. The way in which USC is structured and how it interacts with income tax means that those who have a far higher level of income than others pay a far higher level of tax than others. When the Deputy talks about putting in place a fairer tax system, we should evaluate that call against the fact that we already have a tax code which ensures that those in our country who are very wealthy pay a high level of income tax. That is as it should be and it is what our system delivers.

I note that the Deputy did not specify the level of income tax rates that would apply under his proposal. It is estimated that the removal of the application of USC on all incomes below €70,000, as suggested, would cost approximately €1.6 billion in a single year. Assuming no other policy changes were made to the structure of the charge, it is likely that if a new tax took the form of a new USC rate for those earning more than €100,000, it would need to be as high as 14.6%. That, in turn, would mean that the marginal rates of tax for those who earn more would go up very quickly. The Deputy would probably be comfortable with that and it is probably something he would want to achieve. However, for me, there are two considerations that are important in this debate. The first is having a tax code which ensures that those who have more income pay more tax. The other consideration is having a tax code which ensures that jobs which could be located in other countries are located in Ireland. The tax code we have and that I am defending gets the balance right between being fair and being competitive in ensuring we have certain kinds of work and certain numbers of jobs located within our country.

While I absolutely can understand the attraction of the measure the Deputy is proposing, it would not be in the best interest of ensuring we have a tax code that continues to be competitive and continues to do nearly the most important thing for a tax code to do in an open economy like Ireland, which is to help in keeping jobs in the country. The battle for jobs and foreign direct investment is one that is only going to intensify in the years to come. I believe that what Deputy Boyd Barrett is looking to do would be harmful to Ireland in the contest for those jobs. For that reason, the policies he is advocating would not be good for our country and keeping jobs in our country. I also do not believe that this matter is best dealt with by a report arising out of the Finance Bill. Therefore, I do not accept the Deputy's amendment.

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